keynote speech given at GSMA Mobile World Congress Shanghai 2015 on China Innovation (http://www.mwcshanghai.com/conference-agenda/)

1. China Innovation:
Disruption, not Duplication
Bruno Bensaid
15 July 2015

2. 布鲁诺 (Bu Lu Nuo)
INSEAD/East China Normal U./ Aerospace Engineer
+ 15 Years
Investment banker, former VC
Angel Investor
Social Entrepreneur &
Community builder
Mentor to incubators & Startups
Public Speaker

3. Pioneering investment banking advisory firm focusing on cross-border
M&A and capital raising transactions between China/Asia & Europe.
Shanghaivest was set up in 2010 by veterans from the M&A and
technology investment industries.
Shanghaivest has presence in Shanghai, Paris and San Francisco
Building cross-border synergies in :
1. Technology and advanced manufacturing (Internet and telecom,
automotive, aeronautics, electronics, clean energy, etc.)
2. Cosmetics, Luxury, Retail
3. Healthcare
Clients include SMEs, funds looking for cross-border exit or expansions
strategies (Europe -> China, China -> Europe, Europe -> US, etc.)
Shanghaivest at a glance

4. R&D Center & Assets
In the
Acquisition of
Some Achievements in the Mobile Industry
In Raising Series A
from

5. Launched in 2006, MobileMonday
(Beijing + Shanghai) is a pioneer mobile
networking community in China.
Hosting regular events with 100+ guests.
30+ events since 2006
Organizer of China-wide Competition
during Mobile World Congress Shanghai
since 2011
Partner of Choice for:
+
The Largest independent group of
angel investors in Mainland China,
now expanded into Hong Kong and
Singapore
Over 100 angels across the region
30+ portfolio co., in Asia and US
Syndicating deals up to $1 Mil
Average size deals: $150K-200K
Partner of Choice for:

6. Fueling Innovation: a vibrant investment community 1/3
Home grown super angels and funds have taken center stage in
China’s tech scene and drive innovation
Millionaire/billionaire angels: e.g. New Oriental’s co-founders Xu
Xiaoping and Wang Jiang created their own funds (Zhen Fund), former
Kingsoft CEO Lei Jun launched superstar startups, like UCWeb, Joyo
(purchased by Amazon), YY, Xiaomi etc
Foreign-led angel groups, funds or accelerators are sprouting, and
bringing together foreign and local entrepreneurs on their quests of
the local digital market. On the hardware side, Shenzhen-based
accelerator HAX offers access to widest hardware ecosystem available
o Angelvest, a 100-strong angel investor network, originating from Shanghai, has
invested in over 30 companies
o Chinaccelerator (software accelerator in Shanghai) and HAX (hardware accelerator
in Shenzhen) backed by SOS Ventures.

7. Local corporate superstar CEOs have also had their
(successful) way at joining the innovation investment
bandwagon and used their celebrity to raise capital and
attract top quality project deal flow and employees:
o Innovation Works (IW): created in 2009 by Ex-Google China CEO,
Canadian-Taiwanese Lee Kai Fu (50+ million Weibo followers). IW
started by incubating handpicked projects, then raised several funds to
support the growth of these “gems” (e.g. Wandoujia, China’s largest
app store, raised $120 Mil). Lee Kai Fu raised over $385 Mil in 2 funds
o Raymond Yang, ex-CEO of Linktone, the first Chinese internet company
to IPO in the US, later went on to found West Summit Capital, a $400
Mil US-China cross-border fund
o Former Alibaba CEO, David Wei, set up Vision Knight Capital in 2012. its
second fund closed $550 million fundraising within four months only
Fueling Innovation: a vibrant investment community 2/3

8. Internet companies setting up corporate VC funds are
challenging ecosystems and pushing innovation forward:
o Tencent earmarked $1.5 Bil to small and large scale investments in
China and overseas since 2011…
o Qunar.com (online travel company acquired by Baidu in 2011, and IPO
in 2014) launched a U$160M incubator fund to help entrepreneurs in
the online travel space in 2014
o Xiaomi is heavily investing in content ($290 Mil co-investment in iQiyi),
wearables ($35 Mil injected in Huami) or even IP / patents ($35 Mil co-
investment with Kingsoft and others to create a pure IP fund).
o Qihoo 360 is to establish a $60M Internet-Of-Things Venture Fund and
is also becoming a limited partner in $197 Mil Israel-based Carmel
Ventures, along with Baidu and Ping An Insurance….
Fueling Innovation: a vibrant investment community 3/3

9. Top local universities and governments are creating innovative
cooperation models, including venture funding:
o In 2001, Tsinghua University set up Tsinghua Science Park Business
Incubator, Tsinghua Science Park Technology Asset Management, and
Tuspark Ventures (raised 3 funds since 2006)
o Tsinghua University’s x-lab, an accelerator program launched in April
2013, with 80+ teams in the program at end of 2013, is aiming to expand
from 500m² to 5,000m² within 3 years!
o Virtue Inno Valley, a Tsinghua-affiliated (x-lab alike) accelerator
Privately or publicly backed co-working spaces:
o Government-backed Z-innoway is a CNY 200 million, 45,000m² project. It
covers 339 startups. 123 have raised funding
o 3W is one of the accelerators operating in Z-innoway
o 36KR, Cheku Café, Moment Café, Bingo Café etc, are among the cafés/
co-working space / media outlets / accelerators
Fueling Innovation: Government Fully Playing Their Role

10. 3.5
4.0
5.0
3.0
6.7
7.3
5.0
4.2
13.6
2006 2007 2008 2009 2010 2011 2012 2013 2014
China VC investments (Bil USD)
Source: Dow Jones VentureSource, startintx. Tribute: Nicolas Du Cray, Iris Capital
Large VC rounds to finance Chinese unicorns (麒麟 Qilin)
Marketplace, Mobile and E-commerce are Key Topics

11. 520
574
625
672
704
500
550
600
650
700
750
2014 2015F 2016F 2017F 2018F
smartphone users (millions)
A Key Innovation Driver: Mobile-First Market & large
Smartphone adoption (700 Mil by 2018, 50% of population)
Source: eMarketer. Tribute: Nicolas Du Cray, Iris Capital

12. China’s Early King Innovator: Tencent’s Wechat

13. Wechat, initially a mobile messaging platform, now
ubiquitous (PC, Mac + Android/iOS/WinOS)

14. True innovation
-> Versatility
Providing voice,
video, streaming,
walkie-talkie,
emoticons, radar,
group chats, web
chat, broadcast..)
+
Becoming a
platform (from
ordering food,
taxi, services, m-
commerce*
*Full platform only
available in China for now

15. Clone Wars Lead to Innovation: Uber competitor, Didi-Kuaidi
integrating competing payment platforms & integrating with social
networking platform Wechat, launching carpooling app, raising Bil $
Source:Technode

16. Incorporates data from Alibaba’s credit rating system Sesame Credit to better
secure the safety of users + provides more personal experience to landlords
and tenants
China’s Airbnb Clone Xiaozhu Secures $60M USD Series C Funding
-> Building trust into the system through Alibaba Partnership
Source:Technode

17. Chinese Offline Payments Giant Lakala Taps $240M USD In New
Financing -> From hardware innovator to a full-fledged
diversified financial services company
Source:Technode

18. 78M MAU, $26M
15Q1 revenue, incl.
$13M paid
membership
A Typical China Innovation Story -> Diversification-driven
MOMO: initially a hook-up app, now lifestyle, youth-oriented
social network with people nearby/location-based/communities…
Tribute: Nicolas Du Cray, Iris Capital

19. Tribute: Nicolas Du Cray, Iris Capital
Everybody is a delivery man, on-demand “go fetch
me stuff” service
Chinese Entrepreneurs “Ren Ren Kuai Di 人人快递”
inventing “Uber for Food Delivery”

20. “Xiaomi is a software and ecommerce company that just happens to
manufacture hardware” Hugo Barra, VP International, Xiaomi

21. Xiaomi innovative model
-> Creating Buzz and Going Online (almost) Exclusively

22. Xiaomi innovative model
-> Commoditizing What Can Be
Source:
Benjamin Joffe,
Partner, HAX
Hardware Accelerator

23. Xiaomi innovative model
-> One-Stop Shop, selling all kinds of devices, accessories

24. Xiaomi innovative model
-> Becoming Content Publisher, Selling e-books etc.

25. Xiaomi innovative model
-> Hooked up customers also buying mobile phone skins!

26. Innovation through M&A and Vertical Integration
-> LeTV (online Streaming) Becoming 2nd Largest Shareholder of
Mobile Phone OEM CoolPad ($350Mil investment)

27. Drone Developer DJI Pockets US$75M from Accel Partners
and sets investment vehicle to develop its ecosystem

28. Twitter | @brubrushanghai
WeChat| brubrushanghai
Email | bensaid@fastmail.fm