Baidu Ventures, an investment arm of the Chinese internet tech giant, just announced its new chief executive officer is Gao Xue, who was the former managing director of Xiaomi technology strategic investment department, 36kr reported.
The former chief Liu Wei will be in charge of BioMap, Baidu's new life sciences division. Baidu co-founder and CEO Robin Li will act as its chairperson.
Entering Muddied Investment Waters
It is known that the internet giant is keen to acquire other internet and tech companies, as evidenced by the recent controversial acquisition of YY.com, the Chinese live-streaming arm of Nasdaq-listed JOYY.
Two weeks ago, Baidu proposed the acquisition of YY.com for $3.6 billion in cash, in an attempt to expand its domestic live-streaming businesses. This would become the record high investment Baidu has made to date.
Short-selling company Muddy Waters, however, recently said in its 71-page report "nothing could prepare us for the surreality of Baidu announcing its intention to buy YY Live from JOYY, which happened just as we were preparing to reveal that our year-long investigation shows YY Live is about 90% fraudulent."
Baidu hasn't responded to Muddy Waters' report. Local media predicted Baidu would still complete the deal as owning live-streaming business market share is seen as essential to compete against rivals including Tencent with Huya and Douyu live-streaming platforms, Alibaba's Taobao live-streaming and ByteDance's TikTok.
Repeating Past Failures?
Baidu splashed down $1.9 billion in 2013 on buying the Hong Kong-listed internet tech company 91 Wireless. It was the most expensive acquisition in the history of China's of internet industry. The company's apps 91 Assistant and HiMarket racked up nearly 10 billion app downloads at the time. It was referred as a top third-party app store between 2011 and 2012, according to iResearch.
The merger, however, turned out to be a disappointment as Baidu didn't expand its market share based on the former success of 91 Wireless. Tang Hesong, Baidu's former vice-president of the strategic investment department, resigned his position in 2014, as a gesture to "pay responsibility for the failed acquisition deal." Baidu had to divest in the core business of 91 Wireless at the time and, as of this February, 91 Wireless products were no longer available to download in any app stores.
Nearly 19 internet projects or products invested in by Baidu returned similar results, while eight of those were eventually acquired by Baidu, according to technology data and service provider itjuzi.com.
"As a tech giant, it's certainly not difficult to make the acquisition deal," said Zhang Yi, the vice president of Guangdong Internet Society, "What's more challenging in Baidu's investment operation is to integrate resources structurally to complementary advantages."
Focusing On AI
Beijing-headquartered Baidu Ventures was established in Sept. 2016, and claimed it would become "the world-class venture capital at the era of artificial intelligence."
Led by the former chief executive officer Liu since 2017, it has invested in nearly 150 AI-related companies. Business sectors cover from reinforcement learning to generative adversarial networks and from single-cell sequencing to body-embedded sensors and unmanned automated warehouses.
It has also invested in smart home safety product manufacturer YunDing Network Technology, machine learning pioneer firm Lightelligence, AI technology firm RealAI and other biomedical, IoT and smart manufacturing companies. Baidu Ventures reportedly has $500 million in funds.
The newly appointed CEO Gao Xue graduated as Doctor of Materials Science from Beijing University of Aeronautics and Astronautics. During his tenure in Xiaomi, he invested in internet companies including ByteDance, Dainping, BiliBili and Himalaya.
Analysts said, after the new appointment, Baidu Ventures will likely continue to target early-stage investments: Seed stage; Series A and Series B, in AI projects and companies, primarily in China and the U.S.