Beijing Internet Based Engineering (IBE), a Chinese industrial software developer backed by the country’s venture capital (VC) major HongShan, has secured 700 million yuan ($97.2 million) in strategic financing to help various industries improve product designs and assist in the resolution of engineering problems.
The Beijing-headquartered startup raised the new investment from two lead investors — financial services firm CCB Trust; and Greater Bay Area Homeland Investments Limited, which primarily invests to promote the development of southern China’s Greater Bay Area (GBA), the company said in a statement.
A group of domestic firms participated in the deal, including several state capital investors such as the state-owned brokerage & investment bank China Galaxy Securities and investment firm Shenzhen Investment Holdings Capital.
ZGC Science City, an incubation and investment platform funded by a district government in Beijing; and CMB International, a wholly owned financial services subsidiary of China Merchants Bank, also participated.
This investment is one of the few big-ticket deals in the Chinese software industry where fundraisers have been predominantly early-stage startups raising smaller cheques.
In the final quarter of 2023, only two software startups in Greater China managed to close a deal at $100 million or over, while 76.8% of the software investments completed in the quarter raised less than $30 million. Nearly half of the quarter’s software transactions happened at Series A or earlier funding stages, according to the Greater China Deal Review: Q4 2023 report by DealStreetAsia DATA VANTAGE.
This is despite the fact that software came only after semiconductor in terms of deal count, with the completion of 69 investments in Q4. The semiconductor sector recorded a total of 108 venture deals in the final quarter.
With the new funding, IBE will invest further in R&D and product improvements to build an ecosystem centred around its computer-aided engineering (CAE) technology, which leverages computer software to stimulate performance for the advancement of product designs and the resolution of engineering problems across a wide range of industries.
IBE was founded in 2014 by Qu Kaifeng, who has a PhD in electrical engineering. With a team of over 500 scientists and engineers, the startup has introduced a general multiphysics simulation Platform as a Service (PaaS) product named “Simdroid” to offer simulation solutions for the electronics, energy, petrochemical, aerospace, automobile, rail transportation, and marine industries.
“Industrial software, especially those built on top of the CAE technology, is one of the fundamentals of intelligent manufacturing. It plays a vital role in promoting modern industrialisation and helping China build strong manufacturing capabilities,” said a representative at CCB Trust in the statement.
In July 2021, the startup closed a HongShan-led funding round at almost 300 million yuan ($41.7 million). Its earlier investors include Tencent’s investment arm; and Habo Investments, which is owned by Huawei Technologies.