The Next Web » Investment

Baidu receives $50 Million in Funding For Qiyi. China’s Answer to YouTube.

Vidyesh — Tue, 02 Mar 2010 09:46:33 +0000

Baidu, China’s own internet giant had announced its own Video channel website just two months back.Keeping all the censorship rules in mind, they planned to stream ad-supported video content, tapping the 162 million yuan ($23.73 million) worth of China’s online video market.

The site is called Qiyi. The direct competition for Qiyi would be China’s most famous video sites like Youku, Tudou, Sohu Video and 56.com.

Providence Equity Partners will invest $50 million into Baidu’s video company called Qiyi. Baidu will continue to maintain majority ownership in the company. And has appointed Yu Gong as the head of this company.

Providence has a history of financing media and entertainment projects and has earlier invested in companies including Hulu, Yankees Entertainment & Sports Network,and Warner Music Group. Along with investing it has great experience in managing businesses that distribute licensed content online.

Jonathan Nelson, Chief Executive Officer of Providence says .“We are very pleased to partner with Baidu and are confident that this new venture will become an industry leader, As the world’s largest Chinese language internet search company and also the dominant video search engine in China, Baidu has unmatched competitive advantages in its user base and traffic.The new venture will provide users with a first-class viewing experience, and will work with regulators to ensure the lawful distribution of professionally produced media and entertainment content on the internet.”

Qiyi will be following Hulu’s model and will not support user-Generated Content (UGC) and will solely concentrate on High-Definition, Copyrighted video content with the revenue flowing in from the video-advertisements. It’s expected Qiyi would host +1,000 licensed movies, +1,000 TV series along with thousands-hours long cartoon, documentary, TV programs etc and some of the content will be exclusive.

Chinese government to set-up VCs with private investors

Khaled AlSaleh — Sun, 29 Nov 2009 20:19:57 +0000

Despite recording significant growth, the Venture Capital industry in China is set to get a further boost thanks to a new plan announced by the Chinese Central government to channel VC funds to innovative companies with high-growth potential.

VC investments in China recorded significant growth quarter-on-quarter, almost tripling from $211 Million (1.4 Billion Yuan) in the second quarter to $630 Million (4.3 Billion Yuan) in the third quarter of this year.

A statement issued by the National Development and Reform Commission (NDRC) and the Ministry of Finance outlines a plan for collaboration between the central government, local governments and private investors to establish venture capital funds that could accelerate this growth further.

According to the statement, each of the funds will hold at least $37 Million Dollars (250 Million Yuan), though it does not elaborate on the number of funds that will be established. They will be required to invest in early-stage companies and those with a high-growth potential.

The capital for those funds will be provided through a combination of various government bodies and other investors.

The central government will provide no more than 20% of the total funds, the local governments should match or exceed the central government’s investment, while private investment from institutional, corporate or foreign investors will provide a minimum of 60%.

The government will not intervene in the management of those funds. Instead, a professional management institution that will be composed of at least three experienced venture capitalists will be tasked with the management of those funds

This plan follows an earlier announcement by the NDRC to launch VC funds with private investors totaling $1.32 Billion (9 Billion Yuan) and focused on supporting the technology and energy industries.

Details are still sparse, but it seems like an interesting initiative that could spur innovation in China.