Chinese Angel Investors Are Showing Great Interest In Indian Startups

Famous Chinese entrepreneurs who have built some of the biggest internet companies in their home country are looking to invest in Indian startups that are still at incubation stage, as per media reports.

Liang Jie, co-founder of Alibaba -owned UCWeb browser, and Tang Yang, the founder of microfinance startup CashBUS, have already injected seed capital in three startups being incubated at New Delhi-based Venture Gurukool. 

They have thus far backed microcredit provider, Olly, social engagement platform, Cuddll, and mobile-first marketplace, Coutloot through Venture Gurukool, which has been conducting a series of roadshows across the Middle Kingdom over the past few months.

In all, 10-15 Chinese entrepreneurs are scouting for early-stage investment opportunities across segments, including education technology, financial technology, social, content, and online commerce. 

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Chinese entrepreneurs “are coming on board as Super Angels, and the investment premise is the same — to expand their portfolio outside China, they want to come in early and back these ventures before valuations heat up,” said Mahendra Swarup, founder and chief mentor at Venture Gurukool.

The development comes as Chinese institutional capital has invested in huge amounts in India. Nearly half-a-dozen Chinese venture capital firms are looking to buy stakes in Indian startups across sectors, reported recently. This is in addition to huge investments by the likes of late-stage strategic investors Alibaba Group, Tencent and Meituan Dianping in mature domestic companies such as Paytm, BigBasket, and Zomato.  

Experts think this is a process of natural evolution where venture capital activity has paved way for angel investments in India.

Alibaba acquired UCWeb in 2014 at an estimated enterprise value of about $3.8 billion, making it the largest internet deal in China at the time. Jie currently serves as the company’s technology chief. There is a tacit understanding between a few high-profile Chinese entrepreneurs and Venture Gurukool that could see Friends of Alibaba, an informal group of founders of companies acquired by Alibaba, back Indian ventures as they scale. 

Friends of Alibaba is headed by Yu Yongfu, the chief executive of UCWeb who recently stepped down as president of Alibaba’s digital entertainment business. He has been tasked with leading the e-commerce giant’s initiative to invest in and incubate startups outside China, as per media reports.

The so-called club bears resemblance to the PayPal Mafia, members of which, post their exit from the fintech giant, went on to found or invest in some of the biggest technology-focused startup companies globally. It has the blessings of Alibaba.

Venture Gurukool has also signed what is being described as a ‘strategic cooperation agreement’ with Innoway.

“It’s a cross-border partnership that will see investors from the Chinese Mainland back Chinese ventures that looking to make their presence felt in India, and also Indian ventures looking to make a mark in China,”

Swarup said.

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