Chinese Startup YeePay Sees 10-Fold Business Increase Through IBM Venture Capital Partnership Network
IBM’s Venture Capital Initiative Helping Drive Innovation for Startups
SHANGHAI -- Nov 4, 2005 -- IBM announced today that its corporate venture partnership strategy is paying off for Chinese e-payment startup YeePay, which has achieved a ten-fold increase in customer transactions in just five months.
YeePay, www.yeepay.com, which in Chinese translates ’easy pay,’ is working with IBM to help solve consumer payment challenges in China by providing an innovative e-payment platform that enables customers to make real-time payments over the telephone, mobile or online. YeePay has teamed with IBM to build an open standards-based infrastructure to easily yet securely integrate the startup’s systems with those of its customers’ and banking partners’ to deliver electronic payment services.
In just five months, YeePay increased its financial transactions handling from just $120,000 to over $1.2 million per month. Today, YeePay is the only e-payment provider that offers an integrated solution that combines online, mobile and telephone payments and partners with the largest Chinese Bank, Industrial and Commercial Bank of China (ICBC) and IBM; making it the most trusted and credible solution in the Chinese e-payments market. The startup is one of the fastest growing e-commerce payment service providers in China, with key customers that include: China Unicom, Baidu.com, Sohu.com, eLong, JRJ.com (China Finance Online), and 800Buy.
“Payment is all about trust, and IBM is a well-trusted brand. Our customers recognize that,” said Bin Tang, CEO of YeePay. “Backed by IBM systems and support, we’re free to put all of our energy into responding to the rapid growth and huge demand of the market here in China.”
YeePay is backed by Silicon Valley based venture firms and MINT Capital, a close partner in IBM’s venture capital network. In January 2005, MINT introduced YeePay to IBM to help the company gain credibility and to establish them as a leader in the $16 billion Chinese e-payments market. The e-payments market is reportedly growing at a pace of 20-30% a year, with almost $15 billion spent on pre-paid mobile phone bills, $700 million on online gaming, and over $1 billion on airline e-tickets last year.
Open Standard-Based Approach Help Startups Innovate
YeePay partnered with IBM to build an open standards-based infrastructure to support its growing customer needs. The IBM system has enabled YeePay to process a steadily increasing volume of payment transactions. The package consisted of an IBM OpenPower 720 server, two BladeCenter JS20 servers and WebSphere Application Server as the foundation for the reliable, secure and flexible infrastructure the company required. The YeePay system also uses the flexibility of the Linux operating system to integrate the custom applications at the core of YeePay’s business with the systems of its partner businesses, banks, financial services agencies and communications carriers, forming a complex -- yet highly secure -- payment network. Linux allows YeePay to offer an integrated and a scalable solution with the potential of expanding and offering a similar platform to other countries.
Additionally, with IBM, YeePay has a single point of contact for support, maintenance and post-sales service, which saves the startup valuable IT management time. In fact, YeePay management were so impressed with the ease of integrating IBM software that they decided to switch from BEA middleware and Oracle database software to WebSphere Application Server and IBM DB2 Universal Database.
IBM’s Venture Strategy Unique in the Marketplace
YeePay joins more than 950 VC-backed startups that have joined IBM’s partner network in the last 20 months. In 1999, IBM made a strategic decision to exit the applications business. IBM realized early on that building an ecosystem of partners -- working together rather than in competition -- would be essential to its continued success in the marketplace. As part of this strategic shift, IBM formed the Venture Capital Group (VCG) in August 2000. The VCG is a skilled team of IBM professionals dedicated to engaging the venture capital community -- a key driver of innovation in the marketplace.
While most corporate venturing strategies are focused on financial investments, IBM has adopted a unique “give to get” strategy that focuses on relationships over direct investment.
“Emerging geographies like China pose a huge opportunity for IBM and our partners,” said Claudia Fan Munce, managing director of the IBM Venture Capital Group. “YeePay’s success exemplifies IBM’s winning partnership strategy which focuses on building relationships with the leading venture capitalist firms and their IT portfolio companies to find innovative solutions for customers.”
Today, IBM works with over 100 of the world’s top VC firms to identify emerging technologies and nurture potential startup partners. Business partnerships account for one-third of the company’s revenue. The Venture Capital Group’s efforts have played to the company’s acquisition strategy with five of the six software acquisitions in 2004, around the areas of business integration, information management and security, being backed by venture capitalists in its partnership network. IBM VCG has close relationships with 85% of the leading VCs listed on the Forbes Midas List, Forbes magazine’s annual ranking of technology’s top 100 dealmakers. The company has established the largest ecosystem of business partners around our middleware with some 4.5 million developers reached through its partner programs.
IBM is the world’s largest information technology company, with 80 years of leadership in helping businesses innovate. Drawing on resources from across IBM and key Business Partners, IBM offers a wide range of services, solutions and technologies that enable customers, large and small, to take full advantage of the new era of e-business. For more information about IBM, visit www.ibm.com.
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