HONG KONG, CHINA: Lee Kai-Fu, who recently left Google China to start a fund backed by some of Greater China's biggest technology names, is eyeing cloud computing, e-commerce and the mobile platform industry for some of his first investments.

Since leaving Google last month, Lee has raised about $115 million for his Innovation Works fund which counts Hon Hai Chairman Terry Gou, YouTube co-founder Steve Chen and Lenovo Group Chairman Liu Chuanzhi among its investors.

The fund hopes to fill a gap in China for seed capital and aims to nurture 20 business projects and bring five to first round venture capital funding each year, as it searches for the next Baidu or Alibaba.

"If you look at firms like Baidu or Alibaba, the first stage is where they are most exposed to risk and that's where we have the greatest opportunity to add value," Lee said in an interview with Reuters on Monday, referring to China's leading search engine and its top online marketplace.

Lee, who worked at Microsoft and Apple before heading Google's China operations, is considered a China technology veteran. He hopes his incubator will create not only high-growth technology companies, but also more savvy Chinese businessmen who can compete on the global stage.

"Bigger tech companies in China are becoming good at what they do and more sustainable, but the innovator's dilemma causes them to be less capable of creating a completely brand new paradigm," he said.

Lee said the three areas he was keen to invest in were e-commerce, mobile platforms and cloud computing.

For e-commerce, a critical mass of users was slowly taking shape as the barriers of lack of trust, poor delivery systems and unclear payment structures were overcome, Lee said.

"Only a third of the Chinese population as a percentage is online and those who are online spend only one-sixteenth of the Americans," he said. "The growth opportunity just to catch up with the U.S. is ... 48 times."

According to research firm Analysys International, China's B2B e-commerce market was valued at 1.4 billion yuan ($205 million) in the second quarter of 2009, with Alibaba.com dominating.

Similar opportunities exist in mobile advertising and cloud computing, a business model built on providing services over the Internet, Lee said.

Lee, whose tenure at Google was marked by strained relations with Beijing censors, helped the firm increase its market share to nearly 30 percent from the high-teens to 20s in 2005.

Lee said he expected China's search market to grow steadily rather than explosively, as advertisers become more sophisticated about using the Internet and the search becomes better monetised.

According to Analysys International, Baidu held 61.6 percent of China's search market in the second quarter, while Google held 29 percent.

While at Google, Lee became a mini-celebrity with his coaching blog and numerous press interviews, and students and entrepreneurs were known to approach him for his autograph.