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Beijing investment firm Waterwood backs US mobile marketing platform Leanplum

Waterwood still advised by former JP Morgan investment head Fang Fang, and becomes first Chinese investor in the San Francisco-based start-up named recently by Forbes as one of the ‘15 tech companies to watch in 2018’

PUBLISHED : Thursday, 26 April, 2018, 10:17pm
UPDATED : Thursday, 26 April, 2018, 11:27pm

Waterwood, the Beijing-based private equity company, has become the first Chinese firm to invest in Leanplum, the US mobile marketing platform, as part of its latest US$52 million financing round.

Waikit Lau, Waterwood’s co-founder and managing partner, said it has joined a powerful group of venture capital investors backing the platform, but refused to disclose its own investment amount.

He added that Leanplum values his firm’s existing relationships with Chinese telecom operators, especially, as the San Francisco-based start-up aims to take its global expansion onto the next level. Leanplum already has offices in Singapore and Japan in Asia, and in Europe.

Waterwood is currently advised by JP Morgan China’s former investment banking head Fang Fang, who quit the bank in 2014 amid a US investigation into its hiring practices.

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“This round of financing could take the company [Leanplum]to the point of breaking even,” said Lau.

“We have showed that we are able to help it [the company] into Asia, particularly China, and we are ready to share on-the-ground market intelligence with it.”

Existing investors in the business include Silicon Valley venture capital funds such as Norwest Venture Partners, Kleiner Perkins Caufield & Byers, Canaan Partners and Shasta Ventures.

Canaan and Norwest, for instance, manage tech funds worth US$800 million and more than US$1 billion, respectively.

Leanplum focuses on mobile marketing solutions that help companies improve their customer engagement and retention and its client list includes popular mobile app and internet companies such as dating app Tinder, Singapore ride-hailing firm Grab, and Beijing bike-sharing platform Ofo.

It was named recently by Forbes as one of the “15 tech companies to watch in 2018”.

This most recent round is a series-D investment – generally the fifth, following seed investment – and brings Leanplum’s total funding to over US$98 million since being created in 2012.

JP Morgan’s top China banker Fang Fang to retire, as colleague Frank Gong gets promotion

Waterwood’s cash injection is being made from its recently formed US$300 million US dollar fund, which Lau said is also looking to plough capital into growth-stage firms across the Association of Southeast Asian Nations region.

The private equity firm has 22 staff in its Beijing office who also run two active renminbi funds, each worth around US$250-300 million. The operation has invested in 15 companies since starting up, with a few exits so far, said Lau.

He co-founded Waterwood after previously launching the Hong Kong-based venture capital firm Gobi Partners. Another Waterwood co-founder is Linda Liu, a former investment banker.

Fang Fang quit JP Morgan in 2014 amid a US investigation into the bank’s alleged practice of hiring “princelings”, sons and daughters of senior Chinese government officials, as a way of winning business. But Lau emphasised Fang is not involved in Waterwood’s day-to-day running.

The US Federal Reserve sought a lifetime ban, last year, for Fang from working in the US banking industry due to the hiring allegations, which if proven breach anti-bribery laws. The current status of the enforcement proceedings remains unclear.

According to the GSM Association, the telecommunications standards organisation, more than half the world’s mobile subscribers live in Asia-Pacific, mostly in China and India.

It estimates China will account for 21 per cent (or 155 million) of the 753 million new mobile subscribers expected be added globally by the end of 2020.

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