This is going to definitely be happy news for the startups across the world, most especially startups in China, as JD launches crowdfunding.
JD.com or Jingdong Mall, formerly 360Buy, is a Chinese electronic commerce company headquartered in Beijing. It is one of the largest B2C online retailers in China by transaction volume
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.
The 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.
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.
The startups on the Equity Crowdfunding will be pre-screened.
As Technode notes equity crowdfunding sites in China face several challenges, including lack of understanding about how the model works by potential investors and the current lack of laws to regulate equity crowdfunding.
Not only can launching projects that focus on entrepreneurs help e-commerce companies gain goodwill among startups that might use their sites or services, but it can also help them eventually diversify their revenue streams.
Like JD.com, Alibaba is also investing in entrepreneurs, but so far it has focused mainly on e-commerce sellers who rely on its various platforms, including Taobao and Tmall, to conduct business.
The company is reportedly planning to found its own crowdfunding site for startups, according to TechNode.
(Credits to Catherine Shu)
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