US and China-based VC firm GGV Capital announced earlier this week that the company has made three new investments into Chinese Internet of Things companies. GGV led US$15 million series B rounds for Xiaomi-affiliated Chinese startups Zimi (portable battery chargers) and 1More (headphones), as well as an undisclosed series A round for PetKit (wearables for pets). These investments bring GGV’s total Internet-of-Things portfolio companies up to eight, including three companies working in the Xiaomi ecosystem in China.
So why is GGV so focused on Internet-of-Things companies right now? “We think this is the next wave in Internet 3.0,” GGV managing partners Hans Tung and Jenny Lee told Tech in Asia. GGV sees the advances in sensors and hardware that are coming over the next ten years as likely to start playing a key role in the lives of consumers. “This is where we see the possibility of startups building disruptive business models not seen in the Internet 1.0 (PC internet) and Internet 2.0 (Mobile internet) era,” Tung and Lee said.
“We see China and US playing a key role in the co-development of the IOT space leveraging China manufacturing and engineering power on the backend and US industrial design and marketing on the front end,” Tung and Lee said. But the company doesn’t just see China as a manufacturing hub. GGV expects its two main areas of focus – China and the United States – to both be significant consumer markets for IoT devices. In fact, some age groups in China are already embracing the Internet of Things, said Tung and Lee. Young people in China are already “very comfortable with having their watches, their home devices be connected and controlled via their smart phones.”
GGV’s focus on companies in the Xiaomi ecosystem is no accident either. Xiaomi CEO Lei Jun shared his vision for that ecosystem with the firm back in 2013 at GMIC Silicon Valley, and GGV has been impressed with how things have progressed since then. “It is our assessment since then that the Xiaomi ecosystem could help to foster several ‘mini Xiaomis’ in key IOT categories such as home appliances, wearables and others,” Tung and Lee said. “We are also exploring various collaboration opportunities for our portfolio companies with JD, Tencent, Ali and Amazon to better access both the U.S. and Chinese markets.”
Test from: TECHINASIA C. Custer mar 19, 2015