The top 25: Ethan Xie, Alibaba
China-based online retailer Alibaba aims to be a company that lasts at least a 102 years, so that it will have operated across three centuries, and many of the company’s current plans hinge on the abilities of Ethan Xie, who joined Alibaba in January 2013 and is now managing partner of its corporate venturing unit.
Xie, a former speaker at the GCV Academy in Shanghai, China, runs Alibaba Innovation Ventures, the investment arm of Alibaba Group that provides venture and growth-stage funding to technology companies.
He said his unit was separate from the Alibaba Pictures corporate venturing unit, which announced a $300m fund last summer ahead of a bigger $1.5bn initiative as part of Alibaba Digital Media & Entertainment Group to oversee all Alibaba’s entertainment subsidiaries.
And with growth at payment platform Alipay, which is owned mainly by Alibaba’s founders, Jack Ma and Simon Xie, rather than Alibaba, and financial unit Ant Financial Services Group, which Alibaba spun off ahead of listing but which retains a profit share and convertible equity option, the group has strong potential inside and outside China.
Alibaba and Ant Financial co-invested in the $4.5bn equity round for ride-hailing service Didi Chuxing, which closed in July last year and this month raised $5.5bn at a $50bn valuation. This would make Didi Chuxing the second most valuable private company after Uber.
Overall, therefore, Alibaba was the top corporate investor from the consumer sector, accounting for the highest number of disclosed rounds, according to GCV Analytics. Alibaba participated in five of the top 10 deals over the previous year, including Ele.me, an online platform for ordering food deliveries from restaurants and takeaways, chauffeured lift-ordering service UCar and Yiguo as well as Didi Chuxing.
Alibaba also took part in a $568m round for UCar, and invested $1.25bn in Ele.me. It invested $900m while its financial services affiliate Ant Financial supplied $350m, the two taking an aggregate stake reported to be 27.7%.
Alibaba first began investing heavily in 2013 when Xie joined. Joe Tsai, executive vice-chairman of Alibaba, summed up the vision when he said in 2013: “Alibaba is run by entrepreneurs, and we believe in supporting entrepreneurs with great vision and a strong sense of mission for their companies.”
At that time, Alibaba was launching an investment arm in the US to seek startups working in the e-commerce and emerging technologies spaces. It has since scaled up in the US, including leading the $793.5m series C round for augmented reality company Magic Leap in February last year.
Leading such a high-profile round affirms Alibaba’s status as one of China’s, and the world’s, corporate titans. Rony Abovitz, founder, president and CEO of Magic Leap, said at the time: “We are excited to welcome Alibaba as a strategic partner to help introduce Magic Leap’s breakthrough products to the over 400 million people on Alibaba’s platforms.”
As part of the round, Tsai joined Magic Leap’s board. Tsai was part of Alibaba’s founding team in 1999, along with Simon Xie and Ma, having previously been a private equity investor at Sweden-listed Investor AB. Alibaba’s senior team is experienced in venture investing, with CEO Daniel Zhang leading its strategic investments in Haier, Intime Retail, which he chairs, and Singapore Post. Ma also sits on the board of SoftBank, a major shareholder after its earlier corporate venturing deal to back Alibaba’s growth. US-listed Yahoo also owns a substantial corporate venturing stake in Alibaba.
They are, therefore, well qualified to judge a good investor and rate Ethan Xie highly, as do his peers. When Xie ran a workshop at the GCV Academy in Shanghai, he scored 4.5 out of 5 for the program presentation and was described as having “very good local knowledge and a well-respected brand in CVC”, according to Andrew Gaule, who heads the academy.
Alibaba’s strategic investments fall broadly into three groups – e-commerce, media and online services. E-commerce deals have ranged from department store owner InTime to flash sales company Mei.com and logistics service YTO Express, as well as Lazada and Snapdeal.
The second group consists of both traditional media companies like South China Morning Post, Singapore Post and Shanghai Media, and new technology or online offerings like video-streaming platform Youku, instant messaging companies Sina Weibo and Snapchat, and Magic Leap.
The third group, in which Ele.me and UCar fall, tends to include companies that provide online-to-offline services such as food, transport, mapping (AutoNavi) or domestic services (58 Daojia). These can be connected to Alibaba’s e-commerce services, broadening them at the same time as Ant Financial can extend its online payment empire into new realms.
Based on its activity in the past 12 months, Alibaba seems to have no plans to reduce its corporate venturing efforts. If such dealmaking continues, Ethan Xie, a former science graduate from Tongji University and a post-grad from University of Sydney, could feel he has already packed a 100-year history into his short time at Alibaba.
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