Could Beijing become the next Silicon Valley? Despite red tape that makes doing business in China a real hassle for some entrepreneurs, it would be almost impossible to argue that China isn't becoming one of the next hot markets for start-ups. Last year, 138 venture-backed companies in China went public, raising about $21 billion, according to VentureSource. Impressive, no? Here's a look at seven start-ups every investor, entrepreneur, and small business should know about.
A service similar to Tumblr, Diandian (which means "bit by bit" in Chinese) was founded by Jack Xu, formerly an engineer at Renren. As of June 2011, the number of Diandian registered users had surged to one million, which means Diandian gained 11 users every minute from April to June, according to Asian tech blog TechNode.com. "It took Twitter more than a year to have the same magnitude base of users," the site noted, "and 10 months for Facebook….Diandian grows as five times as the growth rate of Facebook."
Americans aren't the only ones caught up in a group-buying frenzy. Lashou Group, China's biggest group-buying site, is gaining steam. According to SEC reports (the company has filed for an IPO) Lashou grew from about 53,000 users in March 2010 to approximately 16.8 million as of September 30, 2011. And, since launching just two years ago, approximately 6.8 million paying users had purchased over 43.3 million vouchers for services and product. "Given that China's Internet users reached 425 million as of the end of 2010, which represented 32.4 percent of the Chinese population," the filing noted, "…we believe significant market opportunities exist for our future growth."
If Lashou is China's Groupon, Meituan is China's LivingSocial: it's group buying site founded by serial entrepreneur Wang Xing, who also founded the Facebook-like site RenRen.com. According to a recent press statement, Meituan.com's monthly growth rate has, without interruption, exceeded 20 percent since launch, with revenues nearing $40 million in November.
Douban.com may be the biggest site you've never heard. Launched in 2005, it's essentially a social network for people to discuss movies, music, and TV. With more than 7,000 musicians and about 5 million registered users, it ranks as the 109th most popular site in the world. We do discuss a lot of Chinese clones or 'mini-innovators,'" noted one blogger at TechRice.com, a Chinese technology blog. "Here, we're happy to highlight Douban as a true example of homegrown innovation."
Founded in August 2011, Duducars may be new to the start-up scene, but its ambitions are high. The company is China's first car-sharing service; it's essentially a network of cars for people who need a vehicle anytime and anywhere. "This Zipcar-like service, with its combination of apps and RFID cards to unlock rentable vehicles (owned by the company), looks to be on-course for funding and growth in 2012," noted TechInAsia.com.
Unitedstyles, which launched in January 2011 and is based in Beijing, is a fairly disruptive idea: it allows users to create custom woman's apparel by sketching it out, adjusting, and sharing the design with Facebook friends. "When asked who their closest market competitor was," TechCrunch noted, company founder Marc van der Chijs "held that UnitedStyles was "totally new"; "There isn't a lot of innovation in business models in fashion."
Launched in October of last year at TechCrunch Disrupt in Beijing, 8 Securities is the first online investing tool in Hong Kong. It combines social elements (like tracking your favorite traders) with a trading portal where you can select markets, trading tools, news, and research. "Change does not come until the conventional way of doing things is disrupted for the better… and that is our mission," the company notes.