The review of the money tree we grew in 2017 in China tech

We are at the end of 2017, and it is a natural ritual to look back the money trees we have planted so far and wonder whether they will continue to grow in 2018. After all, it is never easy trying to grow money by money. So let us just count down the three biggest crazy money trees in China tech scene in 2017.


  • The “Sharing Economy” stampede


Since the meteoric rise of bike sharing in China, 2017 has been one heck of a year of messy procreation of “sharing economy” experimented with diverse concepts, from apparel, battery, umbrella, basketball even to sex doll. It is estimated that at the pinnacle of this trend, there should be over 3,000 sharing-related projects going on in the market and at least RMB20 billion (USD3 billion) has been devoted to the sector. Nevertheless, the sharing economy came more like a summer storm, and by the end of this year, the hype is pretty much over. Except for the survival of few big players in bike sharing, the local media started to be more interested in talking about the startup death toll or autopsy. So it looks like tons of cash might have already burned into ash and it is unlikely to blossom in the coming new year.


  • The Unmanned “New Retail”


Ever since Alibaba coined the term “New Retail”, it has become the new and daring bitch in the tech business in the second half of 2017 in China. The investment fad, in fact, suddenly reached its spike in September; attracting over RMB2 billion flowing into it within the next 3 months. Though “New Retail” is the most fashionable catch phrase for many people to throw around these days, few actually know how to give a precise definition. For the majority of investors, its core seems to surround the idea of “Unmanned”. Yes, either “unmanned convenience store”, or “unmanned shelves”. It is said we have already over 50 key startup players in the “unmanned” arena, backed by the capitals from prestigious VCs and the local internet giants. Such hotheadedness will carry into 2018. Most of these startup investments are at the very early stage, either Pre-A or A-round, so we should see more bitter and intensified competition ahead and possibly a reshuffle of the whole landscape in 2018.


  • The pricey AI fantasy


Well if the whole tech world is worshiping its newfound passion for AI. So does China kotow. 2017 has also been a remarkable year to witness the splurge after splurge in AI investment in China, which is said to receive more than RMB 25 billion this year. The fundraising of China AI startups continuously broke the historical record. China AI is especially leading the wave in facial recognition and computer vision, just by looking at the money value has been lavished on this vertical. For instance,


-Face++, raised USD460 million C+ round in October

-Sensetime, USD 410 million in series B, a Guangzhou based startup is also in the B round and has received total USD380 million, and 80% of that money are directly from the wallet of Guangzhou municipal government.


Though some critics questioned the overvaluation of the AI unicorns in China, really nothing can do about it. According to Goldman Sachs, by 2030, China intends to become a global center for AI innovation, at which time its AI industries will reach a total output value of USD 147.8 billion. Under such optimistic expectation, the valuation will not come down any time sooner. AI in China is becoming a big-ticket investment, so if you do not have enough money, better to leave the game table. For sure this AI fantasy will keep blasting itself into much higher orbit in 2018.


Author: Cecilia Wu