Kai-Fu Lee, Founder of Microsoft’s China Research Lab, Quits Google to Head $115M Startup Incubator in China

9/7/09Follow @bbuderi

Kai-Fu Lee, the charismatic former Microsoft VP and founding director of the company’s research lab in Beijing who reported last week that he was quitting as head of Google’s China arm, has announced that he has raised $115 million to create a new incubator for high-tech startups in China.

The new organization, Innovation Works, will mentor and prepare entrepreneurs to launch new businesses, chiefly in the Internet, mobile Internet, and cloud computing spaces, according to its website. A particular area of focus inside these sectors is e-commerce targeting the financial, medical services, and educational markets.

Innovation Works will be based in Beijing, apparently near the famous Tsinghua University, China’s most prestigious science and technology university. It is funded by a high-powered group of investors and VCs that includes Steve Chen, a co-founder of YouTube, Foxconn Technology Group, the Legend Group, and the New Oriental Education & Technology Group. The lead venture investor is WI Harper Group. Lee is named as founder, chairman, and CEO.

The goal is to target “the Greater China market, and build ‘dream teams’ to collect, analyze, prioritize and execute on the most promising ideas,” according to the Innovation Works website. “Innovation Works will accelerate an entrepreneur’s ability to prove ideas, obtain additional external funding, and then spin-off into an independent company.”

“The Chinese entrepreneurial environment is still in its formative stage, with significant barriers for the early-stage entrepreneur: the lack of management experience and coaching, the reluctance of venture capitalists to invest in companies in the formation stage, and the lack of networking and … Next Page »

Bob is Xconomy's founder and editor in chief. You can e-mail him at bbuderi@xconomy.com, call him at 617.500.5926. Follow @bbuderi

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  • Kai-Fu Skeptic

    Kai-Fu already tried this actually at Microsoft with a Beijing-based Advanced Technology Group (“Incubator”) that was supposed to bridge the gap between Microsoft Research Beijing and the Redmond product units. They were an abject failure and never shipped a product. Redmond teams saw this group as third-class Engineering talent who also were suspect in terms of their intellectual property. As a former Microsoft executive who has worked closely with Kai-Fu’s former MSR teams, I can say that while he is a brilliant scientist in his own right, he is unfortunately neither an operator nor someone who has ever built successful businesses even in a consultative/VC capacity. It seems that China is enamored purely with his self-burnished image.

  • http://fakesteveballmer.blogspot.com steveballmer

    Good luck Kai, you will be needing it!

  • emenot

    Well Kai-Fu step stoned on Microsoft and got China to back him, luckily as above mentioned people knew better, he is up the creek without the Microsoft paddle…..