(Bloomberg) -- Former Baidu Inc. Chief Operating Officer Qi Lu has been named chief executive officer of Y Combinator China, marking the American startup incubator’s first fully-fledged international effort.
Y Combinator, which has seeded companies including Airbnb Inc., Stripe Inc., Reddit and Dropbox Inc., will start its program in China as soon as next summer, according to an interview with the president of Y Combinator, Sam Altman. In the U.S., the accelerator selects two batches of companies a year that receive financing, advice and connections in exchange for a small percentage of equity. Lu will lead the program, which will be called YC China and will be similar to the U.S. approach, though there may be tweaks to fit the Chinese market, Altman said.
"Qi Lu is an incredible technologist and very mission aligned with us,” said Altman. “He will be able to take what works with YC in the U.S. and adapt it for China. My best guess is that a significant portion of tech companies in the next decade will be in China or the U.S. Adding Chinese founders to the community will be exciting."
Altman said he first spoke to Qi Lu about running the initiative before he joined Baidu. Microsoft Corp. veteran Lu was hired by Baidu in 2017 to accelerate the Chinese search giant’s efforts into everything from autonomous cars to digital assistants. He surprised investors in May when he announced that he was stepping down because he could no longer work full-time in China for personal reasons. His departure triggered a plummet in Baidu’s share price. At Y Combinator, Lu will split his time between China and the U.S.
Y Combinator’s deeper forays into China come as an increasing number of American investors back Chinese startups, despite escalating tensions between the world’s two largest economies. In addition to Sequoia Capital and Lightspeed Venture Partners that have an established track record of investing in Chinese startups, Bloomberg earlier reported that Peter Thiel is considering strategies to invest in the country.
The growing interest is a result of the rapid growth in Chinese technology companies. Five years ago, the U.S. had nine of the world’s 20 most valuable internet companies and China had just two; today, while there are 11 American firms on that list, the number from China has surged to nine, according to Mary Meeker, a partner of venture firm Kleiner Perkins Caufield & Byers, in her May “Internet Trends Report 2018”.
Earlier this year Y Combinator held its first official event in China at Tsinghua University in Beijing to recruit more startups from China to apply to its program in Silicon Valley. Lu will continue to find Chinese startups for the U.S.-based program later this year; then after that, Lu will focus on building the program in China, Altman said. Currently, of the more than 1,700 companies Y Combinator counts as alumni of its program, less than 30 are based in China, according to Altman.
Willett Advisors, the investment arm for the personal and philanthropic assets of Michael Bloomberg, the founder and majority owner of Bloomberg LP, invests in Y Combinator startups.
To contact the reporter on this story: Selina Wang in San Francisco at swang533@bloomberg.net
To contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, Peter Elstrom, Molly Schuetz
©2018 Bloomberg L.P.
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