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In 2013, that same Russian investor from Dan’s story came out of nowhere to make one of the greatest venture bets in the history of China. Why did #Bytedance choose an outsider to lead their Series B round? Here’s the story: https://twitter.com/drose007/status/1265114361900589056
Bytedance’s earliest funding was led by founder Zhang Yiming’s friend Joan Wang (SIG Asia). Joan had worked with Yiming for years and knew exactly how capable he was but other VCs were absolutely unimpressed. Joan introduced Yiming to 20+ of her contacts. No one was optimistic.
Yiming was a baby-faced, softly spoken, engineering geek. The opposite of Jack Ma’s brash and confident gladiatorial entrepreneur style favored by Chinese investors. One left after just 15 minutes and complained later to Joan: "It's not my investment style to look at this kid."
Joan later recalled “Everyone thought the technology was great, but how much does tech have to do with success?” Most investors felt news aggregation (Bytedance’s original positioning) was a mature red ocean market already divided up by the big players & users extensively served
None of the investors foresaw how powerful machine learning information distribution could be and no one really grasped the disruptive potential of the model that Yiming had conceived.
The list of VCs who turned down Bytedance’s first few fundraising rounds, missing what would have likely ended up being the highest return deal of their careers, reads like a who’s who of China venture capital.
It was a Russian who ended up beating them all.
It was a Russian who ended up beating them all.
The breakthrough came when Joan stumbled across a news article ( https://techcrunch.com/2012/12/05/prismatic/) announcing funding of US startup Prismatic, she was elated. The positioning of Bytedance in China was close to that of Prismatic in the US. Finally, an investor who should understand them!
She immediately reached out to Yuri Milner who after checking them agreed Bytedance was well run and similar to Prismatic. Yuri invested $10 million at a $60 million valuation.
7 years later Bytedance is worth $100 billion.
7 years later Bytedance is worth $100 billion.
