Behind the scenes of China’s biggest VC deals

Youku video hosting website homepage on laptop screen / Photo credit: Keitma

This article is part of Tech in Asia’s partnership with GGV Capital’s 996, a podcast about tech and entrepreneurship in China hosted by Hans Tung and Zara Zhang. This is heavily revised from the original show transcripts. For the full interview, go here. You can also listen to the 996 Podcast by searching “996” in any podcast app.

Disclaimer: GGV Capital has invested in Grab, Didi, Youku-Tudou, UCWeb, Xpeng, Hellobike, Tujia, Xiangwushuo, Zuiyou, and Kujiale.

Jixun Foo is the managing partner at GGV Capital in China. He has more than 20 years of experience in venture capital investing, focusing on travel, transportation, social media, commerce, and enterprise services.

Foo has led GGV Capital’s investments in Grab, Didi, Youku-Tudou, and UCWeb, among others, and currently serves on the boards of Xpeng, Hellobike, Tujia, Xiangwushuo, Zuiyou, and Kujiale. He was on the board of Baidu for more than eight years.

In this episode, he discusses the insider story behind the Youku-Tudou deal (the largest merger in Chinese tech history at the time), the thought processes behind his investments in Baidu and Hellobike, and some insights on M&As and exits.

Jixun Foo, managing partner at GGV Capital China

How did you find your way to venture capital?

It’s a bit of a twist and turn. I first had the idea of being in venture capital when I was in Hewlett-Packard. I was an R&D engineer and spent some time in Silicon Valley, looking at all the innovations happening then. That was around 1995 or 1996.

I thought innovation had to take off in Asia too. So, I figured out whether I wanted to be an entrepreneur or an investor. There weren’t a lot of startups and venture capital and I thought a good stepping stone would be to join a VC firm.

But when I sent my CV, nobody really bothered to call back. So, the stepping stone for me was really the National Science and Technology Board of Singapore (NSTB), where I started an incubator. I did that for about four or five years.

The opportunity for a VC career really came in 2000 when DFJ ePlanet Ventures started to expand.

One of the first deals you did at DFJ was Baidu. Why did you invest in them?

Through the DFJ network, I was referred to Baidu co-founder Robin Li. I found the company interesting and went to Beijing to visit their office. I still remember it to be a pretty rundown place, and they had around 13 or 14 people then.

Why invest? I just felt the passion, looking at the environment and how these guys left their families behind to make a difference in the market. That gave me the view that these guys could do it. That’s on the people side.

How did you structure the Youku-Tudou deal?

What made you believe that it was a good idea to invest in Hellobike?

Is the first-mover advantage that important or should you wait for the right signals to decide when to double down on a category?

Should entrepreneurs start thinking about an exit plan from day one or later?