Qulian Technology, a China-based blockchain platform developer, has announced the completion of a 1.5 billion Chinese yuan ($234 million) Series B funding round.
The amount makes the investment one of the largest traditional funding rounds in the blockchain space to date, though, according to CoinDesk’s Venture Capital Tracker, Robinhood’s $363 million round announced last month is still way out in front.
As explained in an announcement from Qulian on Sunday, the news comes just a week after the deal’s lead investor Xinhu Zhongbao, a Shanghai-listed real estate and finance firm, first disclosed its plan to invest in the project in a filing with the Shanghai Stock Exchange on May 27.
The document indicated that Xinhu Zhongbao intended to invest 1.23 billion CNY ($192 million) in Qulian through a combination of a $17 million capital contribution transfer and a $175 million new equity issuance. The deal resulted in the investor holding 49 percent of Qulian’s shares.
Founded in 2016, Qulian sets out to develop enterprise-grade solutions based on its hyperchain blockchain platform. Based on Xinhu Zhongbao’s disclosure, the firm recorded revenue of $281,000 and a net loss of $2.34 million in 2017, while the firm was valued at $234 million.
This is the second time that Xinhu Zhongbao has shown its support for Qulian, having already purchased a small amount of the firm’s shares in April 2018, at which point the investor valued Qulian at $78 million.
The three-fold increase in valuation over two months has predictably drawn scrutiny from financial regulators in China. In a letter of inquiry published on May 27, the Shanghai Stock Exchange required the lead investor to justify the rapid change in Qulian’s valuation.
Zhongbao Xinhu replied to the regulator:
This is a business judgement made by the company and other co-investors based on a comprehensive evaluation of Qulian. There is a risk of a mismatch in (Qulian’s) income and valuation.
At press time, Qulian could not be reached by CoinDesk for comment.
Yuan notes and coins image via Shutterstock
The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.