Former SOHU President Launches VC Search Fund

Filed in archive Venture Capital on December 15, 2005

Victor Koo, former Sohu (Nasdaq: SOHU) president and COO, is now banking on a new 3rd generation Internet "search fund," 1Verge Internet Technology Inc. for 2006 and beyond. Koo, along with two other partners, believes that the golden age for China's Internet industry has yet to come, despite 2005 media trumpeted deals worth billion dollars.

According to ChinaBroadcast, Koo stated, "that the real golden age will come in three to five years and it will be a golden age for big deals on the capital markets." Koo, who has been a champion for the development of China's Internet industry for 11 years, has launched this $2 million fund and the dotcom veteran seeks dominant stakes in small-size companies in the area of consumer-targeted 3C convergence.

He ardently believes that by 2008/2010, when, respectively, the Olympic Games is held in Beijing and the World Expo in Shanghai, China's economy will be on a much larger scale and the Internet will be embedded in the daily lives of Chinese people. 1Verge will be based in Beijing and will continue to ride the CREST of China's economic growth, cites Phil Lin, an adjunct professor of professor at Columbia University Graduate School of Business in New York in his admirable China, Tech & Business blog.

Koo anticipates the new model may draw fire from VC critics in China. People will see the "search fund" label as an effort to paper over a lack of solid direction. But the sought after, or make that heavily-recruited Internet executive insists that he's on the right investment trajectory. After all, he was responsible for Sohu, China's premier online brand and now indispensable to the daily life of millions of Chinese who use the portal network for their news, search, wireless messaging, instant messaging, e-mail, browsing, games and shopping.

"I trust the the team I've put together---a core team of a dozen people---and we are looking at several new projects, both acquiring companies and starting our own projects," claims Koo in a recent
Red Herring article.

There are many compelling reasons for Koo's optimism including, China's huge and expanding converging markets for mobile, television and personal computer products.

It's an interesting trend as previously mentioned in CVN to witness so many Chinese entrepreneurs channeling their wealth and reinvesting in new tech start-ups.