Issue 15 | December 11, 2017

Xiaomi Reportedly Eyes 2018 IPO
The Information reported that Xiaomi is talking to bankers about an initial public offering as early as the second half of next year. Xiaomi is currently the world’s fifth-largest smartphone maker by shipment and one of the world’s most valuable private firms.

Watch GGV Managing Partner Hans Tung talk about why Xiaomi’s ecosystem-based model gives it a unique advantage over its potential competitors on CNBC.

Hans Tung is an early investor and former board member of Xiaomi.

Tencent and Spotify Buy Stakes in Each Other
Tencent and Spotify announced that they have made an investment in each other’s music business. One of the largest digital music distributors in China, Tencent provides services including streaming, live broadcasts, and karaoke through three apps: QQ Music, KuGou, and Kuwo.

Spotify has over 140 million users (including over 60 million subscribers), while Tencent’s music apps have a combined 600 million monthly active users. Both Spotify and Tencent Music Entertainment are reportedly preparing to go public.

The deal is part of Tencent’s growing overseas splurge, including a recent take in Snap. Read our roundup of Tencent’s investments outside of China and our analysis of Tencent’s stake in Snap here.

Hellobike Raises $350 Million in Series D1 from Ant Financial and Others
Hellobike, one of the top three bike-sharing companies in China and a GGV portfolio company, raised $350 million from Alibaba’s financial services affiliate Ant Financial, electric vehicle developer WM Motor, Chengwei Capital, and bike manufacturer Fujita, among others. Ant Financial said it seeks to reduce the need for deposits in the bike-sharing industry through its credit score service.

Founded a year ago, Hellobike was a relatively late entrant to the bike-sharing market, but has been able to achieve remarkable growth by entering 3rd- and 4th-tier Chinese cities first. It currently has 80 million registered users.

In October, Hellobike merged with Youon Bike, which supports public bike-sharing programs for many municipal governments in China. Yang Lei, the 28-year-old CEO of Hellobike, became the CEO of the newly-merged entity.

GGV Capital, also participating in this round, is the largest VC shareholder of Hellobike. Managing Partner Jixun Foo is a board member of the company.

Memorable Quotes from Fortune Global Forum
A slew of global business leaders gathered last week at the Fortune Global Forum in Guangzhou. Here are some memorable quotes from the three-day event:

Tim Cook, CEO of Appleon Apple’s decision to comply with Beijing’s regulations:

“Your choice is—do you participate, or do you stay on the sidelines and yell how things should be? My view is that you show up and you participate because nothing ever changes from sidelines.”

Jack Ma, chairman of Alibaba, on how foreign companies can succeed in China:

“Send great entrepreneurs to lead your business in China, not professional managers. Those people make the boss happy, they do not make the customers happy.”

Zhang Siding, co-founder of Ofoon the impact of bike-sharing on Chinese cities:

“We ask ourselves: Are people dumping our bicycles because they do not meet their needs, or do they naturally have this habit of destruction?”

Robert Simonds, STX Entertainment CEO, on the Chinese audience:

“It’s the fastest changing audience base anywhere in the world. The Chinese consumer—they learn, they adapt, they move on at a pace that I don’t think anyone is doing.”

David Daokui Li, Tsinghua economist,  on China’s GDP growth:

“In China, we are busy building roads, factories, buildings—that’s GDP growth. GDP growth is 3% in the U.S., but you don’t see so many new buildings being built.”

Hans Tung, Managing Partner of GGV Capital, on whether Tencent and Alibaba are crowding out VC investments:

“There’s definitely a way for VCs to exist with these strategic investors. A lot of us are investing earlier and earlier. When the right time comes, Alibaba or Tencent ends up investing in that company to help it grow faster.”

Huawei Plans to Launch 5G Phones by 2019
Richard Yu, CEO of Huawei’s consumer group, announced last week that the company plans to launch chips and smartphones in the second half of 2019 that support 5G technology. The announcement took place at the 4th annual World Internet Conference (WIC), a summit organized by the Cyberspace Administration in the southern Chinese town of Wuzhen.

The rollout of 5G will boost Internet connectivity and reduce data cost significantly. With 5G, smartphones will be able to download a 6GB movie in 2 seconds.

Beijing has signaled that it intends to be at the forefront of the next generation of mobile communications. At the end of November, the National Development and Reform Commission said the country’s 5G network will start to take shape with pilots in at least five cities.