Tech Planet (WeChat ID: tech618)
Wen | Wang Lin and Chen Qiaohui
Cover source | Visual China
Tech Planet learned from a number of independent sources that the byteDance investment department has undergone major adjustments, and zhao Pengyuan, the former No. 1 position of Byte Zhan Investment, took 5 people to the president's office to be responsible for the company's overall strategy; some personnel of the strategy and investment department transferred to the business line to do strategy, some layoffs, and the basic layoffs of the financial investment team.
Relevant people familiar with the matter said that the adjustment was temporarily implemented on the evening of January 18, and nearly 100 people were laid off.
Tech Planet asked ByteDance for confirmation on the above news. The relevant person in charge of ByteDance responded that the company conducted an inventory and analysis of the business at the beginning of the year, decided to strengthen the business focus, reduce the investment with low synergy, disperse the employees of the strategic investment department into various business lines, and strengthen the cooperation between the strategic research function and the business. Planning discussions are also underway for the business and teams involved.
In addition, Tech Planet also exclusively learned that Byte in the second half of last year had planned to launch a new venture capital company, according to relevant insiders, in the name of ByteDance's birthplace of Beijing "Jinqiu Home", "Jinqiu" as a new brand of Byte Investment, the establishment of "Jinqiu Venture Capital", but after this incident, the project may be shelved.
Byte investment has accelerated in recent years, and large sums of money have continued to be made
Byte Outbound Investment, which is mainly responsible for its strategic investment department, was formed by the merger of the original investment department and the strategy department in mid-2018, and initially a small team of only 4 investment managers. According to the business introduction of byte war investment department in external recruitment, the strategy and investment department is committed to helping the company design a long-term development strategy. The department helps the company to allocate resources through continuous tracking, scanning, and evaluation of internal and external projects and external opportunities. At the same time, it continues to seek out new investment opportunities around the world, helping companies identify and focus on big trends.
The pace of investment in ByteDance has gradually accelerated in recent years. In March 2016, Byte's Toutiao announced the establishment of a 200 million yuan content venture capital fund, and launched its incubation space "Toutiao Creation Space". In January 2018, Toutiao also established a content investment fund with a scale of 200 million yuan to invest in early-stage new media content entrepreneurship projects and give priority to short video projects. At the end of 2018, foreign media broke the news that ByteDance intends to set up its first 10 billion yuan (about $1.45 billion) venture capital fund, which will be mainly used to invest in high-quality enterprises in the field of artificial intelligence and content.
At first, Byte was more betting on its core content and social fields, and later its scope expanded to education, 2B, artificial intelligence, new consumption, new energy vehicles and other tracks. It can be said that today, ByteDance's investment business covers almost all the popular tracks.
From the perspective of rhythm, ByteDance's investment is mainly divided into two stages: from 2014 to 2017, the number of investments each year has increased during this period, but the number is not too much, about 10 or so per year. However, from 2018, the number of investments in ByteDance has increased significantly to 21, followed by 26 and 36 in the next two years, and 40 in the first half of 2021 alone.
However, since 2020, byte Strategic Investment Department has been adjusting.
In March 2020, Yan Zhi, head of strategic investment of ByteDance, was transferred to the position of responsible for the game business, and after the vacancy of April, Zhu Jun Alex, the former product leader of TikTok, served as vice president of ByteDance products and strategy, responsible for product strategy, corporate strategy and investment. Since then, the strategic investment department has diverged into a financial investment department, which is headed by Yang Jie, who was the vice president of Sequoia Capital, and the person in charge of Byte Strategic Investment is Zhao Pengyuan, and Yang Jie Zhao Pengyuan and the two jointly report to Zhu Jun Alex, the head of ByteDance investment.
During the dynamic adjustment period, byte's investment remained at high speed. According to the data of Tianyancha, since 2014, Byte has invested more than 130 projects, and in the one-year period from July 2020 to August 2021, more than 60 investments have been made, accounting for nearly half, and large-scale investments have continued.
Byte's foreign institutional investment and industry average investment comparison chart in the past 7 years
Byte's foreign investment has also become 5, namely Beijing Quantum Leap Technology Co., Ltd., Beijing Nebulas Chuangxing Technology Co., Ltd., Today's Toutiao Co., Ltd., Beijing Shining Star Technology Co., Ltd., and Beijing ByteDance Technology Co., Ltd., which have a clear division of labor and manage different investment projects.
The investment in the new consumption track is mainly carried out by Beijing Quantum Yuedong Technology Co., Ltd., and some other important new businesses will be found by the Byte War Investment Department to find suitable companies, and then the above will decide whether to acquire or invest.
It is worth noting that these enterprises "favored" by the War Investment Department will not be invested by Byte or affiliated companies immediately after investment or mergers and acquisitions, but will maintain an independent state of operation for a long time, and if necessary, byte will complete their direct control.
In addition, the Byte War Investment Department will also "quietly" set up some new companies to help Byte test the waters of new business, and these new companies will not have anything to do with Byte from the perspective of equity. For example, the internal incubation business of Byte like "Fei Chat" was carried out by Chengdu Bushuhu Technology Co., Ltd., which was quietly established by Byte in 2018, and was not acquired by Byte until June 2019 to complete the equity change.
These practices are also common in other Internet manufacturers, and similar operations can effectively protect the new business in byte incubation from too much attention and interference from the outside world.
Internet giant venture capital circle "sweeping goods" or into history
The Strategic Investment Department of Chinese Internet Companies is a small but sophisticated department. When Tencent had more than 50,000 people, its investment department only had more than 50 people, and ByteDance, which had more than 100,000 people, had its investment team of more than 100 people.
The head of the war investment department is often the most core executive of the Internet company, such as Tsai Chongxin, who once ran the ali war investment department, is a permanent partner of Alibaba Group; the Martin Lau who manages tencent investment department is the second person in Tencent after Ma Huateng, and all Tencent executives have to report to the former Goldman Sachs banker who joined Tencent in 2005; Chen Shaohui, who is in charge of the meituan war investment business, is the key mr. of the merger of meituan and Dianping; Zhu Jingshi, who is in charge of the didi war investment business, is the board of directors except For Cheng Wei. The only Didi person besides Liu Qing.
These small and sophisticated troops make up the most important force in China's venture capital circle, and they are one of the most important sources of funding for the venture capital market. 2018 is the most intensive investment time for Ali and Tencent, in the first half of that year, according to 36Kr statistics, China's Internet investment overlords Ali and Tencent invested 100 billion yuan and 120 billion yuan respectively, according to the data of Zero2IPO Research Center's private placement, the number of investment cases in China's equity investment market in the first half of 2018 reached 5024, involving a total investment amount of 579.502 billion yuan.
According to this calculation, in terms of investment amount alone (excluding part of overseas investment), Ali and Tencent alone account for no less than 30% of the share.
Since the beginning of 2019, the number and total amount of investments on both sides have declined, but it is still not negligible. In the past 2021, Tencent's investment amount exceeded 130 billion yuan, which is twice the investment amount of China's top VC Sequoia. In terms of the number of investments, Tencent is only this compared to Sequoia, and the frequency of shots between the two sides is only 57, but the difference in the frequency of shots between Jingwei Venture Capital and Tencent, which is more than 100, can be described as a fault-type lead.
Internet companies have also reaped excess returns as a result. In 2020 alone, Tencent's investment was close to $17 billion. According to the latest report of foreign media The Information, Tencent obtained a total of $120 billion (equivalent to 781.67 billion yuan) of unrealized income in 2020 through holding minority stakes in about 100 listed companies, about 6 times its estimated profit in 2020.
Internet giants such as Tencent, Ali, Byte, and Meituan are the ceiling for almost all entrepreneurs, and they always inevitably ask a question - if Tencent, Ali, and Byte do this business, what should you do? This is a question that will never have a perfect answer. Many entrepreneurs have hoped to become or even surpass BAT in the past, but in the end only a few companies such as ByteDance, Meituan, and Didi ran out.
There are even some unwritten rules circulating in the venture capital circle: do not do business that is highly related to the main business of the big factory, or do the business that is highly related to the big factory, but because of the low rate of return, the big factory is not willing to personally do the business, and finally sell it to the big factory.
Industry insiders predict that ByteDance's war investment adjustment may only be the beginning, Ali, Tencent, Meituan, JD.com, etc., including a series of Internet manufacturers' strategic investment departments, may face the choice of where to go next.
For some investment institutions, selling the entrepreneurial projects they invest in to Internet companies is one of the channels for them to exit. For example, in the story of Ofo, in addition to Zhu Xiaohu making money, investors almost all planted their heads. Zhu Xiaohu's approach at that time was to sell shares to Ali + Ant, which urgently needed to pay for the entrance, at a premium of 20% in the latest round of valuation (equivalent to 3.4 billion US dollars).
Many people in the industry have quipped that the financing rounds in the domestic market can be roughly divided into: seed round, angel round, Pre-A round, A round, A+ round, B round, C round, BAT round, Pre-IPO round and IPO round.
The way venture capital institutions withdraw may be significantly affected in the future, and at the same time, Internet giants are frantically "buying, buying and buying" in the venture capital market, and "sweeping goods" everywhere may also become history.
However, one investor expressed optimism, "The receiver is gone, and the price is gone." ”
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