Xiaomi’s IoT Chip Arm, Big Fish, Closes Series A
COVID-19 and China
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Big Fish Semiconductor (大鱼半导体), a Nanjing-based chipmaker, completed its first independent financing round, a Series A, on November 22. The funding event was led by the Internet of Things-focused angel investment fund Lanpu Ventures (兰璞创投). Earlier this year, the money manager, which is pretty active in Nanjing, pumped capital into the city’s two other promising rookies: AI accelerator developer Windorise Technology (风兴科技) and SemiDrive Technology (芯驰科技), a Sequoia-backed startup that provides V2X (Vehicle-to-Everything) and ADAS chip solutions – both companies were founded in 2018.

As China allocates significant resources to the microelectronics sector (the CNY 300 billion-large ‘Big Fund’ is among the most striking examples), more and more bootstrapped entrepreneurs are marching into an industry that used to be a highly monopolized battlefield – but now, affected by the planet-wide surge in technological progress, is changing towards a more diverse model, with a plethora of different applications.

EqualOcean has reported that cellular IoT chip provider EigenCOMM (移芯通信) took home CNY 100 million (USD 14.21 million) from an impressive line-up of global investors last week. Meanwhile, other countries are also actively preparing their ‘future champions.’ For one thing, another smart home architect, Israeli 3D imaging sensors pioneer Vayyar, carried out a USD 109 million Series D on November 19.

Besides these passionate argonauts, downstream players in the global electronics supply chain are also keeping an eye on the country’s new economic incentives. In a market economy, large corporations often make attempts to strengthen their capabilities and stimulate innovation by launching quasi-independent projects. Big Fish’s story falls into this exact category.

The firm was spun off from Xiaomi (1810:HK) in April 2019, during the reorganization of smartphone chipset branch Pinecone (松果电子), a five-year-old wholly-owned subsidiary of the Chinese consumer electronics giant. As a result of this change, a number of employees moved from Pinecone to the nascent company. Xiaomi banked 25% of the new business, leaving the rest to members of its founding team. From that point, Big Fish started concentrating on IoT, while the old chipmaking arm’s focus shifted to handset-related products.

The global consumer electronics scene is facing a major shift. The smartphone industry – which had been the primary growth driver over the past decade – saw worldwide shipments going down by 4.1% in 2018. At the same time, a wide gamut of emerging technology concepts is attracting market leaders to modify their product lines. This change is something of an opportunity for venture capitalists who, not so long ago, seemed reluctant to take cash out of their pockets.

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