After seven years of development, the "byte system" that first appeared in the silhouette may still be stillborn.
According to 36Kr, ByteDance will lay off the investment business as a whole, involving nearly 100 employees, of which Zhao Pengyuan, the head of strategic investment, and some employees of the war investment section may give up the investment business and merge into the strategic business, and the financial investment section will be completely dissolved.
The relevant person in charge of ByteDance responded to this, "The company conducted an inventory and analysis of the business at the beginning of the year, decided to strengthen business focus, reduce 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. ”
Since the establishment of ByteDance, the number of foreign investments has been about 200, and the overall removal of investment business has not yet hurt the bones. For many established Internet companies, investment has long become an important engine to promote growth, and once it is divested, it is bound to have a huge impact on the company's future layout.
These Internet giants will have to face a problem: when the investment lights up the yellow light and presses the brakes, where should the passengers in the car go?
Especially for leading Internet companies such as Tencent and Ali, the situation in the face of this problem is obviously more difficult. After years of operation, the "Tencent System" and "Ali System" have formed entangled network links, and many of its companies are deeply coordinated, involving the whole body.
Before Byte's investment business was withdrawn, other big manufacturers had already made moves: in September 2021, Ali withdrew from Mango Super Media; in December, Tencent distributed a large number of JD.com shares to shareholders to reduce its holdings in JD.com.
In addition, the Qicha App shows that recently, Li Zhaohui, managing partner of Tencent Investment and vice president of Tencent Group, has successively withdrawn from the position of legal representative or chairman of a number of Tencent affiliated companies.
In the previous article "Tencent's Big Turn", the alphabet list believes that with Tencent's reduction of JD.com as the dividing line, the trend of expansion and alliance of Internet manufacturers will be reversed, and this byte layoff investment business also confirms this trend.
A series of actions by the big factories indicate that the "system-making" movement of the Internet industry in the past decade or will come to an end.
A
In terms of investment business, ByteDance can only be regarded as a "rising star". Before ByteDance became known to the public, established Internet giants such as BAT had become active investors in the primary market.
As one of the initiators of the Internet "system-making movement", Tencent's foreign investment began in 2005, but in the following five years, there were only a few sporadic investments per year, and basically all of them were invested in game companies.
Ali's involvement in outbound investment predates Tencent. In 2000, Ali invested in Haier Zhijia, Haier's smart home appliance brand. However, after 7 years, Ali invested again.
Compared with Tencent Ali, Baidu's foreign investment started the latest and its sense of existence is lower.
Baidu began to invest abroad in 2007, and the total number of shots per year is not much, and the style is more rigorous. 2011-2015 is the Baidu investment exploration period, following the market trend to invest in a number of O2O projects, such as Glumi Network, No. 1 special car, Anjuke; 2015-2017 is Baidu investment adjustment period; after 2018, with the company's strategic adjustment, Baidu investment focus began to focus on AI, driverless direction, such as small fish at home, Apollo Zhixing.
Before 2010, BAT was only a small player in the capital market, and after 2010, BAT's investment territory began to expand.
Ma Huateng, Ma Yun and Robin Li
This year's "3Q war" became a major turning point in Tencent's history, which made Tencent think about how to improve its openness from top to bottom.
After a series of diagnostic meetings and internal discussions, Tencent President, former Goldman Sachs Martin Lau proposed two strategic weapons to Ma Huateng: capital and traffic. Martin Lau helped prepare for Tencent's listing in 2004 and joined Tencent in 2005 as Chief Strategic Investment Officer (CSO).
In the view of the former Goldman Sachs, Tencent cannot get involved in all Internet products, especially in the content field, and the participation of capital is the only feasible path. Through the capital formation alliance, Tencent can not only achieve the purpose of opening up, but also enable its huge traffic resources to obtain the value release in the sense of capital.
Since 2011, Tencent has changed its previous investment strategy and begun to use capital means to achieve alliance-style opening-up, and the rise of WeChat has allowed Martin Lau to hold a bargaining chip with all Internet companies that are eager for traffic.
According to the data of enterprise investigation, the total number of investment incidents invested by Tencent is currently 1212. From 2011 to 2021, Tencent's annual investment volume increased from 16 to 258.
Tencent's most important investments are also concentrated during this period. From 2008 to 2015, Tencent invested in and eventually acquired the company; in 2013, Tencent invested $448 million in Sogou; in 2014, Tencent successively invested in Dianping, JD.com...
Ma huateng is a fan of evolution and the theory of runaway. Faced with external uncertainty, he tried to make Tencent an ecological organization with blurred boundaries, and proposed the concepts of "connecting everything" and "Internet +" around 2013.
Alibaba, another fast-expanding Internet giant, sees its mission as "to make it easy for the world to do business." Soon, Tencent, which wants to "connect everything", and Ali, who has set its sights on the world, meet in the frontal battlefield.
Through investment, Tencent has cut into many fields such as e-commerce, local life, and travel, and launched a long and fierce investment competition with Alibaba. In this duopoly-like battle of preparedness, they each built walls and dug out a moat. In the words of Ma Huateng, "to contain or suppress the excessive approximation of the opponent." ”
In the field of local life, Tencent supports Dianping, Ali supports Meituan, this competition ends with Ali withdrawing from Meituan, Tencent contributing to the merger of Meituan Dianping; in the field of travel, Didi and Mobike are backed by Tencent, fast and ofo are backed by Ali, and the war is burning from four-wheelers to two-wheelers; and in Ali's hinterland e-commerce field, Tencent has successively invested in JD.com and Pinduoduo, and the competition has never stopped.
In several "big wars", the two companies have won and lost each other, and there are debates about the advantages and disadvantages of the investment models of the two companies.
Alibaba's investment strategy began to mature around 2008, with greater emphasis on the strategic synergy of the invested projects. A typical model is "piloting in the early minority equity, and promoting synergy in the overall merger and acquisition in the later stage", such as UC, Ele.me, and Damai.com, all of which were first invested by Ali as a minority investment, and then acquired as a whole.
After the pilot, if the strategic synergy effect with the main business is significant, and can see the greater development value of the follow-up, Ali will try to launch mergers and acquisitions. At the same time, in order to achieve investment expectations, Ali often signs performance betting agreements with the acquired projects to prevent the founders from leaving their hands.
Cai Chongxin once compared Ali's investment logic to Go, "We are putting the right assets in the right position, strategic investment and mergers and acquisitions are part of winning Go, to establish long-term strategic value for Ali." ”
In terms of the image of foreign investment, Ali emphasizes control more, while Tencent does not seek control. These two different investment styles have largely shaped the landscape of today's Internet industry.
B
Compared with the big factories in the same period, JD.com is a novice in investment, and it only began to get involved in foreign investment in 2013. In 2015, JD.com's investment surged, from 9 in 2014 to 67, mainly due to the abundance of personnel and funds.
In March 2014, after Tencent's strategic investment in JD.com, JD.com's war investment department introduced a number of executives and related personnel from Tencent, and with the listing of the US stock market in May of that year, JD.com received a large amount of funds to support its foreign investment. Since then, JD.com has begun to follow Tencent to participate in a series of large-scale projects in the later stage, including Ele.me, Yiche, Yixin Group, Buying and Selling Bao, Weilai Automobile and so on.
The "back wave" of the rise of the mobile Internet era is faster in the investment field, and Xiaomi, ByteDance and B station are among the representatives. According to statistics, the Internet companies founded after 2011 began to lay out investment business after an average of 2 years of establishment, while traditional companies would start to invest in the layout after an average of 14 years of establishment.
This is not difficult to understand. After 2011, BAT's investment model matured and there were more and more investment cases, in this environment, new Internet companies were exposed to VCs as soon as they were born, and they were eager to invest soon after their establishment. According to statistics, half of China's 300 unicorns in 2018 were related to BAT, and many investors who are now active, such as Meituan and Station B, were once investment objects of BAT.
Xiaomi founder Lei Jun himself is an angel investor, Xiaomi at the beginning of its establishment with investment genes - in 2011 Xiaomi invested in car consumption of kaka mobile, 2014 ~ 2021, Xiaomi has been an active investor.
ByteDance began to get involved in investment in 2015, and invested 10 in that year, and in the following years, the frequency of Byte's foreign investment was basically maintained at this level. However, from 2019 to now, the growth rate of byte's outbound investment has remained at 50% for two consecutive years.
ByteDance is good at using investment acquisitions to supplement the team's genes, a typical example is that after investing in Jike big data and AIKID, Byte tried to do its own education. For Byte, the biggest significance of the acquisition is the talent team, not the product or traffic.
The investment debut of Station B is a dark action mobile game company (hippie game) invested in 2013. Around investment, Station B has a clear set of playing methods - focusing on the fields of pan-entertainment and games. From the investment objects of Station B in recent years, it can also be seen that grasping the cultural content that young communities like is the core logic of its investment.
C
With the increase of investment events and investment scale, the investment of Internet manufacturers has gradually formed a variety of styles.
Tencent as the representative of the large factories tend to "passive investment", not excessive pursuit of business synergy, more to seek financial returns; JD.com, Xiaomi and other companies prefer "supplementary investment", the invested company and the parent company does not have a close business relationship, but can help the parent company to build a business ecology, stimulate market demand, consolidate market position; Ali, Meituan, B station tend to "drive investment", pay attention to the investment company and the parent company's current strategy and business of the close connection.
After more than 20 years of development, investment business has become an important part of the territory of Internet manufacturers. According to Tencent's 2020 annual report, the total investment assets of joint ventures and associated companies reached 315.258 billion yuan, accounting for 29.76% of the total assets.
In the eyes of some industry observers, the establishment of a war investment department and extensive foreign investment have become one of the thresholds for whether an Internet company can be called a "big factory". Because only when the company starts to re-operate, has spare money, and has business expansion needs, the investment department can come in handy.
With the expansion of the territory of large factories, investment has become more and more "heavy", and the most obvious change is the number of investment rounds. Around 2011, nearly 70% of the investment of Internet manufacturers was an early project before the B round; by 2021, strategic investment has accounted for nearly half.
From the perspective of investment motivation, the investment strategy of Internet manufacturers is divided into financial-oriented and strategic-oriented. But even Tencent, which is recognized as pursuing a financial orientation, has rarely heard of successful investment setbacks, and investment profits have almost never been cashed in, only in financial statements.
Now, that is reversing. When the rising stars such as Station B were busy building their own walls and moats, Tencent and Ali, the initiators of the system-building movement, did the opposite and began to take the initiative to demolish the wall.
In the past two years, Ali has successively withdrawn from a number of media, including Mango Super Media. On January 10, 2022, Daniel Zhang announced its withdrawal from Weibo's board of directors.
In December last year, Tencent reduced its holdings in JD.com by paying dividends, which was interpreted by the industry as Tencent's response to anti-monopoly trends. If this speculation is true, Pinduoduo, Meituan, Didi, and Kuaishou all have the potential to become the next Tencent reduction target.
The company's investment strategy is not static, and the situation before and after investment is also changing at any time, its essence is through investment, mergers and acquisitions, to maximize their own advantages, in their own field to maintain a leading edge.
In fact, while Tencent and Ali cut off from past investment companies, they have not stopped investing, but their eyes have turned more to the To B field and begun to lay out in the industrial Internet.
At present, Tencent and Ali are still the leaders of domestic Internet companies in the investment business, but with the turn of the big factory, the "Tencent system" and "Ali system" will gradually become history.
Resources:
"Tencent Big Rudder" alphabet list
"Tencent VS Ali Investment Full Comparison" late LatePost
"Tencent Ten Years of Investment" Sunday Finance
"2021 China CVC Investment and M&A Report" IT Orange
Tencent 2020 Annual Financial Report
"Tencent Biography" Wu Xiaobo