How SeaTable deals with China’s backlash against the West

Chinese startups seeking to succeed in the West now face a major hurdle: their connection to home. The scrutiny of TikTok in the US over its governance structure and data practices is a poignant reminder that eschewing Chinese ties can go a long way in gaining recognition overseas.

In their expansion to the West, Chinese startups are now separating from home, as we have detailed in a series of articles (here and here). This process may include moving their controller to another country, moving to overseas cloud centers, and moving their executives overseas.

Against the backdrop of decoupling, one company is taking an unconventional path. Instead of trying to disguise its Chinese identity, Seafile, a low-code app developer founded in 2012, has expanded internationally by establishing a symbiotic relationship with its German joint venture. SeaTable.

Since its founding in 2020, SeaTable has attracted about 200,000 users of its cloud-based database platform outside of China, while the local version of the software has about 500 customers, including the German Armed Forces, a corporation listed in the German Deutscher Aktien Index. . (DAX) and several universities.

Unlike many globalized Chinese startups that are fueled by large venture capital investments, Seafile has an enviable self-sustaining business. The company has not raised any external funding since it received a one million yuan (~$142,000) angel round from Matrix Partners China. ten years ago. Today it is profitable and finances all current SeaTable developments in-house. Seafile has 40 employees in China and 10 in Germany.

Relinquishing Control

In 2019, Seafile’s two Chinese co-founders, Daniel Peng and Jonathan Xu, approached their future partners, Christoph Dillick-Brenzinger and Ralph Dillick-Brenzinger, with an intriguing proposal: to form a joint venture to help Seafile grow overseas.

At the time, two German brothers who advised veterans had been helping Seafile distribute its other product, a sync and share solution, for several years. They were seduced by the opportunity to get a stake in a product they truly believed in, a low-code database tool that enables self-hosting.

SeaTable offers both cloud and on-premises solutions, a strategy it says sets it apart from industry giant Airtable.

“Europe is about data privacy, data sovereignty,” Ralph, CEO of SeaTable, told WND. “So there will be a lot of market demand in Europe for this product.”

The Dillick-Brenzingers rose to the challenge and founded SeaTable GmbH, in which Seafile holds a 50% stake, to maintain their commitment to product development while maintaining a clear separation from the German firm’s management and access to customer data.

Focusing on Europe, SeaTable is multilingual and available in English, German, French and Russian, while Spanish and Portuguese are under development. Language may seem like a non-essential feature, but in underserved markets with high purchasing power like France and Japan (as in the case of Airgram productivity tool), having a localized option can help a startup move forward. According to Ralph, SeaTable also boasts the capacity to store millions of records, compared to Airtable’s tens of thousands of records.

In retrospect, the two Chinese founders have chosen the best possible path for Seafile’s global expansion at a time when the public and government in the West are increasingly skeptical of the companies’ ties to China. But entrepreneurs who want to run an empire don’t let go so easily, much less dealing with partners who live thousands of miles away. As Ralph remarked, “I think there should be a lot of trust between the two sides.”

Data separation

Low-code SeaTable database platform. Image: SeaTable

Although Seafile is not involved in SeaTable’s day-to-day operations, it plays a key role by developing the Guangzhou-based database platform, a setup that is common among global technology firms that want to use China’s affordable and quality engineers.

“A team from China gives us a piece of software… that anyone can download from the Internet, from a repository, and we, the German team, work on it. The repository is somewhat similar to the dividing line. Everything on this side of the vault is run by Jonathan and Daniel, everything on the other side is run by us,” Ralph explained.

A repository in computer programming is a centralized digital repository that developers use to make and manage changes to an application’s source code.

The SaaS version of SeaTable is fully managed by a German joint venture and stores data in Europe. All settings and services are done in its German office, which handles everything from installing software, running updates, managing backups, troubleshooting, reading and interpreting logs, to optimizing system performance.

“The system is run by German citizens or Europeans. In addition to being made in China, SeaTable is as European as can be,” added the founder. “It’s funny that we all have hardware made in China…but Chinese software is in a difficult position in Europe.”

The German brothers admitted that SeaTable’s way of marketing is not the “safest”. While some customers are fine with its Chinese roots, others, including a ministry in France, have doubts about software originating in China. But this proactive approach sometimes leads to friendly discussions about new forms of cross-border collaboration that use software development in China on the one hand and localization efforts in target countries on the other.

“Some of the clients I’ve spoken to are completely oblivious to the Chinese origin of the SeaTable, and I reveal this to them. We don’t want to get into a discussion, and then at the very end it turns out that SeaTable is Chinese, and then they say, “Look, you should have told us before,” Ralph said.

“So we are very active in this and many clients find it interesting because in the early 2000s the typical joint venture model was that European and American companies would go to China and look for a Chinese partner to develop their business in China. Now we are an example of a Chinese company that has come to Europe to set up a joint venture. People understand that this is actually interesting, so they are curious to know more about it.”

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