Page 134 - How China Is Winning the Tech Race

2007 are at least 30 percent increases over $16 million in revenues and $3
million in profits in 2006.
Lingtu is slugging it out with dozens of start-ups in China. Among them
is AutoNavi Software Co., funded by the legendary Sequoia Capital. Some
have “killer ap” technology. Three-year-old eDuShi in Hangzhou turns a
close-up of a city neighborhood into a 3-D computer-generated map.
Shanghai start-up City8.com offers local search with 360-degree panoramic
real street scenes, akin to Google’s controversial Street View service. 9
To check out Lingtu more thoroughly, I call Dave Sonnen, a senior con-
sultant at International Data Corp. and a leading digital map expert. He has
never heard of the Chinese start-up
Lingtu; neither had two other map
gurus I tapped in the United States.
“Lingtu’s large database and comprehensive Sonnen is amazed to find a young
map software give it an edge.” Chinese company with such an ad-
vanced and comprehensive volume
Dave Sonnen,
of digital maps. After doing some
senior consultant, IDC Corp.
homework, he concludes that
Lingtu has the upper hand over the
overseas newcomers because of
local industry knowledge and a head start in compiling a large database of
China’s terrain. “Lingtu’s large database and comprehensive map software
give it an edge,” he says.
Lingtu makes digital maps the Chinese way: quickly and efficiently. For a
small company, Lingtu’s workforce of 1,000—up from 700 the year before—is
huge. Its profit margins of 19 percent are respectable. Low labor costs in China
help, but the founding team knows how to stretch a renminbi to the nth degree.
Consider this: Lingtu has raised $39 million in financing to make digital maps
for China, whereas it took TeleAtlas $250 million to enter the U.S. market.
“Making maps is a capital-intensive business and takes years to do,” venture
investor Tse points out. “But Lingtu is able to do this at a much lower rate.”

T ime for a new CEO

The next time I’m in Beijing, I follow up with Tse to get the latest on Lingtu.
Big news awaits me. A new CEO and a new CFO with multinational expe-

108 SILICON DRAGON