GLG Invests in Chinese Social Media Startup


Gerson Lehrman Group (“GLG”), the leading expert network, made a minority investment in Shanghai-based, a Chinese version of LinkedIn.  The investment reflects GLG’s continued drive to diversify its business, expanding deeper into social media.

GLG’s investment was part of Ushi’s recent $3 million funding round, which closed last month.  The capital raise was the second round after the firm’s initial $1.5 million funding.  Ushi was founded in February 2010 by Dominic Penaloza, whose background is private equity and investment banking.

Ushi is a fast growing social media site for professionals, claiming over 40,000 CEO-level and 10,000 CTO-level executives from more than 250 of China’s top 500 largest companies.  Given Penaloza’s background, the firm is particularly strong in the private equity sector, having representatives from over 85% of China’s venture capital and private equity firms.

For GLG, the investment continues its movement to rebrand itself as a social media firm.  Note that GLG is now a “membership-based marketplace for business expertise,” not an expert network.  Earlier this year GLG launched a new service, G+, which is collaborative Q&A service drawing on GLG’s expert base.  Does this sound similar to Quora?  Correct, but G+ is exclusively business-oriented, competing on the quality of its member base.

Ushi recently launched a similar product in China called Ushi Answers.  GLG will advise Ushi on the commercial development of and Ushi Answers.  Also, Ushi members will be invited to join GLG’s network to expand its coverage in China.

We found a comment by Ushi’s founder, Prenaloza, on Quora answering the question whether Quora is competitive with GLG:

“Yes. GLG’s core value is matching experts with hedge funds. In other words, GLG does not provide any information, GLG provides an efficient way for hedge funds to find the relevant experts for very specific matters. If Quora continues to grow, and experts continue to publish their expertise inside, it will be a competing way (and cheaper way) for hedge funds to find relevant experts for very specific matters. I agree that GLG provides ancillary value in terms of CYA documentation and preparing experts to be “for hire”, and Quora would have to provide solutions for these issues.”

GLG’s development of G+ creates a business version of Quora.  It isn’t yet clear whether this is a sustainable difference, like LinkedIn’s differentiation with Facebook.  Part of the answer lies in the engagement from GLG’s members, which has noticeably increased since May, when we last examined it.  Investments like Ushi help also.

The full press release is below:

GLG and Ushi Announce Partnership

SHANGHAI, October 14, 2011 – Gerson Lehrman Group (“GLG”) and (“Ushi”) today announced a business partnership and a strategic minority investment by GLG in Ushi.

GLG is the world’s largest membership-based marketplace for business expertise and the leading firm of its kind operating in Asia, its fastest-growing region.  In China, GLG has a network of more than 25,000 subject matter experts who can be engaged real-time and on-demand to assist in deal sourcing, research and due diligence, as well as portfolio management support. Ushi (优士), which means “outstanding professional” in Chinese, is China’s leading professional social networking site. Based in Shanghai, Ushi’s fast growing member base of white collar professionals and entrepreneurs includes over 40,000 CEO-level and 10,000 CTO-level executives, representatives from more than 250 of China’s top 500 largest companies, and key individuals from over 85% of China’s venture capital and private equity firms.

GLG and Ushi’s businesses are complementary, both thriving on the power of trusted networks and knowledge-sharing. Ushi’s high quality and well-connected members may be offered the opportunity to join the GLG marketplace to expand GLG’s expert network in China. Meanwhile, GLG will advise Ushi on the commercial development of and Ushi Answers, its new invitation-only Chinese language service recently launched to a select group of Ushi members. Ushi Answers is a community-driven, collaborative question and answer service that aims to become China’s main repository for useful answers to questions about business topics.

David Legg, GLG’s Head of International Markets, who will sit on Ushi’s board, commented: “It’s rare to find a management team that combines deep experience in social media and consumer Internet with a clear understanding of financial services, and consulting, and such a strong commitment to governance and quality control.  GLG is very happy to be partnering with Ushi. As China increasingly goes global, GLG and Ushi will facilitate that process by helping decision makers find the relevant expertise and connections.”

“Ushi is excited to partner with GLG to help develop Ushi Answers into the best online business knowledge resource in China,” said Mr. Dominic Penaloza, Ushi’s CEO and co-founder. “We will help the thousands of business experts who log into Ushi every day collaborate on topics of interest and potentially offer their insights to GLG clients. Ushi Members who demonstrate deep domain knowledge will be able to monetize that knowledge by joining GLG’s business expertise marketplace.”


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