Xiaonei Rakes in More than Facebook

Facebook’s popularity has grown… and how! Millions of people the world over have uploaded their photographs and albums on this free-access website and exchange messages on this platform every day. But the Chinese want things done their way! So, China decided to have its own “Facebook” to share precious moments and memories.

A little over a year-and-a-half back, 4 graduates from the Tsinghua University (namely Wang Xing, Wang Huiwen, Lai Binqiang and Jacky) started Xiaonei.com. This social networking site has the look and feel of Facebook, except that it is in Chinese. The prospects were bright and in less than a year after the site went live, Xiaonei was acquired by China-based Oak Pacific Interactive (OPI).

Xiaonei, which is widely known as the “Facebook of China,” is the nation’s largest online community website among college students, with more than 8.8 million active users, according to BeijingReview.com. Xiaonei had 280 million page views in March this year, according to the Communication Information report cited by Pacific Epoch.

Xiaonei has now raised $430 million from financial backers, said VentureBeat, quoting the company’s investors. One of the investors is Softbank Corp, a Tokyo-based investment firm, which acquired a 14% stake in OPI for ¥10 billion in April this year. The funds have actually been raised by OPI, but mainly to be invested in the site.

With the investment backing, Xiaonei is ready to take on Facebook in China. VC firm Accel Partners decided to be on the winning side and has invested in both OPI and Facebook! Talking of fundraising, Xiaonei did a whole lot better than its US counterpart! While the Chinese company was quick to attract $430 million, Facebook managed to garner $350 million over several months!

Billionaire investor Li Ka-Shing, who had invested $60 million for a 0.4% stake in Facebook in November last year, was said to have invested another $40 million a couple of months back. The Hong Kong telecom tycoon’s investment was definitely planned to help the US company enter the Chinese market. But Xiaonei is sure to give Facebook a run for its money.