In just over a month, Youzhong gained the favor and action of venture capital institutions. In early December, Lightspeed Venture Partners US, which has already invested in many Chinese Internet companies, and IDG Capital jointly injected 11 million US dollars into Youzhong.
"This is a new beginning," said Chen Xiao with great confidence. When he left MSN to team up with former Taobao Vice President Sun Tongyu to form an entrepreneurial team to develop Youzhong.com, he was deeply confident in the prospects of Youzhong. They spent two years developing it, releasing a testing version in early September 2010, and officially launched it to the public on November 1st.
Chen Xiao's confidence comes from Youzhong's unique positioning and business model. He stated: "Youzhong.com integrates the characteristics of SNS and e-commerce, being a business SNS that first combines knowledge, lifestyle, and e-commerce. It advocates the finest and most refined online lifestyle, focusing on serving users who pursue fashion and quality of life." In his view, this group represents the most valuable segment of Internet users. In the past, the Internet's usual approach was to cover all user groups, neglecting the real needs of these users. Therefore, restoring the familiar qualities, environment, emotions, experiences, and needs of users and creating a matching online living environment for them became Youzhong's greatest opportunity.
Currently, China's Internet industry is referred to by many as the post-Internet era. Although the industry never lacks entrepreneurs, the passion for innovation is gradually waning. This directly leads to a weakening of the Internet's attraction to venture capital. From the spread of SNS to the "hundred group battle" of group-buying websites, and now the prevailing "micro-war" of Weibo, the prosperity and excitement of the Internet cannot hide the concern about the lack of innovation in China's Internet.
The Lightspeed investment manager stated: "Lightspeed values the entrepreneurial team and the quality of the entrepreneur in its investments. We are interested in companies that own a certain technology or innovate in their business model." He also expressed that Lightspeed not only sees potential in Youzhong's target audience and the use of rich media to build a website that presents a three-dimensional and vivid experience for users, but also highly appreciates the entrepreneurial partnership of Chen Xiao and Sun Tongyu, as well as the entire Youzhong entrepreneurial team.
IDG Capital, which participated in this round of investment in Youzhong, has been involved in countless investments in Chinese Internet companies over the past decade. They have witnessed many Chinese Internet companies grow from small startups to influential enterprises. Companies like Sohu, Tencent, Baidu, Ctrip, Soufun, and Dangdang, which have listed on the US stock market, all bear the shadow of IDG. IDG has created many important enterprises that have shaped the landscape of China's Internet. The shift of IDG's focus to Youzhong has drawn much attention from insiders in the Internet industry.
"When we make investments, we pay attention to the sustainability and growth potential of a company. It's not just about how big the business is, but more importantly, whether it can create customer value," said a related person from IDG.
Creating value for the most valuable segment of users is the driving force behind Youzhong's birth, existence, and development. From actively creating user thresholds to restoring and simulating the living scenarios of users, Youzhong aims to create Internet value that meets their needs. Undoubtedly, the injection of 11 million US dollars provides financial momentum for Youzhong's future development. However, Chen Xiao frankly admitted: "Funds can influence a company’s operation, but this does not mean the more funds, the safer the company. What truly determines a company's fate is the changes it can bring. Only real and valuable changes can support a company's development; distance reveals the strength of a horse, and time reveals the heart of a person."
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