How China’s first autonomous driving unicorn Momenta hunts for data

Cao Xudong turned up on the side of the road in jeans and a black T-shirt printed with the word “Momenta,” the name of his startup.

Before founding the company — which last year topped $1 billion in valuation to become China’s first autonomous driving “unicorn” — he’d already led an enviable life, but he was convinced that autonomous driving would be the real big thing.

Cao isn’t just going for the moonshot of fully autonomous vehicles, which he says could be 20 years away. Instead, he’s taking a two-legged approach of selling semi-automated software while investing in research for next-gen self-driving tech.

Cao, pronounced ‘tsao’, was pursuing his Ph.D. in engineering mechanics when an opportunity came up to work at Microsoft’s fundamental research arm in Asia, putatively the “West Point” for China’s first generation of artificial intelligence experts. He held out there for more than four years before quitting to put his hands on something more practical: a startup.

“Academic research for AI was getting quite mature at the time,” said now 33-year-old Cao in an interview with TechCrunch, reflecting on his decision to quit Microsoft. “But the industry that puts AI into application had just begun. I believed the industrial wave would be even more extensive and intense than the academic wave that lasted from 2012 to 2015.”

In 2015, Cao joined SenseTime, now the world’s highest-valued AI startup, thanks in part to the lucrative face-recognition technology it sells to the government. During his 17-month stint, Cao built the company’s research division from zero staff into a 100-people strong team.

Before long, Cao found himself craving for a new adventure again. The founder said he doesn’t care about the result as much as the chance to “do something.” That tendency was already evident during his time at the prestigious Tsinghua University, where he was a member of the outdoors club. He wasn’t particularly drawn to hiking, he said, but the opportunity to embrace challenges and be with similarly resilient, daring people was enticing enough.

And if making driverless vehicles would allow him to leave a mark in the world, he’s all in for that.

Make the computer, not the car

Cao walked me up to a car outfitted with the cameras and radars you might spot on an autonomous vehicle, with unseen computer codes installed in the trunk. We hopped in. Our driver picked a route from the high-definition map that Momenta had built, and as soon as we approached the highway, the autonomous mode switched on by itself. The sensors then started feeding real-time data about the surroundings into the map, with which the computer could make decisions on the road.

momenta

Momenta staff installing sensors to a testing car. / Photo: Momenta

Momenta won’t make cars or hardware, Cao assured. Rather, it gives cars autonomous features by making their brains, or deep-learning capacities. It’s in effect a so-called Tier 2 supplier, akin to Intel’s Mobileye, that sells to Tier 1 suppliers who actually produce the automotive parts. It also sells directly to original equipment manufacturers (OMEs) that design cars, order parts from suppliers and assemble the final product. Under both circumstances, Momenta works with clients to specify the final piece of software.

Momenta believes this asset-light approach would allow it to develop state-of-the-art driving tech. By selling software to car and parts makers, it not only brings in income but also sources mountains of data, including how and when humans intervene, to train its codes at relatively low costs.

The company declined to share who its clients are but said they include top carmakers and Tier 1 suppliers in China and overseas. There won’t be many of them because a “partnership” in the auto sector demands deep, resource-intensive collaboration, so less is believed to be more. What we do know is Momenta counts Daimler AG as a backer. It’s also the first Chinese startup that the Mercedes-Benz parent had ever invested in, though Cao would not disclose whether Daimler is a client.

“Say you operate 10,000 autonomous cars to reap data. That could easily cost you $1 billion a year. 100,000 cars would cost $10 billion, which is a terrifying number for any tech giant,” Cao said. “If you want to acquire seas of data that have a meaningful reach, you have to build a product for the mass market.”

Highway Pilot, the semi-autonomous solution that was controlling our car, is Momenta’s first mass-produced software. More will launch in the coming seasons, including a fully autonomous parking solution and a self-driving robotaxi package for urban use.

In the long run, the startup said it aims to tackle inefficiencies in China’s $44 billion logistics market. People hear about warehousing robots built by Alibaba and JD.com, but overall, China is still on the lower end of logistics efficiency. In 2018, logistics costs accounted for nearly 15 percent of national gross domestic product. In the same year, the World Bank ranked China 26th in its logistics performance index, a global benchmark for efficiency in the industry.

momenta

Cao Xudong, co-founder and CEO of Momenta / Photo: Momenta

Cao, an unassuming CEO, raised his voice as explained the company’s two-legged strategy. The twin approach forms a “closed loop,” a term that Cao repeatedly summoned to talk about the company’s competitive edge. Instead of picking between the presence and future, as Waymo does with Level 4 — a designation given to cars that can operate under basic situations without human intervention — and Tesla with half-autonomous driving, Momenta works on both. It uses revenue-generating businesses like Highway Pilot to fund research in robotaxis, and the sensor data collected from real-life scenarios to feed models in the lab. Results from the lab, in turn, could soup up what gets deployed on public roads.

Human or machine

During the 40-minute ride in midday traffic, our car was able to change lanes, merge into traffic, create distance from reckless drivers by itself except for one brief moment. Toward the end of the trip, our driver decided to grab the wheel for a lane change as we approached a car dangerously parked in the middle of the exit ramp. Momenta names this an “interactive lane change,” which it claims is designed to be part of its automated system and by its strict definition is not a human “intervention”.

“Human-car interaction will continue to dominate for a long time, perhaps for another 20 years,” Cao noted, adding the setup brings safety to the next level because the car knows exactly what the driver is doing through its inner-cabin cameras.

“For example, if the driver is looking down at their cellphone, the [Momenta] system will alert them to pay attention,” he said.

I wasn’t allowed to film during the ride, so here’s some footage from Momenta to give a sneak peek of its highway solution.

Human beings are already further along the autonomous spectrum than many of us think. Cao, like a lot of other AI scientists, believes robots will eventually take over the wheel. Alphabet-owned Waymo has been running robotaxis in Arizona for several months now, and smaller startups like Drive.ai are also offering a similar service in Texas.

Despite all the hype and boom in the industry, there remains thorny questions around passenger safety, regulatory schema and a host of other issues for the fast-moving tech. Uber’s fatal self-driving crash last year delayed the company’s future projects and prompted a public backlash. As a Shanghai-based venture capitalist recently suggested to me: “I don’t think humanity is ready for self-driving.”

The biggest problem of the industry, he argued, is not tech-related but social. “Self-driving poses challenges to society’s legal system, culture, ethics and justice.”

Cao is well aware of the contention. He acknowledged that as a company with the power to steer future cars, Momenta has to “bear a lot of responsibility for safety.” As such, he required all executives in the company to ride a certain number of autonomous miles so if there’s any loophole in the system, the managers will likely stumble across it before the customers do.

“With this policy in place, the management will pay serious attention to system safety,” Cao asserted.

Momenta

Momenta’s new headquarters in Suzhou, China / Photo: Momenta

In terms of actually designing the software to be reliable and to trace accountability, Momenta appoints an “architect of system research and development,” who essentially is in charge of analyzing the black box of autonomous driving algorithms. A deep learning model has to be “explainable,” said Cao, which is key to finding out what went wrong: Is it the sensor, the computer, or the navigation app that’s not working?

Going forward, Cao said the company is in no rush to make a profit as it is still spending heavily on R&D, but he assured that margins of the software it sells “are high.” The startup is also blessed with sizable fundings, which Cao’s resume certainly helped attract, and so did his other co-founders Ren Shaoqing and Xia Yan, who were also alumni of Microsoft Research Asia.

As of last October, Momenta had raised at least $200 million from big-name investors including GGV Capital, Sequoia Capital, Hillhouse Capital, Kai-Fu Lee’s Sinovation Ventures, Lei Jun’s Shunwei Capital, electric vehicle maker NIO’s investment arm, WeChat operator Tencent and the government of Suzhou, which will house Momenta’s new 4,000 sq-meter headquarters right next to the city’s high-speed trail station.

When a bullet train speeds past Suzhou, passengers are able to see from their windows Momenta’s recognizable M-shape building, which, in the years to come, might become a new landmark of the historic city in eastern China.

Why Tesla and Uber won’t escape 25% tariffs — for now

Tesla and Uber both had requests for tariff relief rejected by U.S. trade officials, a decision that will force the companies to pay a 25% tariff or seek new suppliers.

Reuters was the first to report the decision by the office of the U.S. Trade Representatives. TechCrunch previously reported on the Trump administration’s refusal to exempt the “brain” of Tesla’s Autopilot technology from punitive import tariffs.

Last year, the Trump administration imposed 25% tariffs on a range of imports, including electronics, to try to reduce the U.S. trade deficit with China. Tesla and Uber are among the U.S. companies that have requested relief on those tariffs.

Tesla filed at the end of December a request for an exemption on the Model 3’s car computer, including its media control unit, connectivity board and advanced driver assistance system (ADAS) hardware. Uber was seeking an exemption on its Chinese-made electric bikes.

In a May 29 letter, the USTR denied Tesla’s requests, stating that the Model 3 car computer and center screen are products that are “strategically important” or “related to Made in China 2025 or other Chinese industrial programs.”

Made in China 2025 is China’s strategic plan to move away from manufacturing to produce higher-value goods, particularly in the areas of AI, electric vehicles and robotics. The White House has remarked that Made in China is a direct threat to U.S. domestic technology and automotive companies.

Tesla declined to comment on the decision.

Earlier this year, Tesla unveiled new custom chip designed to enable what it describes as full self-driving (FSD) operation for all of its new vehicles. Today, Tesla vehicles are not self-driving. 

However, the hardware is standard in all new Model 3, S and X vehicles and customers can pay an additional $6,000 for the FSD software package. The self-driving hardware lives within the Autopilot engine control unit, or ECU, a module that Tesla describes as the “brain of the vehicle.” This module is assembled in Shanghai, China, by a company called Quanta Computer.

Tesla warned that higher tariffs on the “brain of the vehicle” could cause economic harm to the company.

The other denial was actually a request by a Tesla supplier, SAS Automotive USA, that makes the center screen for the Model 3. The center screen is part of the overall media center unit and includes a 17-inch touchscreen that displays navigation, media, audio, climate control, energy display and all in-cabin controls. The screen is essentially a hub that allows the driver or passenger to control nearly all the functions of the Model 3.

Why is Andreessen Horowitz (and everyone else) investing in Latin America now?

Investments by U.S. venture capital firms into Latin America are skyrocketing and one of the firms leading the charge into deals is none other than Silicon Valley’s Andreessen Horowitz .

The firm that shook up Silicon Valley with potentially over-generous term sheets and valuations and an overarching thesis that “software is eating the world” has been reluctant to test its core belief… well… pretty much anywhere outside of the United States.

That was true until a few years ago when Andreessen began making investments in Latin America. It’s the only geography outside of the U.S. where the firm has committed significant capital and the pace of its investments is increasing.

Andreessen isn’t the only firm that’s making big bets in companies south of the American border. SoftBank has its $2 billion dollar investment fund, which launched earlier this year, to invest in Latin American deals as well. (Although the most recent SoftBank Innovation Fund investment in GymPass is likely an indicator that the fund, much like SoftBank’s “Vision” fund, has a pretty generous interpretation of what is and is not a Latin American deal.)

“We previously didn’t invest internationally, [because] we weren’t as well set up to help these companies,” says Angela Strange, a general partner at Andreessen Horowitz. “Part of the reason for why LatAm is proximity.”

China opens Nasdaq-style board to lure tech firms back home

China’s much-anticipated Science and Technology Innovation board officially launched in Shanghai today, marking Beijing’s major step in drawing high-potential tech companies to list at home.

The new Star Market, first announced by President Xi Jinping in November, is expected to be a key fundraising avenue for tech companies from an array of stages, given its criteria (link in Chinese) are less stringent than other domestic boards. Beijing has over the past year encouraged local firms to become more self-reliant in producing chips and other core technologies as an escalating trade war threatens to cut China off the U.S. supply chain.

The new startup board began taking applications in late March and have so far received applications from 122 companies, according to information from the Shanghai Stock Exchange .

The tech bourse opened as the Hong Kong Stock Exchange next door got a big boost. China’s ecommerce titan Alibaba has filed confidentially for a second listing in Hong Kong, according to reports from Bloomberg and Reuters on Thursday citing sources. A spokesperson for Alibaba declined to comment.

Rumors of Alibaba’s potential IPO have swirled for months, but the Hangzhou-based firm has recently accelerated its application process as the U.S.-China trade war intensifies, a person familiar with the matter told TechCrunch.

Other Chinese firms that want to be closer to home now have another option to raise equity. Through the new tech board, China will allow loss-making companies to list on an exchange for the first time. This will likely draw promising, pre-profit tech firms that would have otherwise chosen to list in New York for more lax regulations.

For example, unprofitable companies with an income of at least 300 million yuan ($43.43 million) from the previous year are allowed to list in Shanghai if they have a minimum market capitalization of 2 billion yuan and generated a cash flow of no less than 100 million yuan over the past three years.

The board will be the first to have adopted a “registration-based” IPO system designed to streamline applications and limit the securities authority’s influence over pricing and timing of a flotation.

Companies with a dual-class shareholding structure, which has proven popular with a range of tech giants including Facebook, Alphabet, Alibaba and JD.com, will be eligible to apply. Alibaba famously snubbed the Hong Kong Stock Exchange after the bourse rejected its application over its corporate structure. HKEX recently dropped its dual-class ban and admitted that Alibaba’s decision to list in New York had compelled it to rethink the restriction. 

Applicants that adopt the variable interest entities (VIE) structure, a controversial framework that many Chinese internet firms use to operate as domestic companies controlled by foreign entities, are also welcome to apply.

Telegram faces DDoS attack in China… again

The popular encrypted messaging service Telegram is once again being hit with a distributed denial of service (DDoS) attack in Asia as protestors in Hong Kong take to the streets.

For the last several days, Hong Kong has been overrun with demonstrators protesting a new law that would put the municipality more directly under the control of mainland China’s authoritarian government.

One of the tools that organizers have turned to is the encrypted messaging service, Telegram, and other secure messaging technologies as they look to evade surveillance measures by government officials.

Telegram first commented on the attack via Twitter roughly 17 hours ago in the late afternoon on Wednesday in Hong Kong.

The company went on to describe a distributed denial of service attack as when “your servers get GADZILLIONS of garbage requests which stop them from processing legitimate requests. Imagine that an army of lemmings just jumped the queue at McDonald’s in front of you – and each is ordering a whopper,” according to Telegram. “The server is busy telling the whopper lemmings they came to the wrong place – but there are so many of them that the server can’t even see you to try and take your order.”

This isn’t the first time that someone has tried to take down Telegram at a time when China was experiencing significant unrest. Four years ago, a similar attack struck the company’s service, just as China was initiating a crackdown on human rights lawyers in the country.

An article in the Hong Kong Free Press described the situation on the mainland, where the company’s web version of its app was blocked from servers in Beijing, Inner Mongolia, Heilongjiang, Shenzhen, and Yunnan.

At the time, a lawyer involved in human rights cases was made to confess on state television about his involvement in the malfeasance and lawyers’ use of Telegram to hide messages from surveillance.

According to the state-run newspaper China Daily, lawyers were using the Telegram app for “attacks on the [Communist] Party and government.”

At the time of the last attack, Telegram and its chief executive, Pavel Durov did not comment on who was to blame for the denial of service attacks.

Now, the outspoken chief executive isn’t mincing any words. “IP addresses coming mostly from China,” Durov tweeted. “Historically, all state actor-sized DDoS (200-400 Gb/s of junk) we experienced coincided in time iwth protests in Hong Kong (coordinated on @telegram). This case was not an exception.”

 

As payment and surveillance technologies collide, free speech could be a victim

Anyone who has traveled to Hong Kong knows how ubiquitous the Octopus Card is. Distributed by a company which is majority owned by the Hong Kong government, the cards are used to pay for everything from public transit to groceries, to Starbucks coffee. It’s an incredible payment solution that’s used by almost everyone in the city.

But as hundreds of thousands of people gather in the city center to protest against proposed regulations that residents view as tearing down the last protections against the authoritarian control of mainland China, those same citizens are viewing their Octopus cards in a different light.

Protestors in Hong Kong are waiting in line to pay cash for a single-use card rather then use an Octopus card that’s tied to their bank accounts and identity. Their fear, as QZ journalist Mary Hui notes, is that the government will track their data and location.

Already, China’s security apparatus are leaning on citizens. In one instance they allegedly requested that the organizer of a large Telegram group open their phone and reveal their contacts.

Potential privacy concerns are a huge downside for cashless technology. While electronic payments can make things more convenient for the people that can afford it, it opens up new avenues for government or corporate surveillance and monitoring.

On the mainland, the Chinese government is already experimenting with social credit scoring that can affect a citizen’s access to everything from home and personal loans to public transportation.

Examples like this are another argument against the push for cashless systems.

Indeed, as some cities in the U.S. consider — or enact — bans on cashless stores, companies are shifting their policies on how to develop the technology. Philadelphia became the first city to ban cashless stores in March and the state of New Jersey quickly followed suit. Other cities considering the bans include New York, San Francisco and Chicago.

As nations like China and India push to go cashless, it’s worth noting that the ease of use promised by integrated electronic payment systems can be coupled with increasingly sophisticated forms of surveillance. Locking citizens in to a model where all financial transactions can be tracked — or are intrinsically linked — to a smartphone, may be great for governments, but it’s potentially terrible for democracy and its support for free speech and assembly.

 

Xiaomi’s budget Mi Band wearable now sports a color screen and voice assistant

Xiaomi has refreshed its smart fitness tracker and unveiled a range of other gadgets in China, giving a glimpse at some of its affordable products that it will likely be bringing to other markets in the coming future.

The wearable fitness tracker, called Mi Smart Band 4, sports a bigger AMOLED display (39.9% increase in screen size) than its popular year-old predecessor and features support for XiaoAI, the company’s voice assistant that can be activated with a voice command.

The bigger display, which supports 16 million colors and 77 customized themes, will allow users to quickly glance at notifications and fitness stats. The tracker also supports offline payments via AliPay. It is still very affordable, priced at just RMB 169 (roughly $24.5).

Coupled with the long durability that previous generation smart bands have offered, it is no wonder that the Chinese giant has emerged as the second largest wearable maker in the world. According to IDC, Xiaomi shipped 7.5 million wearable units in the waning quarter of last year, second only to Apple, which shipped 16.2 units.

The company has also launched a smart lock, dubbed Mi Smart Door Lock, that offers up to six unlocking modes and allows users to track its status in real time. It also works with the NFC variant of Mi Smart Band 4 that when paired can serve as a key. It is priced at RMB 1699 (roughly $245).

The announcement comes as Xiaomi, which went public last year and is increasingly trying to expand its services business, struggles to meet analysts expectations. The Chinese group, once thought of worth over $100 billion, has a market cap of under $30 billion currently.

Xiaomi also launched a smart washing machine, induction cooker, e-skate hover, digital translator, and pens. The washing machine, called Mi Smart Combo Wash Dryer, sports OLED smart buttons and supports voice controls for activating or halting a washing cycle. It is priced at RMB 2999 (roughly $433).

Shaped like a smartphone, the Mi AI Translator, comes preloaded with Oxford and Collins dictionary as well as Chinese dictionaries. It is aimed at people who are trying to learn a new language and want to improve their pronunciation. It supports real-time translation between 34 languages. It starts at RMB 499 (roughly $72).

Alibaba’s Ant Financial and Hellobike team up on $145M e-bike battery JV

Shared e-scooters aren’t just gaining popularity in the United States; they’re hitting the streets of China, too. Recognizing the possibility that some people just don’t want to pedal that last mile, China’s transportation startup Hellobike is setting up a 1 billion yuan ($145 million) joint venture with Alibaba’s financial affiliate Ant Financial and battery maker CATL to provide battery-swapping services for scooters.

That’s according to an announcement from Hellobike on Wednesday, though it did not specify individual shares of the three partners.

Hellobike, backed by Ant Financial, has evolved from a bike sharing service into a one-stop app to include ride-hailing and other transportation means. That puts it in competition with car-hailing leader Didi Chuxing and Mobike, the bike sharing service now owned by Meituan Dianping.

Three-year-old Hellobike claims it’s now serving more than 200 million users in some 360 cities around China. It has its eye set on electric bikes for some time, especially when it comes to capturing users in smaller cities where buildings are more spread out. Its existing battery-swapping service, according to the announcement, can fulfill the energy need of more than two million bikes daily, and the JV will potentially give its network a boost.

Contemporary Amperex Technology, or CATL, seems like a key partner for Hellobike as it’s China’s largest battery maker for electric vehicles and has years of experience supplying to local carmakers as well as more recently international players Volvo and Toyota.

“China is ‘a country on two wheels,” said Yang Lei, Hellobike’s co-founder and chief executive officer, adding that there are one billion trips that are completed on two-wheelers in China each day. For some context, the country has a population of about 1.4 billion.

Many people in China own electric scooters. Food delivery workers ride them to navigate through rush hour traffic. Grandparents send their grandchildren to school on sun and rain-proof e-bikes. The problem, Hellobike claims, is that private bikes and their batteries can get stolen and charging stations are hard to find. What’s more, most batteries for scooters on the market currently fail to meet international environmental standards.

The three-way joint venture hopes to solve these issues by putting up battery-swapping infrastructure across the country. Users will scan a bar code at one of the swapping stations, take out a fresh, charged battery to replace their drained one, and pay via Ant’s e-wallet, which claims to have one billion users so most people can access the service without downloading a new app.

UK carriers warn over ongoing Huawei 5G uncertainty: Report

UK mobile network operators have drafted a letter urging the government for greater clarity on Chinese tech giant Huawei’s involvement in domestic 5G infrastructure, according to a report by the BBC.

Huawei remains under a cloud of security suspicion attached to its relationship with the Chinese state, which in 2017 passed legislation that gives authorities more direct control over the operations of internet-based companies — leading to fears it could repurpose network kit supplied by Huawei as a conduit for foreign spying.

Back in April, press reports emerged suggesting the UK government was intending to give Huawei a limited role in 5G infrastructure — for ‘non-core’ parts of the network — despite multiple cabinet ministers apparently raising concerns about any role for the Chinese tech giant. The UK government did not officially confirmed the leaks.

In the draft letter UK operators warn the government that the country risks losing its position as a world leader in mobile connectivity as a result of ongoing uncertainty attached to Huawei and 5G, per the BBC’s report.

The broadcaster says it has reviewed the letter which is intended to be sent to cabinet secretary, Mark Sedwill, as soon as this week.

It also reports that operators have asked for an urgent meeting between industry leaders and the government to discuss their concerns — saying they can can’t invest in 5G infrastructure while uncertainty over the use of Chinese tech persists.

The BBC’s report does not name which operators have put their names to the draft letter.

We reached out to the major UK mobile network operators for comment.

A spokesperson for BT, which owns the mobile brand EE — and was the first to go live with a consumer 5G service in the UK last month — told us: “We are in regular contact with UK government around this topic, and continue to discuss the impact of possible regulation on UK telecoms networks.”

A Vodafone spokesperson added: “We do not comment on draft documents. We would ask for any decision regarding the future use of Huawei equipment in the UK not to be rushed but based on all the facts.”

At the time of writing Orange, O2 and 3 had not yet responded to requests for comment.

A report in March by a UK oversight body set up to evaluate Huawei’s security was damning — describing “serious and systematic defects” in its software engineering and cyber security competence, although it resisted calls for an outright ban.

Reached for comment on the draft letter, a spokesperson for the Department for Digital, Culture, Media and Sport told us it has not yet received it — but sent the following statement:

The security and resilience of the UK’s telecoms networks is of paramount importance. We have robust procedures in place to manage risks to national security and are committed to the highest possible security standards.

The Telecoms Supply Chain Review will be announced in due course. We have been clear throughout the process that all network operators will need to comply with the Government’s decision.

The spokesperson added that the government has undertaken extensive consultation with industry as part of its review of the 5G supply chain, in addition to regular engagement, and emphasized that it is for network operators to confirm the details of any steps they have taken in upgrading their networks.

Carriers are aware they must comply with the government’s final decision, the spokesperson added.

At the pan-Europe level, the European Commission has urged member states to step up individual and collective attention on network security to mitigate potential risks as they roll out 5G networks.

The Commission remains very unlikely to try to impose 5G supplier bans itself. Its interventions so far call for EU member states to pay close attention to network security, and help each other by sharing more information, with the Commission also warning of the risk of fragmentation to its flagship “digital single market” project if national governments impose individual bans on Chinese kit vendors.

Luxembourg to get €100M investment from Chinese payments startup Pingpong

For financial services firms looking to enter Europe, Luxembourg has historically been a popular anchoring point for its political and economic stability as well as a favorable regulatory environment. Another bucketload of capital is coming to the country after Chinese fintech startup Pingpong announced to invest more than €100 million ($113 million) in Luxembourg in the coming years.

Founded in 2014, Pingpong has been celebrated by its home city Hangzhou — also Alibaba’s backyard — as a pioneer in the country’s booming cross-border ecommerce sector. Backed by one of China’s largest investment banks CICC, the startup collects payments for Chinese exporters selling through Amazon, Wish, Shopee, Newegg and some other 14 ecommerce platforms around the world, which means clearing local regulatory hurdles is key to its business.

Its European ambition does not stop with Luxembourg. Luo Yonglong, a partner at Pingpong, said at a Saturday event that within three years, the company’s accumulative investment on the continent will exceed 50 billion yuan (€6.39 billion or $7.21 billion).

Pingpong unveiled the proposed infusion at the weekend event centered around the Chinese government’s Belt and Road Initiative, of which Luxembourg is a member. The financial injection provides clues to the role that private businesses play to help China link up more countries to BRI. It also seems like a timely boost to the alliance between the two countries, arriving just three months after Luxembourg agreed to join China’s ambitious global infrastructure program, and at a time when China’s trade tensions with the U.S. run high.

Pingpong’s tie-up with Luxembourg dates further back to 2017 when it secured a payments license in the putative financial gateway of Europe, thus giving it access to facilitate payment transactions between Chinese merchants and consumers throughout the continent.

“We are actively following the country’s Belt and Road Initiative to empower Chinese businesses through innovation in the cross-border ecosystem,” said Luo in a statement. “This will help companies complete their digital transformation and be more competitive abroad.”

With the mammoth funding also comes continued collaboration between Luxembourg and Pingpong on various fronts, including Chinese exports to the European Union and Pingpong’s local payments and virtual banking projects. The company also said it will work to secure an institution license for virtual currency under the purview of the EU and will set out to put up a digital payments bank.