Forbes China publishes at the beginning of every year a ranking of China’s top venture capitalists. Annabelle Yu Long, managing partner at Bertelsmann Asia Investments (BAI), the China-based corporate venturing arm for Germany-headquartered media group Bertelsmann, was named the sixth most successful investor this year.
Chairman and chief executive of Bertelsmann Thomas Rabe said: “Investments in young digital companies with innovative business models play an important role in the implementation of our strategy. Through these investments, we ensure the transfer of knowledge both about digital trends that support our transformation and about promising markets. Our investment fund Bertelsmann Asia Investments, in particular, is very successful.”
That this was Bertelsmann’s most active region for corporate venturing and highlighted in its full results speaks eloquently to Long’s performance and skills, who has also been supportive of those eventual role models for youth.
As this year’s GCV Rising Star Iris Cong, a senior investment manager, aptly said: “We want to become the best unicorn hunter in Asia.” BAI is an expert at catching unicorns at an early stage, according to a ranking by professional services firm Deloitte and investment advisory services firm China Venture in 2017. Ever since BAI was launched in 2008 by Long, it has had 10 initial public offerings (IPOs) in 10 years, having contributed to more than 10% to the group’s profit in 2017.
Bertelsmann said: “Since its establishment, Bertelsmann’s Chinese fund has supported multiple startups in successfully going public – four of them in 2017 alone. In more than 10 other cases, BAI holdings were sold directly to other companies, again generating significant profits for BAI. The Bertelsmann Investments division, of which BAI is a part, generated total EBIT of €141m in 2017, after €35m in 2016, and thus made a significant contribution to Bertelsmann’s Group net income.”
Germany-based Bertelsmann is one of the world’s oldest and largest media, services and education groups with more than 119,000 employees and €17.2bn ($19.1bn) in revenue in the 2017 financial year. Since 2017, Bertelsmann, which traces its book publishing back more than 180 years, has bedded down its focus on education as its third main business line alongside media and services.
For example, China-based English language learning platform Jiliguala, which secured an undisclosed amount of funding from BAI in November 2018, whose intellectual property was acquired by Canada-based book publisher Penguin Random House, helped sell more than 10,000 children’s books in three months.
In addition, China-based parenting and pre-school education advice provider Xiaobu, which received a pre-series A funding of undisclosed amount from BAI in March 2018, helped sell 15,000 Penguin Random books in nearly four months.
Cong explained this collaboration in detail for her Rising Stars profile earlier this year: “Bertelsmann was significantly expanding its stake in Penguin Random House, the world’s leading trade publishing group in 2017. Moreover, Penguin Random House is one of the biggest children’s book publishers in the world.
“When BAI explores opportunities in the education sector, I find a lot of synergies between Bertelsmann business and startups. These top-tier online players could be perfect distribution channels for Penguin Random House children’s books in China.”
Bertelsmann Investments has four funds – Bertelsmann Asia Investments (BAI), Bertelsmann Brazil Investments (BBI), Bertelsmann India Investments (BII) and Bertelsmann Digital Media Investments (BDMI), Bertelsmann Investments – through which Bertelsmann has more than 160 shareholdings around the world.
And while there might be four growth regions, there is clearly one that is dominant – China. With more than 130 investments over the past decade since Long founded BAI in 2008, the group now manages more than $3bn
Long, who also sits on the board of listed companies Tapestry, BitAuto, CDEL and iClick, as well as private companies Meili, Bigo Live, 352air and Jike, has built the team from the ground up.
She is also CEO of the Bertelsmann China corporate centre and on the company’s group management committee (GMC), which advises the executive board on corporate strategy and development.
Long reports directly to Rabe who effectively runs the company through the GMC. She said last year: “Bertelsmann Asia Investments is one of the best-known and most successful funds in the Chinese investment scene at this point. We continue to put into practice what we set out to do 10 years ago. And we are pleased that, with such a small team, we are able to make a sizeable contribution to a global media corporation like Bertelsmann.
“There is probably no other company at Bertelsmann that generates such a high profit per capita as the six-member BAI team – and we’re proud of that, of course. Every year we have the same expectation and aspiration: to be better than the year before. So far, we have always managed that – and I’m very confident that this will continue to be the case since we invest in growth regions and growth sectors. We are surfing a very positive, sustained trend, so it’s not an unrealistic expectation.”
BAI’s success did not happen overnight but with time and perseverance. BAI made its first investment in China-based online education platform operator China Distance Education Holdings (CDEL) in April 2008. Today, BAI has more than 85 portfolio companies, and its most recent investments included leading financing rounds for Sufficient Goods in March, 91duobaoyu in February and Tapai in January.
But while Long has made a success of BAI, the groundwork for Long’s success was laid beforehand. After her MBA from the Stanford Graduate School of Business and a BSEE from the University of Electronic Science and Technology in China, Long joined Bertelsmann in New York in 2005 and worked as a principal at Bertelsmann Digital Media Investments before founding BAI.
Before joining Bertelsmann, Long started her career as a TV anchor and became a producer with a variety of highly rated, award-winning television and radio programs in China, the company said.
And her results have been recognised outside of the company. Long was named a Young Global Leader (YGL) by World Economic Forum. She is the first person to join YGL’s Advisory Council from China and also serves as a member of its Global Agenda Council on the Future of Media, Entertainment and Information. Long was named Fortune China’s 25 Most Powerful Women in Business of 2017 and 2016 ChinaVenture – Financial Times China Top Investor.
