by Bain & Company, Inc. or any of its subsidiaries.
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• Executive Summary • Detailed Business Assessment
– US Market Benchmarks – China Market Dynamics – Financials
Strategy and business model
• has a click-and-mortar business model for job placements, consisting of
– a newspaper, Career Post Weekly, launched in Oct 1998 – a website, , launched in Jan 1999
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Executive Summary
Investment Overviewased start-up company established in 1998 focused on the online
operating history and ~US$1M in 1999 revenue
• Current #1 or #2 position in 3 key city markets (0.7 RMS in Beijing, 5.5 RMS in Shanghai
and 0.3 RMS in Guangzhou)
recruitment valuation multiples are attractive (base case: 3.8X return on money, 57% IRR), but not blockbuster (high case: 7.9X return on money, 99% IRR)
recruitment market
• Its key partner team includes 1 Bain partner (Rick Yan) and 3 former Bain consultants • is seeking to raise US$3M in exchange for a 5% equity stake in the business
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Investment Due Diligence Assessment
23 December 1999
Disclaimer The investment opportunity described below has not been recommended or approved by Bain & Company, Inc. or any of its subsidiaries. No representation or warranty is made as to the accuracy or completeness of the information contained in this memorandum. Oliver Stratton and Jim Hildebrandt are distributing this memorandum in their individual capacities and not as representatives of Bain & Company, Inc. or any of its subsidiaries. Any investment in will not be guaranteed
• Exposure to potentially significant sovereign risk given China’s unclear regulations on foreign
ownership and operation of internet businesses
• Expected investment returns based on business plan forecasts and comparable US online
Agenda
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Executive Summary Summary Investment Evaluation
Pros Cons
• Attractive online recruitment market space in China with high growth potential • Differentiated click-and-mortar business model (online and newspaper) with a 16 month
• No competitor has locked up exclusive relationships with key portals - maintaining #1 or #2
position appears to be a realistic goal
• Capable management including head of Bain’s China practice and 3 former Bain consultants • Realistic business plan targets (in Private Placement Memorandum) with additional upside if
timing of adjacent business roll-out (eBay, business models for China) is accelerated (business plan financials are 99% driven by core recruiting business)