The Chinese Internet company Qihoo 360 has significantly increased its bet on a Brazilian cloud-based online security company, PSafe Tecnologia, by leading a $30 million round, the company said Wednesday.
Redpoint Ventures, Redpoint e.ventures and Pinnacle Ventures were all early investors in PSafe and also participated in the new financing round. The new investments, which closed last month, value PSafe at approximately $130 million.
Qihoo 360’s stake was not disclosed, but it becomes the largest investor in PSafe, with Redpoint right behind it. It is thought to be one of the largest investments by a Chinese firm in a Brazilian Internet start-up.
PSafe, which is part of the Rio de Janeiro-based holding company Grupo Xango, was co-founded by a former Microsoft executive, Marco De Mello.
The investment by Qihoo reflects the growing international ambitions of Chinese Internet companies, which are no longer content just to compete in the domestic online business while contending with government censorship and website blocking.
A leading Chinese Internet services company, Tencent, introduced its WeChat mobile communications platform, in Brazil in July. Baidu is testing a Portuguese version of its search engine and considering an introduction for next year, according to recent Brazilian news reports.
In China, Qihoo has been involved in legal battles with Tencent. It also recently lost out to that company in a contest to forge a partnership with the Chinese search engine firm Sogou.
Qihoo started looking at Brazil in 2010, providing a small investment to PSafe when it was founded at the suggestion of Redpoint, which had been an early investor in Qihoo. Qihoo also provided PSafe a license to use its antivirus cloud-scanning technology in Latin America.
In 2010, “we were not very clear about the future of PSafe,†said Li Tao, Qihoo’s vice president of business development and international operations. “We made that investment as a test.â€
But now, it sees so much potential that it did not seek out new investors in the latest funding round.
“We decided that it is in Qihoo’s best interests to see PSafe fully develop and help it become of the best Internet security companies in Latin America,†Mr. Li said.
Jeff Brody, Redpoint’s founding partner, said that Latin America was providing a lot of opportunities for Chines firms as other markets mature. “For a lot of Chinese companies, the U.S. and Europe are tough,†he said. “Brazil and Latin America are pretty attractive and have many parallels.â€
Eric Pfanner contributed reporting.
