DFJ ePlanet Ventures made the map bigger

In September 2000, a venture fund bought 7.2 million preferred shares in a Chinese search company. The price was $1.0415 a share. The company was Baidu. The investor was DFJ ePlanet Ventures. Even before anyone knew how that particular wager would turn out, the transaction contained an argument: a Silicon Valley investment method might travel much farther than Silicon Valley investors usually did.

This is the interesting thing about ePlanet. The familiar names in its history, Baidu and Skype, invite a story about picking winners. But its more useful story concerns the machinery around those choices. Who could understand a business in another country? Who would sit on its board? Who would write another cheque after the excitement of the first one had worn off?

Two cheques. Four years apart.

Baidu’s prospectus supplies a pleasing antidote to venture capital folklore: arithmetic. Multiply those September shares by their purchase price and the investment comes to about $7.5 million. In June 2004, DFJ ePlanet and its affiliates bought another 749,625 preferred shares at $6.67 each, approximately $5 million more. Google also invested in that round. The total for ePlanet and affiliates was roughly $12.5 million.

The second purchase matters. An investment thesis has to survive time, competition and the awkward stretch between a working product and a durable business. Baidu went public on Nasdaq in 2005. The earlier purchases show a willingness to remain involved through multiple stages, rather than simply claim an early sighting of a company that later became famous.

There was governance alongside the money. Baidu’s listing documents identify ePlanet’s Jixun Foo and Asad Jamal as directors. That detail makes the investment less mysterious. This was participation in a company’s development, with people attached to the responsibility. The share register tells you how much was purchased; the board list tells you something about how the relationship worked.

The office was part of the thesis

Founded in 1999, DFJ ePlanet was an international partnership involving Asad Jamal and Draper Fisher Jurvetson. Contemporary reporting described a roughly $650 million fund. Its operations stretched across places including Silicon Valley, London, Singapore, Beijing and Shanghai. That footprint addressed a practical problem: promising technology and the capital willing to fund it did not necessarily share a postcode.

For entrepreneurs, the offer was equity financing combined with investment relationships and experience across markets. For the investors supplying fund capital, the proposition was access to businesses beyond a domestic deal pipeline. ePlanet occupied the space between an entrepreneur’s local circumstances and an investor’s international ambitions. Those two constituencies wanted different things from the same organisation.

The underlying transaction is straightforward: a fund acquires an ownership stake and seeks an eventual return when those shares can be sold. The entrepreneur receives capital while sharing ownership and, sometimes, governance. That makes investor selection a consequential business decision. A founder choosing between international venture investors should examine the people responsible for the relationship, the stage they finance and their experience with the relevant market. For ePlanet, the Baidu record provides a concrete example of follow-on capital and board involvement. Those are useful details to investigate beyond the names on a portfolio page.

Its distinction was the international mandate and the organisation assembled around it. Local teams and portfolio board seats gave that mandate substance. In a later account of the DFJ network, Tim Draper argued that the network helped make investments in Skype and Baidu possible. The October 2005 Venture Capital Analyst profile records ePlanet co-leading Skype’s Series B in 2004.

When the partners wanted the same map

The arrangement changed in 2005, when DFJ and ePlanet parted ways. Jamal’s explanation, reported in 2008, was that DFJ also wanted to invest globally, creating a conflict. The useful lesson is about partnership design. A division of responsibilities can make sense at the beginning and become less useful once both partners want to perform the same role.

“The name change to ePlanet Capital reflects our evolution into a global growth and expansion stage investor”Asad Jamal · January 2011

The business evolved too. In 2011, ePlanet Ventures became ePlanet Capital, with Jamal describing a focus on growth and expansion, particularly in emerging markets. The portfolio stretched beyond internet services. ePlanet and Headland backed Indian medical technology company Trivitron in 2007; a financing led by Fidelity in 2012 provided them with partial exits. Different businesses called for different routes to an outcome.

Retail data. Heart valves. Different endings.

Retail software made another part of the approach tangible. ePlanet joined eCommera’s $41 million Series C syndicate in 2014. The company worked on the messy business of connecting retail data with operating decisions. An Accenture announcement in 2016 also identified ePlanet as an existing investor in DynamicAction, whose analytics helped retailers examine inventory, pricing and profitability. These were tools for merchants, rather than products sold by the fund itself.

In April 2021, EDITED acquired DynamicAction, combining external market information with internal retail analytics. Another investment had a much harder ending. Direct Flow Medical developed transcatheter heart-valve technology. Its lender PDL BioPharma reported that a prospective financing changed from equity into a smaller loan on less favourable terms. Direct Flow shut down in December 2016. The immediate failure was financing availability, despite the underlying technology.

What travels, and what has to stay local

A founder can copy the questions here without copying the portfolio. Who understands the buyer in the next market? Who can help govern the business? What happens if the next financing arrives late or changes shape? Cross-border experience becomes useful when it answers those questions. It becomes less useful when local knowledge is thin, responsibilities overlap or a capital-intensive company needs funding that never arrives.

ePlanet’s website now describes an approach built around sustained growth, data analysis and more than 100 cumulative investments. The history gives those words a test. Look for the local team, the board seat and the follow-on purchase. Then look at the company that could not raise its next round. Both belong on the same map.