撰写Text | Photon Planet Hao Xin, Wu Xianzhi
Editor | Wang Pan
On June 19, former Xiaodu CEO Jing Kun and former Xiaodu CTO Zhu Kaihua officially announced the latest progress of entrepreneurship, and their company "MainFunc" completed a $60 million seed round of financing, which was led by Blue Chi Venture Capital, and the company’s post-money valuation was $260 million.
We asked Zhu Tianyu, managing partner of Lanchi Ventures, about this issue, and the other party responded that "you can refer to the information officially released by the company", and did not deny the authenticity of the above information.
Continuing the configuration in Xiaodu, Jing Kun is the CEO and co-founder of the new company, and Zhu Kaihua is the CTO and co-founder. On June 19, MainFunc launched "Genspark", a search product benchmarking Google and perplexity.
(Source: PitchBook)
When the opportunity of AI 2.0 comes, it is a very common thing for executives of big factories to leave and invest in entrepreneurship. The reason why Jing Kun and his old partner Zhu Kaihua can attract attention has a lot to do with their past resumes. The former is known as the father of "Xiaobing" and used to be the chief architect of Baidu Big Search; the latter specializes in basic search architecture and strategy module, and pioneered DNN search ranking model. The combination of the two seems to make it logical to make search products.
More importantly, before they officially launched their business, they had already successfully done a small degree with a valuation of tens of billions – which was once regarded as "the most successful project within Baidu". At the beginning of last year, small degree had completed a B + round of financing, and news of "small degree to IPO" also came out from time to time. Perhaps because of this, Lanchi gave a "sky-high price" in the seed round.
There are still many details worth exploring behind Jing Kun and Zhu Kaihua’s entrepreneurship:
According to people familiar with the matter, "Jing Kun left Baidu and almost hollowed out the entire Xiaodu". This kind of "establishment" type of departure and entrepreneurship rarely occurs in China, but it seems to be quite common in the AI field. For example, the last case was the AI start-up Step Star.
In October last year, Jing Kun officially announced his resignation from Xiaodu. In March this year, the new team applied for the MainFunc trademark, applied for the Genspark trademark in April, and announced the product and financing in June, a difference of only eight months.
The first product, Genspark, features a "search + Wikipedia + shopping assistant" model, which complements the AI Agent DEMO demonstration at last year’s Baidu World Conference.
Zhu Tianyu, one of the top gifters, is currently the managing partner of Lanchi Venture Capital and previously served as a senior investment manager of Baidu.
To put it simply, a group of former Baidu people saved up a game and went overseas to create another "Baidu".
Old partner joins hands to recreate "Baidu"
Photon Planet tried to piece together the startup timelines of the two former Baidu executives from the information available.
In October 2023, AI Technology Review reported that "Jing Kun, the former CEO of Xiaodu Technology, left his job and joined hands with Zhu Kaihua, the former CTO of Xiaodu, to start a business in the near future." At that time, in view of Xiaodu’s business attributes, many people speculated that Jing Kun and Zhu Kaihua’s entrepreneurial direction was AI hardware. People may have forgotten that AI hardware is only the end point, and what supports the "soul" of the end point is actually a complete set of human-machine interaction based on search.
(Source: United States Patent and Trademark Office website)
According to the official website of the US Patent and Trademark Office, the main body of "MainFunc" founded by Jing Kun and Zhu Kaihua submitted a trademark application on March 25, 2024. The first product "Genspark" submitted a trademark application on April 8, 2024, and opened the "X" official account that month.
According to the startup process, the trademark registration application is approaching the launch of the product. Just over two months later, on June 19, MainFunc announced the completion of its first round of financing, and Genspark launched Product Hunt, a foreign new product aggregation platform, and launched a public beta.
This is also the first time that the entrepreneurial veil of Jing Kun and Zhu Kaihua has been completely lifted. The official X account of Genspark reprinted the promotional news about Jing Kun and Zhu Kaihua, and Jing Kun and Zhu Kaihua also clearly marked the identity of "maker" on the product page of Genspark on the Product Hunt website.
(Source: Genspark official promotional image)
"The company currently has less than 20 employees, and even as it grows, it will keep the team relatively lean," Mr. Jing said in an interview.
Ordinary small-scale entrepreneurial teams, from determining the entrepreneurial direction to launching products, take at least a year or even longer, and there is no guarantee of financing.
Lanchi Venture Capital has been quite active in this round of AI investment, having invested in Dark Side of the Moon and Lu Chen Technology, who are currently sitting at the card table. Its attitude towards entrepreneurs is also relatively friendly, and it single-handedly promoted the addition of Wan Lei, the current waveform intelligent CPO.
We understand that investment institutions, including Lanchi Venture Capital, are very cautious about investing in AI entrepreneurs in the seed round, with a maximum amount of several million dollars. For reference, the waveform intelligence led by Lanchi Venture Capital, the seed round financing is only one million yuan, and the Pre-A round amount is ten million yuan. In comparison, Jingkun’s 60 million dollars (over 430 million yuan) is simply a huge sum of money.
Jing Kun and Zhu Kaihua are targeting what Silicon Valley describes as an AI search track that "can’t even get into it". There is perplexity proofing in front, which changes the search process in the form of dialogue. The latest valuation of foreign markets exceeds $1 billion.
Just as Bot products need to be benchmarked against ChatGPT, AI search also needs to be benchmarked against perplexity. And Genspark has great ambitions, and it has to fight two at the same time: Google and perplexity.
In the interview, Jing Kun repeatedly stressed that "it is necessary to ensure that a highly personalized and relevant experience is provided, free from commercial biases and SEO content."
At present, Genspark’s product form is the same as Google’s website search, like Google’s transformation of search, embedding Copilot assistant function, aggregating search answers; Jing Kun’s "free from commercial bias" is reflected in that the ranking of search pages is determined by the user, and like Wikipedia, it can be modified and supplemented at any time. This function is only available for payment in perplexity; under the "product" search function, Jing Kun envisions that the operation of booking air tickets and purchasing goods can be performed through AI Agent.
Small effort, miserable track
Jing Kun and Zhu Kaihua’s "revolutionary friendship" was forged over a decade at Baidu. The most striking part of their resumes is that they both played a pivotal role in the history of Baidu’s basic search architecture.
Most Baidu people have a positive evaluation of Jing Kun using multiple competitive products at the same time, "Baidu is rare, has leadership, and is very good to subordinates."
As one of the few businesses in Baidu that are incubated internally and financed independently, Xiaodu has also attracted the attention of many first-class market investors, including CITIC Industrial Fund, Baidu Capital, IDG Capital, Qianshan Capital, etc. Since the completion of the first independent financing in September 2020, Xiaodu has experienced three rounds of financing so far. The post-money valuation of the latest B + round of financing is 35.50 billion yuan.
"Before and after Jing Kun and Zhu Kaihua left, almost all of Xiaodu’s core personnel left." In October last year, the departure of Xiaodu’s two core executives triggered an internal shake-up. Another source mentioned that Jing Kun’s departure took only two weeks from the news to the landing, and the reason for his departure may involve the issue of equity repurchase.
The rumor may not be groundless. In August 2021, when the B round of financing was completed, the market had rumored that it wanted to seek an IPO on the Science and Technology Innovation Board, but it never happened due to various reasons. Xiaodu’s "big factory entrepreneurship project" is a double-edged sword. With a background of giants, it is easy to get financing. At the same time, investors also have clear listing expectations, so as time goes by, the pressure on executives will increase.
In addition to the factor of giant endorsement, Xiaodu has fought hard battles again and again, and finally got the position of "first brother" of smart speakers in China, but this crown has always made it difficult for Xiaodu to break free from the quagmire of losses.
In the past three years, there have been descriptions of Xiaodu in Li Yanhong’s OKR, and they are all the last KR of the O2 part, indicating that Baidu has tilted a lot of resources to intelligent hardware represented by Xiaodu. After all, when autonomous driving was still on the air, the statement about IDG was only the third O.
In 2022, Li Yanhong’s statement about Xiaodu was: household smart devices shipped xxx units, achieving revenue xxx, and losses did not exceed xxx (committed); the statement in 2023 did not change even a single word. The situation changed in Q1 this year. Li Yanhong’s statement was: household smart devices shipped xxx million units, achieving revenue xxx, profit -xxx, and the KR was marked as "enterprising" for the first time.
The OKR statement change reflects two facts. One is a subtle change in management’s attitude from committed to aggressive, indicating that Xiaodu’s turnaround has changed from a "must-do" task to a "challenging" task. The other is that Xiaodu’s long-term lossmaking state will put huge pressure on the management team, leaving them with the option of either seeking an IPO or launching an internal repurchase.
Jing Kun has expressed on several occasions that Xiaodu wants to "grasp both education and family IoT". To be precise, it is to rely on family IoT to gain scale growth and get more data feedback, and to rely on educational hardware to obtain higher profits. This plan was overshadowed by the departure of Xiaodu’s start-up management team.
According to Sandalwood e-commerce monitoring data, learning machines and learning tablets have undergone a ranking change in the education market from the first week of October 2023 to the whole of January this year. The market share of small learning machines and learning tablets has dropped from the third to the fourth in the same period last year, and sales have fallen by 47% year-on-year. Fortunately, on May 27, small technology released a new learning machine Z30, and the launch of new products will boost the previous sluggish situation.
"Ex-Baidu People" Point Their Guns at Google
We can see a little bit of Baidu search in the limited information released from Genspark.
"Aggregate search + Wikipedia + shopping assistant" echoes Baidu’s "Baidu search + Baidu content ecology + shopping guide (such as Gaide ranking) " back then.
As early as mid-2022, before ChatGPT detonated in the technology industry, Baidu had almost brought the search engine that was then transformed into a large model to the table. At that time, Baidu launched the cross-modal large model "Zhiyi" and the new generation index "Qianliu". Among them, Zhiyi is based on the model architecture of software and hardware customization and joint optimization. Baidu has also developed model compression and prediction optimization technologies represented by quantification and distillation to achieve a nearly lossless large-scale model of business.
Baidu is well aware that search is the largest application prospect of AI, and the search form will not be limited to the keyword search form in the search box, including conversational search, picture search, voice search, and even the understanding-generation given by the large model. However, Baidu is clear, and Jing Kun and Zhu Kaihua are also clear, especially Jing Kun has contributed a lot to Baidu’s voice, picture, and conversational search.
According to the DEMO released by Genspark, this new product has a strong "taste". For example, the idea of travel itinerary planning is used in the case, which is similar to the DEMO released by Baidu World Congress last year.
Regarding the future direction of Genspark, Jing Kun mentioned that many Internet users, especially those younger than Google, do not want to filter their results just from search advertising and SEO-driven content. This sentence at least reminds people of Google, Baidu, and ByteDance’s search products.
On the issue of AI search monetization, Jing Kun is also very Internet-based, "considering various future options, which may include paid subscriptions, advertising, sponsored links and revenue sharing".
It was never the new giants who fought against the old giants, but the core figures who were familiar with the old giants. Zhu Tianyu, who worked for Baidu Zhan Investment in his early years and is currently the managing partner of Lanchi Venture Capital, once said, "Never take Baidu Venture Capital’s money when you start a business."
Now it seems that instead of taking the money from Baidu Venture Capital, a group of former Baidu people, after years of Baidu’s "fighting monsters and upgrading", went overseas and launched a battle against Google on behalf of Baidu.