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