Investing in China for the Long Term - Cisco Investments

By Joe Chang, Cisco Director

Cisco is well known as a leading and active acquirer in technology, with over 169 acquisitions, and a quarter of our current revenue and employees attributable to acquired companies. However, our Corporate Development activities in China are distinctive in that we are focused largely on minority investments and non-controlling stakes, with an objective to support and accelerate the growth of Chinese technology companies rather than acquiring them.

Since 2000, Cisco has invested over US$1 billion through limited partnerships and direct investments in China. Our direct and indirect investments have supported and helped grow Chinese industry leading companies including Digital China, Shanda, Vancl, Focus Media, Union Pay, Alibaba, and 21ViaNet.

While financial return is of course critical, we are first and foremost a strategic investor, focusing on opportunities aligned with Cisco’s businesses today, and we also keep a keen eye on potential future disruptions that will shape the broader, global market and ecosystem in a way that will be meaningful to Cisco’s customers and partners.

Investment becomes personally more gratifying when it involves accelerating the development of companies that deliver basic services, such as education and healthcare, to help better the lives of Chinese citizens. To make this happen, Cisco invests capital and helps provide technology and technical support to help these companies deliver these services through IT and the cloud. Urbanization is key to making these services accessible to citizens, and Cisco is pleased to play our part in helping make Chinese cities “smart” to better provide these services.  We have a large focus on exploring investments and partnerships with Chinese cloud and cloud-related companies. The cloud is central to China’s IT agenda and provides a platform to deliver services, make companies more competitive, and ultimately improve the quality of life for Chinese citizens.

Knowing that we can help Chinese companies beyond just investing money is exciting. Aside from the capital we contribute, a new focus for Cisco Investments is to accelerate the development of the portfolio companies by connecting them to Cisco IT as well as Cisco’s global network of partners and customers through our global events and programs, such as Cisco Live and our Global Partner Summit. As a strategic partner, Cisco works directly with our portfolio companies to integrate their products and offerings with our technology. We do this by accessing the scale of our sales, partner, and distribution networks to help them sell products to new customers and markets. And, we provide technical know-how and support to help improve our customer’s products and offerings on world-class Cisco networking, video, data center and IT architecture. Getting close to these companies, their innovation, and connecting them with our world-class engineers to accelerate and advance technology innovation for China and for the world is a real reward.

Cisco Investments has allocated over $100 million to invest in early stage companies that will drive the evolution of the Internet of Everything. The companies we target will be innovating critical advancements in the key enabling technologies of the Internet of Everything and will help our customers capture their share of the $19 trillion at stake over the next ten years. These include connected mobility, such as location based services, mobile payments, and mobile advertising technologies and platforms, wireless technologies and solutions, big data and analytics, disruptive storage companies, and innovation in silicon.

If you are an entrepreneur or business leader whose business fits in our interest areas, and you believe that we can help accelerate your business and mutually benefit from working together, we would love to have a discussion.