Wednesday, June 23, 2010

DCM invests $4M in Silicon Dragon-like startup PapayaMobile

Not too many 28-year-old female entrepreneurs manage to land $4 million in financing from savvy DCM for their first startup in China. But then again, Si Shen is far from average. At age 16, she got into the prestigious Tsinghua University in Beijing, soon graduated with a degree in computer science, then moved on to Stanford and picked up two Master’s degrees in three years’ time—all before starting her career as a product manager for China, Japan and Korea at Google.
Transferring from Silicon Valley to Beijing in 2007, she spent a year building the team for Google’s mobile business to 40 staffers. That grass-roots experience only served to reinforce her dream of starting her own business.
After leaving Google in 2008, she and former classmate Wenjie Qian raised some angel funding from friends and cranked up PapayaMobile to be what Shen describes as “the mobile Facebook on Android.” By September 2009 and after a few bumps in switching from the Java platform to focus instead on the open Android platform, she says the startup was profitable.
This is the classic stuff of successful Chinese entrepreneurs who returned to their homelands and put 'Silicon Dragon'--China's Silicon Valley--in motion beginning about a decade ago. This story of this startup, and the young female entrepreneur behind it, also showcases the energy level and smarts of China's entrepreneurs today.
It wasn’t too long before David Chao, who was clued into Shen’s progress, made sure that DCM backed PapayaMobile with $4 million to build its base.
Some three months-plus passed before government approvals were in place in China for investment in the startup, set up as a wholly owned foreign subsidiary, like many of the early venture-backed Chinese startups, in the Cayman Islands. DCM worked with Chinese law firm Hankun on sealing the deal.
It’s these kinds of entrepreneurial tales that show that the traditional Silicon Dragon model continues strong in China-–even while more and more investment moves locally within China, with less connection to Silicon Valley.
With DCM on board, Shen got the benefit of working with DCM partner and SINA co-founder Hurst Lin on dealing with operational issues in China. She was also able to rely on DCM’s connections to tap into the developer community in the U.S. and Japan, while building a customer base in the U.S., home to 85% of its revenues.
Today, PapayaMobile counts 3.5 million users for its mobile social networking service that offers up social games—including PapayaFarm--and virtual goods.
What’s next? Shen says she’s totally absorbed in building the business, flying regularly between Silicon Valley and Beijing to keep pace with the startup’s fast growth. Given the competition in China in the social networking and gaming sector, that’s likely a good thing.