Despite a lack of deals in the country, the state investment company of Singapore, Temasek, is heading a $40 million capital round in a Chinese startup.
According to the business database Tianyancha, the startup, Well-Link Technologies, has investors including the Chinese gaming superstar miHoYo and the Chinese tech company Xiaomi.
Early-stage, or B2 round, agreement of $40 million announced on Monday comprises current investors Future Capital and VGC and is led by Temasek.
In an email, Temasek acknowledged the agreement.
China exposure for the Singaporean company has decreased over the past two years, from 29% in 2020 to 22% as of this March. According to Dealogic, Temasek had only taken part in eight China finance agreements as of last week, compared to 41 last year.
Well-Link Technologies, based in Beijing, has developed a real-time cloud rendering industry in just three years. They assisted miHoYo with the release of the popular game Genshin Impact on the cloud. Instead of using a single computer to perform the calculations required to create graphics like animations and movies, cloud rendering leverages several computers on the cloud.
Since cloud gaming relies on remote servers and an internet connection to provide users with a flawless gaming experience with just a tiny file download, it demands rapid processing speed.
For instance, the non-cloud version of Genshin Impact on Apple’s Chinese App Store is 3.7 gigabytes in size but the cloud version is only 78.5 MB.
According to Well-Link, its sales has increased by a staggering 400% or more each of the previous two years, putting the business on course to earn several hundred million yuan in revenue, which is the equivalent of tens of millions of dollars in the United States.
According to CEO Guo Jianjun, Temasek’s value wasn’t the biggest the business obtained. But he added that the most recent investment round is a part of the firm’s intentions to grow its operations internationally.
During the epidemic, it was challenging to get money, but the firm still has a lot of cash, according to Guo. However, he said that he was optimistic about Well-future Link’s growth and that the company should continue to its funding strategy.
The promotion of new cloud-based game creators is one of Well-upcoming Link’s initiatives.
The business is also investigating how its real-time cloud rendering technology may aid in the advancement of virtual reality and other cutting-edge technologies.
Regarding regulation, Guo claimed that his startup suffers less policy uncertainty and emphasised the fact that Well-Link does not serve customers.
According to a CNBC translation of Guo’s Mandarin statement, “Our condition was that we must conduct compliant, reasonable, and lawful things from the time that this company was founded in 2019.”
The speaker predicted that “very exceptional and decent firms and good content” will continue to receive approval or support. Therefore, all that is required of us is to deliver high-quality content that complies with legal criteria.
In the previous 18 months, governmental oversight of China’s gaming sector has strengthened, and there are now stricter limitations on the amount of time minors can play. Even though NetEase and Tencent, two titans of the business, each won permissions for games this month, regulators have been slow to authorize many new games from those two companies.