Alibaba Rival JD.com Launches Crowdfunding Site for Startups in China

Thursday, April 2, 2015

China’s largest e-commerce companies are eager to leverage their millions of users and hoards of data for new projects. For example, Alibaba’s other businesses include healthcare management, financial services, and cloud data. Now JD.com, its smaller but still formidable rival, is branching out into crowdfunding for startups.

JD.com, which filled 689 million orders last year, has launched JD Equity Crowdfunding platform to help startups secure capital. The project is an offshoot of Coufenzi, the crowdfunding site JD.com opened last July.

Like Kickstarter, Coufenzi allows users to contribute funds toward individual projects and products. So far, projects on Coufenzi have raised a total of RMB280 million (about $45 million).

JD Equity Crowdfunding, on the other hand, is designed for entrepreneurs who need to find early-stage investors. The site isn’t the first startup crowdfunding site in China, but with JD.com’s resources, it claims to already be the largest. Its competitors include CTQuan, which has raised $4 million in venture capital backing and uses a model similar to AngelList.

A JD.com spokesperson told TechCrunch that JD Equity Crowdfunding plans to differentiate from other platforms by “developing a complete ecosystem for startup companies.” In addition to the crowdfunding site itself, this includes resources such as JD Cloud, its cloud computing unit, financing tools, marketing support, and training from JD.com’s management, as well venture capital partners like Capital Today, ZhenFund, and Sequoia Capital. In exchange, JD.com will take a small equity stake in each successfully funded startup (though it isn’t disclosing how much).

Source: TechCrunch (link opens in a new window)

Categories
Entrepreneurship, Investing
Tags
crowdfunding, startup, venture capital