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23 May 2016

GCV Powerlist 2016: Yimin (Peter) Fang, Baidu #8

A member of the top 25 from the Global Corporate Venturing Powerlist

Author: James Mawson, Editor-in-chief

The name Baidu was derived from the last line of a poem, Green Jade Table in The Lantern Festival, written 800 years ago meaning “persistent search for the ideal” and in Yimin (Peter) Fang, the China-based search engine provider has found an ideal investor.

Fang, senior director of corporate development at Baidu leading investments and acquisitions, used to work for US search engine peer Google’s first China president, Kai-Fu Lee, as chief technologist and an investment director at Lee’s early-stage company-building platform Innovation Works.

He joined Baidu in 2014 after a few months at Fidelity’s Asian corporate venturing unit in order to cover strategic investments and mergers and acquisitions, with a focus on “core technology – adtech, big data, mapping, fintech, deep learning and so on – mobile services, financial services, [and] enterprise services,” according to his LinkedIn account. In addition to China, Fang also covers international investments including the US, Europe and Israel, as Baidu plans to earn half its revenue outside China by 202, according to a MIT Technology Review article.

He has certainly been busy inside and outside of China.

In the US, Baidu’s deals include ride-sharing app Uber and app software TrustGo.

Fang’s Israeli deals have included a multimillion-dollar investment in Taboola to help bring native advertising into China. Baidu’s investment came just after Taboola raised $117m  in February last year.

Earlier Baidu had co-led a $5m round in Tonara, an Israel-based music education technology company, with Fang joining the board. The other co-lead in Tonara was Israel venture capital firm Carmel Ventures, which had earlier closed a $194m fund from a consortium including Baidu and Chinese corporate peers Qihoo 360 and Ping An.

Baidu’s first investment in Israel was a $3m round in Pixellot, which develops video cameras that can be controlled remotely to provide footage of sports and music events.

Elsewhere, Baidu has backed Japan-based mobile emoji app Simeji and Finland-based indoor mapping company IndoorAtlas.

However, it is in China that most of Baidu’s deals still occur. In March, Baidu joined the second round for Exands, a China-based wifi service provider, while in June last year, Baidu invested $11.5m in Qianhai Mobile, an affiliate of the Chinese media firm ChinaVision providing internet connectivity for commuters on bus service routes located across 18 cities, and undisclosed amounts in wireless services Ivifi and 16Wifi.

Other deals, such as travel provider Ctrip and Fun Living Technology and biotech Yihu cover the range of Baidu’s interests.

Ctrip was one of the most significant as its merger in October with Qunar, a search engine for travel reservations, brought together a company with nearly 70% of all revenues generated by the nation’s online travel agents, with Baidu holding two board seats and an equity stake.

“It is natural for the BAT [Baidu, Alibaba and Tencent] companies to seek monopolies,” said an employee of Baidu’s strategic business department to news provider Caixin. “Investment is a weapon they can use” against other companies, the employee added.

It is a weapon, Baidu and other China-based CVCs have learned how to use first-hand. Baidu’s backers have included legendary US venture capitalist Tim Draper from DFJ and storied corporate venturer Hugo Shong from IDG Capital Partners.

Draper said: “I have made it my practice to spread venture capital and entrepreneurship throughout the world. I have trained hundreds of VCs. Our enthusiasm for startups must have rubbed off [on Baidu].

“Corporate VC is different though. It often is not run for the long term. Robin [Li, Baidu’s co-founder and chairman] is a long-term player. I believe if he goes after VC, he will rival Intel Capital as one of the top corporate VC players.”

When asked about how China’s highly competitive internet scene might be forcing or shaping a unique venture market, Draper added: “I think it is all wonderful and good for the Chinese economy. I believe VC is potentially the highest and best use of capital in the world.”

In September and October, according to a Baidu investment record obtained by Caixin, the search giant invested more than $600m in five internet companies, including Ctrip. Expanding into non-internet services and then linking these services to the search business is a core strategy for Baidu, Caixin said, and referenced Li saying his company wanted to do more to connect people with the information they needed by using its search engine as a springboard for a broader range of services.

Fang’s experience is certainly broad as it covers electronic payments, gaming and communication during stints from before 2011 to the mid-1990s at 99Bill, NetEase and Edelman, respectively.

According to Wikipedia, Li has said the company’s name was chosen as the poem, Green Jade Table in the Lantern Festival, compared the search for a retreating beauty amid chaotic glamour with the search for one’s dream while confronted by life’s many obstacles.

Fang certainly seems to be helping Baidu achieve its dreams so far.

 

Baidu’s investment activity since the beginning of 2015

Baidu’s investment activity since the beginning of 2015

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