Bloomberg: Fan Bao and his ‘Alpha Team’ of investment bankers are scouring China’s startup scene to uncover a new wave of technology giants.
Fresh off his success as a lead adviser on last year’s $2.05 billion initial public offering of online retailer JD.com, Fan Bao was secretly dreaming of merging China’s two Uber-style taxi apps into a $6 billion behemoth. It was part of his quest to unearth China’s next big tech thing.
The problem was the dueling founders, Dexter Lu and Cheng Wei, and their equally competitive billionaire backers, Bloomberg Markets magazine reports in its June issue. “These guys were entrepreneurial gladiators who never shied from a fight,” Bao says, reclining in a high-backed leather armchair in the Beijing headquarters of China Renaissance, the boutique investment bank he formed in 2004. “But they were killing each other. I wanted them to make peace, not war.”
Bao resorted to stealth. He code-named his merger-prodding strategy “Project Rush” for the 2013 film in which Formula One racing rivals James Hunt and Niki Lauda ultimately find friendship and mutual respect. Lu’s company, Kuaidi Dache,was “Lauda.” Cheng’s Didi Dache was “Hunt.” Their powerful shareholders, Internet giants Alibaba Group Holding and Tencent Holdings were “Ferrari” and “McLaren,” respectively. “It was superconfidential,” says Bao, 44, who honed his rapid-fire English while working at Credit Suisse and Morgan Stanley.
Bao launched his mission by persuading the founders they were reducing their own equity as they tapped cash from outsiders to escalate their rivalry. On Feb. 14—Valentine’s Day—the companies agreed to matchmaker Bao’s plan to marry them in China’s biggest Internet merger. Bao took fees from both sides as sole arranger. (He declines to say how much.) Lu says he had no compunction about hiring Bao, even though the banker had done previous deals with Didi’s Cheng. “He has a great reputation for integrity,” Lu says of Bao. “We could not have found a better guy or firm to use.”