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Baidu's initial investor continues VC foray
(Shanghai Daily)
Updated: 2006-02-06 11:42
Baidu.com Inc's excellent stock performance on Nasdaq in New York fueled the
development of the Chinese Internet industry last year, and now the Internet
search firm's initial investor has come to Shanghai to continue his venture
capital foray into other startup firms.
Jixun Foo, 37, is one of five managing directors of Granite Global Ventures,
which manages US$400 million at present.
"Personally speaking, the No. 1 thing for me this year is to move my life
(from Singapore) to Shanghai," Foo said at his office on Huaihai Road.
Since Foo was appointed to his current title in November, he has invested in
Blogcn, a popular Chinese Website which provides an online diary service.
The rise in the Internet population in China, more mobile phone users and
surging energy costs have made high-tech companies in the country hungry for
capital to fund their next-step development. That has attracted a flood of
venture capital firms to China to seek the "next Baidu."
In 2005, VC firms in China raised US$4 billion and top global players,
including Sequoia Capital (Google's investor), entered China for the first time.
Compared with South Korea, China is a bigger market with more opportunities
available, said Foo in fluent Mandarin. Granite's Chinese team, led by Foo,
looks at more than 100 potential startups every month.
"I did not
want to end my career as an engineer (for Hewlett-Packard), so I headed to the
VC sector," said Foo. "Now I really appreciate that I am able to read so many
innovative ideas every day."
During Foo's 10-year VC career, the spotlight was the investment he made in
Baidu when he worked for DFJ ePlanet.
"To be frank, I was not 100 percent sure whether Baidu's business model will
succeed but Robin Li's passion and focus solidified my confidence," said Foo.
"After making the choice, the principle I insist is to never intervene (in the
startup) if unnecessary."
Foo also pointed out that one of the major factors venture capitalists
scrutinize in a startup before deciding to pump funds in is the management team.
They also check out the technology the startup is involved in and market
opportunities, Foo said.
Since 2000, DFJ has invested US$14 million in Baidu. Foo also invited other
VC partners and Google to invest in Baidu then.
In DFJ, Foo also invested in Longcheer, a Shanghai-based handset designer now
listed in Singapore, and FocusMedia, which sells advertising time in buildings
and now listed on Nasdaq.
As part of his investment target, Foo plans to invest in 10 startups of
which he hopes that up to five of them will reap a return of one or two times
the initial investment while the other three to five firms will generate a
return of three to five times.
Energy and health care are new sectors worth paying attention to, Foo said.
Granite, founded in 2000, has made a US$6 billion profit from its successful
investments in startups to date, including Alibaba.com which merged with Yahoo
China later. Granite specializes in startups' expansion phase — stage two — in
the United States and Asia.
In addition to its investments in the United States, Granite was one of the
first VC firms to actively introduce US firms to new markets in Asia, and among
the first to fund startups in China.
"I have known and worked with Jixun for over eight years. His deep
understanding of the Asian market and his venture experience will strengthen our
presence in Asia, especially in China," Thomas Ng, another of Granite's managing
director, said.
Granite has also invested in blogcn.com, bokee.com and Chinacars.com in the
country to seek new opportunities.
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