Beijing ThunderStone Technology Co Ltd, China's leading karaoke system supplier by market share, announced it has completed a nearly 200 million yuan ($29 million) series B fundraising round, amid growing demand in the entertainment industry.

"ThunderStone will continue to increase spending on product research and development to remain a leader as the industry upgrades," said Wang Chuan, chairman of Thunder-Stone and co-founder of Xiaomi Corp.

China Minsheng Investment Group led the fundraising, with other investors including Morningside Venture Capital, ThunderStone founder Ma Jie and Xiaomi-affiliated Beijing Yuemi Technology Co Ltd.

The proceeds will be used for channel expansion, product research and development, end-customer product updates, cloud ecosystem construction and music library expansion, the company said.

Liu Qiuming, president of China Minsheng Investment Group, said Thunder-Stone has deep understanding of the karaoke market, leading the fields of mini KTV and home KTV.

"Amid the fierce competition in the online entertainment market, ThunderStone has a firm handle on the current consumption upgrade trends. And it provides a wide range of products to cater to different customer groups," Liu said.

Founded in 1996, Thunder-Stone accounts for more than 60 percent of the domestic market share for karaoke systems, covering around 40,000 KTV parlors, according to company figures.

The company launched its WOW mini KTV programs at the end of 2016, to cater to younger generations. Now it has around 10,000 mini KTV booths in public areas nationwide.

The glass-enclosed mini KTV house usually covers around 2 square meters and payment can be made via apps such as WeChat and virtual wallet Alipay. The booth will automatically send recordings to users via their WeChat social media accounts, allowing them to share their experience on networking platforms.

During the past year, the mini KTV houses boom has swept across the nation, rolling out in shopping malls, cinemas and even restaurants in an effort to bring back the past glory of KTV bars.

According to a report released by market research company iiMedia Research, the Chinese mini KTV market value reached 3.52 billion yuan in 2017. The report predicted the market would expand rapidly in the next two years, hitting more than 14 billion yuan by 2019.

The key is to improve users' experiences according to current trends, said Dang Jianwei, lecturer at the business school at the University of International Business and Economics in Beijing.

"To maintain sustainable development, suppliers still need to provide specific services for targeted consumers," Dang said.