The Beijing-based cybersecurity company Qingteng Cloud Security (Qingteng, 青藤云安全) has disclosed a Series B+ funding round of CNY 300 million (USD 43.5 million). The Greater Bay Area Homeland Development Fund (GBAHDF) joined Qingteng's investor circle in the new financing.
Qingteng is already known for big-name investors like Sequoia China and ZhenFund (真格基金), but its security solution, based on adaptive security architecture, is what brings it to the forefront. The new funding will focus on the research and development of host security services and container services to complete the product mix, as well as business development.
Founded in 2013, the company has raised a total of CNY 567 million (USD 83 million) in four funding rounds. ZhenFund, China Broadband Capital, and Redpoint Ventures invested in the firm from early on, and Sequoia China joined the board in a Series B of CNY 200 million (USD 29.3 million).
While bringing in GBAHDF as an investor, Qingteng plans to enter the Greater Bay Area, where the base of GBAHDF can be found, in order to distribute its resources, build foundations and implement cloud security services for local business partners.
The investment deal count in the enterprise security service sector of China has been declining since 2017, which was the peak, with over 148 related deals. On the contrary, the money inflow amounts has been increasing since 2017. The inversely proportional relationship between the sector's deal count and deal value is similar to the relationship between the general funding stage and funding amount – fewer later-stage investments but more money coming in at the same time.
Cybersecurity has long been a hot topic since the Internet penetrated our lives – and since the accumulated data began to generate a new field of science. In the Global Risks Report 2018, cyberattacks were the third largest risk, in terms of severity, imposed on all economic bodies. Taking a single case, a cyberattack cost NetPetya a quarter loss of USD 300 million in 2017.
As for China, the nation has become one of the biggest targets for hackers. Cybersecurity has been written into national strategic development plans like the 13th Five-Year Plan. Based on market research conducted by IDC in 2018, China's IT security market size took only 1.84% of the overall IT market, while the counterpart in the US took up to 4.78%. The IT security market is yet to be doubled or even tripled in China in the future with favored policy and increasing demand for security services.