The publicly listed French company behind professional social network Viadeo this morning announced that it would be shutting down its operations in China next week, and that it is closing its data center in California to move its servers to the cloud.
Founded in 2004, Viadeo entered the Chinese market in 2007 with the acquisition of Tianji.com after raising €5 million from AGF Private Equity and Ventech.
Globally, the LinkedIn rival says it has 65 million registered users.
The company says it is pulling out of the “fiercely competitive” Chinese market because it didn’t raise as much capital in its 2014 IPO as anticipated (and would need more cash to be able to grow in China) and an overall change in professional user behaviour.
Viadeo says it went looking for an investor, buyer or local partner in the first half of this year, but none of that ever materialised. The company says that will be easier to pursue profitable and sustainable growth once it has been freed from “the financial burden of TIANJI, both in terms of cash flow consumption and the impact on operational profits”.
The company’s board of directors will look for and appoint a new COO to help with the ‘strategic redeployment’, after it hired a CFO in November.