China’s startups can now raise investment from the crowd on JD’s new equity crowdfunding site

JD, China’s second-biggest ecommerce company, announced today it is launching an equity crowdfunding platform. As opposed to traditional rewards-based crowdfunding, like Kickstarter or Indiegogo, backers of projects on JD Equity Crowdfunding will actually be able to buy a slice of equity in the company they’re supporting.

As of press time, nearly 20,000 investors have signed up.

The new site expands the range of offerings from JD Crowdfunding, which has become the biggest site in China for crowdfunding gadgets since rival platform Demohour pivoted to pre-sales. It falls under the JD Finance umbrella, which includes small loans for its merchants, insurance, and credit lines to its customers.

JD says it wants to give China’s entrepreneurs access to a broad range of early-stage investors as well as training and support for companies throughout the process. That means, in addition to the capital secured through crowdfunding, JD will provide training courses with seasoned investors and entrepreneurs and access to JD’s internet finance tools. And, of course, they’ll be able to sell their products on JD Mall.

"I know from personal experience how important it is for entrepreneurs to have access to knowledge and early funding," said Richard Liu, founder and CEO of JD. "As the leader in Chinese e-commerce, JD.com is ideally positioned to create a premium platform to give China’s early-stage companies access to resources and seed capital from a broad range of investors."

Each project will be led by a professional investment manager from a VC company or a company with similar experience. That person will be responsible for ensuring transparent communication between investors and the companies raising funds. Capital Today, ZhenFund, and Sequoia Capital have all already signed on.

In return for hosting the crowdfunding campaigns, JD will take a small equity stakes in each of the projects.

Here’s a quick overview of the first 11 companies on JD Equity Crowdfunding and their financing goals, which some of them have already met:

• Thunderobot – gaming laptops / RMB 13 million (US$2.1 million)
• Fastwheel – one-wheeled segways / RMB 4 million (US$650,000)
• WeBuzz – Social media and news app / RMB 4 million (US$650,000)
• Qingchujia – Online auction site / RMB 6 million (US$1 million)
• LesPark – Lesbian dating app / RMB 6 million (US$1 million)
• iBaking – baking ecommerce store / RMB 2 million (US$320,000)
• 10,000 Travels – overseas travel and tourism / RMB 2.5 million (US$400,000)
• Kuaizi Travel – travel and tourism app / RMB 3 million (US$320,000)
• Jacket’s Shrimp – spicy food delivery app / RMB 4 million (US$650,000)
• Eachpal – Location-based safety wearable for kids / RMB 3.5 million (US$560,000)
• Cool Bird – travel and tourism app / RMB 3 million (US$480,000)

JD’s rewards-based crowdfunding platform, JD Coufenzi, has so far helped companies raise more than RMB 280 million (US$45 million), with an over 90 percent success rate. Launched in July last year, JD states it contributes one third of all the money raised through crowdfunding in China.

Alibaba and Baidu have both launched crowd-investing platforms as well, though these are more focused on movies, games, and TV shows rather than gadgets and startups.