Huang Xiaoming, Li Bingbing among biggest celeb investors
BEIJING: Actors Huang Xiaoming and Li Bingbing are among the biggest celebrity investors in China.
As co-founders, each of them owns a 30 per cent stake in Internet venture capital firm Star VC. Also owing a 30 per cent stake is the other co-founder, singer-actor Ren Quan.
It’s a trend all across China, with a slew of Internet venture companies riding on the coattails of celebrities to drive the value of public-listed companies.
Last year, He Jiong set off a wave when he joined Alibaba Music. Later, Chinese rock legend Zheng Jun would join Taihe Rye Music.
However, the trend of leveraging stellar power to drive sales can sometimes backfire.
When it was announced that Li Xiang would become chair
At the beginning we discussed splitting it three ways. We decided it would be better if all three of us had to agree on every decision. Otherwise why do it at all?
of Qihoo 360, announcer Liu Yuxi would join LeSports, and Hong Tao would be the executive producer of karaoke app Changba, public response was lukewarm.
It’s probably a case of celeb fatigue.
On the Star VC venture, Ren Quan said: “At the beginning we discussed splitting it three ways. We decided it would be better if all three of us had to agree on every decision. Otherwise why do it at all?”
Handu, an internet fashion brand, was the first company Star VC invested in. It has been releasing 30,000 new products a year, more than global industry leader Zara.
In 2015, revenues reached US$181 million, with a profit of US$4.7 million.
Sources indicate that Star VC’s investments in billion-dollar tech unicorns like Qihoo 360 and Xiaokaxiu were mostly small coinvestments in the middle stages of funding.
In August 2014 Star VC made only a small co-investment in Miaopai’s US$50 million round C financing lead by Kleiner, Perkins, Caufield and Byers. By November 2015, Miaopai was a unicorn valued at US$1 billion.
According to CEC Capital founder Wang Ran, film and TV companies buying shell companies from their stars is a “brilliant act of substitution.”
Both the artist and the director’s investment are transformed into profits.
According to Wang Ran, this additional income can almost all be turned into profit, which is then multiplied several times by the capital market’s price/ earnings ratio before being sold to another investor or an A-stock company.
He added: “Through this process, the artist sells all or part of their shares. Having finished raising the shares’ value, the artist takes an early return on investment.”
Ren Quan, singer-actor