The following is my latest post on Digital East Asia.
The recent Google Inc. (NASDAQ: GOOG) – China spat has made Chinese web news much less interesting to read lately, as there is a flood of officially-toned articles criticizing Google and the US government (after Secretary of State Hillary Clinton’s Internet Freedom Address last week). And honestly, many Chinese netizens are perhaps fearful of tougher crackdowns from the government as a show of strength. It is therefore great news, then, to hear Douban raising close to $10MM in its Series B round of VC funding (via Chinabyte article, link in Chinese).
The Series B round of funding is led byTrustbridge Partners, founded by formerShanda Interactive Entertainment Ltd.((ADR) NASDAQ: SNDA) CFO Li Shujun in 2006, and Ceyuan Ventures, which invested $2MM in the Series A round in 2006.
Founded in 2005, Douban is China’s leading SNS when it comes to books, films and music – organized around such interests, it’s distinctively different from the other Chinese social networks (Renren – the college kids, Kaixin – casual games etc.). The crowd that Douban attracts may be smaller in size, but it is much more skewed towards the highly educated (and perhaps elitist) rising middle class, commonly termed “xiaozi” (literally meaning petty bourgeoisie). And since most topics are centered on the various arts, discussions are generally less sensitive, though Douban had to do some heavy self-censoring in the summer of 2009 to comply with the Chinese government’s regulations.
The site seems to have been picking up significantly over the half year, with over 33MM registered IDs now, versus only 10MM in September 2009. This could partly be due to a partnership withTencent Holdings Ltd.’s (HKG: 0700) popular IM platform QQ, where Douban was listed in the books section. However, like most SNSes, Douban is still on the path to profitability. The site currently generates income from book recommendations (linking to online retailers such as Dangdang and Amazon Joyo), ticket booking services and brand advertising (Ford, Converse, Ray-ban etc., full list of brands here).