Disruptive US tech gets an edge with China's new strategic investors. By Forbes
China tech is going global. You don’t have to look far to see the signs. As one of the bigger indicators, China’s tech titans are investing heavily in U.S. tech startups, particularly those with a disruptive edge.
Take SoFi in San Francisco, which has funding with roots from China. Joe Chen, founder of Chinese Internet company Renren is SoFi’s earliest investor and one of the largest backers of the marketplace lender for young professionals.
Chen and SoFi CEO Mike Cagney first connected at a Stanford gathering in 2011 through an acquaintance, and Chen soon had invested $4 million in SoFi, advising Cagney meanwhile that he needed to be more aggressive with an expansion plan for his innovative student loan service.
More resources! A year later, in 2012, SoFi raised a pivotal $81 million, with Chen on board and – thanks to Chen’s connections and his enthusiasm for the disruptive lending service — David Chao of Sand Hill Road venture firm DCM. Fast forward, and SoFi drew $235 million financing early this February, bringing its total capital raised to $399 million with such big names as Peter Thiel participating.
Since its start in 2011 thanks in part to Chen’s investment, SoFi has loaned $1.75 billion and has branched out beyond student loans to personal loans and mortgage loans and refinancing. Cagney says SoFi has only had two defaults on loans, both due to the borrower’s death. See earlier post on Chen’s investments.
A second example in this China outbound investment trend is EyeVerify, a biometric technology startup in Kansas City. EyeVerify raised $6 million in a Series A equity funding in August 2014, with another Chinese tech titan – mobile security company Qihoo 360 as a strategic investor. Joining Qihoo 360 were Sprint and Wells Fargo
EyeVerify’s CEO Toby Rush says he got an introduction to Qihoo 360 through China business development pro David Sullivan and his team at Alliance Development Group. Rush credits Sullivan for helping him to get comfortable with an investor from China. “It’s a different world, with different expectations,” says Rush. Another hesitation was how the deal with Qihoo could impact “where we go in China in the future” with potential other partners.
But there was no question about having NYSE-listed Qihoo 360 as a door opener to additional contracts inside the firm and extending its reach to mobile carriers. Mike Liao, recently named director of strategic initiatives at Qihoo 360 in the Valley — another indication of China tech’s outreach – is on the board of EyeVerify.
Having secured the financing, Rush is now focused on making his patented biometric technology mainstream, used in financial services, healthcare, mobile security and government.
The founders of EyeVerify and SoFi will be on stage at Silicon Dragon SF 2015 to speak about how their startups are scaling up.
Read the full article at forbes.com