The meeting took place at Jack's apartment, where 20 developers with lots of takeaway food and not much fresh air, were working round the clock writing code to build the Alibaba platform. Jack talked for five hours straight, telling a potentially game changing vision for China, for global trade and for the tens of millions of small to medium sized enterprises which represented the bedrock of China’s economy. By the end of the day Daniel was sold.
In October 1999, Eight Roads Ventures backed the Series-A funding of Alibaba and Daniel joined the board. The Series B round of investment quickly followed in January 2000. Alibaba was no longer in Jack’s home by then, it had a large employee base, multiple offices and a rapidly emerging reputation as one of the world’s most important B2B exchanges.
There would be many twists and turns on the way and one serious moment of jeopardy came in 2001 with the burst of the internet bubble. Alibaba needed to significantly curtail its cash outflows. Cost reductions ensued, offices were closed and initiatives curtailed but this painful consolidation allowed Alibaba to survive.
By 2004, Alibaba was a fast-growing business but still without a revenue stream or any sign of monetisation. Some investors began to lose patience. At this time, Eight Roads and Granite Growth Ventures combined forces to repurchase the significant stake held in Alibaba by Goldman Sachs. By that time Alibaba had launched what is today the largest e-commerce platform in the world, Taobao.
By 2005, major global players in the e-commerce and search sectors were in pursuit of Alibaba, most seriously Yahoo! and eBay. Yahoo! went on to invest for a 40 per cent stake and Eight Roads took the opportunity to partially reduce its holding.
In September 2014, nine years on from Yahoo!’s investment and fifteen years after Daniel’s original conversation in Jack Ma’s living room, Alibaba chalked up the world’s biggest IPO with its $25bn listing on the New York Stock Exchange.
Today, Alibaba is a subject of conversation around the globe; it has transformed existing models of commerce amongst and between individuals and businesses. To have achieved what it has and built one of the most valuable public companies in the world, involved many inputs from many people. We feel privileged to have been there from the beginning.