The three key post-80s investors behind Keep

Image source @ Visual China

Text | VCPE Reference (vcpecankao), author | Li Zixuan, Editor | Mario

On February 25, Keep officially submitted a prospectus to the Hong Kong Stock Exchange.

According to the prospectus, the average MAU of Keep in 2020 and 2021 was 29.7 million and 34.4 million, respectively, and the average number of monthly subscription members increased from 800,000 in 2019 to 3.3 million in 2021, an increase of more than 4 times.

Keep revenue consists mainly of membership subscriptions, online paid content and value-added services, private label products (i.e. consumer goods), advertising and other services.

According to the prospectus, in the first three quarters of 2019, 2020 and 2021, Keep's total revenue was 660 million yuan, 1.11 billion yuan and 1.16 billion yuan, respectively. In 2019 and 2020, Keep's adjusted net loss was $366 million and $106 million, respectively, and for the nine months ended September 30, 2021, the adjusted net loss was $696 million.

Born in 2015, Keep grew and raised almost everything smoothly in the early days. There's strength and luck.

Before founding Keep, Wang Ning interned in many companies such as Ape Counseling, and did manpower, finance, operations, products, testing, etc., with experience in the Internet and education industries, and had a short entrepreneurial experience.

Knowledge of fitness needs, Internet products, and the market is where its success lies, and it also takes good fortune to meet investors who understand Keep.

Founder Wang Ning was born in 1990 and was only 24 years old when he founded Keep. After Keep went online, it successively got the investment of several key investors in the A round, B round and C round, BAI partner Wang Tianfan, GGV partner Li Haojun, and Wuyuan Capital partner Yuan Ye. They were all post-80s newcomers in the investment circle at that time, and the youngest Wang Tianfan was only one year older than Wang Ning.

Fitness is a trend for young people, keep is a business for young people. Young people do young things, and in the face of this new project, a tacit understanding arises between young investors and entrepreneurs.

Wang Ning recalled that the Keep financing process was smooth and even pleasant, "We did not take the initiative to go to the market to find, completely like-minded investors found us, and in the process of talking, there were common values and ideals." These three institutions also chased all the way, accompanied by the listing of Keep.

Now that all three investors have been promoted from newcomers in the investment circle at that time to institutional partners to today, why did they invest in Keep in the first place, and how did they establish their own judgment ability?

BAI invested in Keep's Series A in 2015, which Wang Tianfan invested on his own initiative.

In 2014, Yu Xiangfei, the founder of MONO, a portfolio company through BAI, Wang Tianfan knew Keep. Fitness is a trend of urban youth lifestyle, Wang Tianfan believes that Keep cut into the needs of young people to transform themselves, while the design of the product is in line with the needs of users anytime, anywhere fitness, improve time efficiency.

Wang Tianfan's judgment of Keep is an online education product, so he believes that Wang Ning's online education experience is very plus, and among the entrepreneurs in the fitness industry, Wang Ning is the only one who has lost weight.

In Wang Tianfan's view, lowering the professional threshold of fitness is also a major product advantage of Keep. Wang Tianfan believes that Keep cuts into the needs of the majority of small white users, who are in the initial learning stage from 0 to 1 for fitness, and most need intuitive and cheap fitness education, starting from video observation, exercising in a cheap way.

Wang Tianfan recommended Keep to Long Yu, but Long Yu felt that Keep replaced the fitness personal trainer, the profit margin was limited, and the market prospect was not good, so he passed it. Fortunately, BAI has an "extreme democratic mechanism", that is, the investment rights in cases of $1 million and below are completely handed over to the investment manager, and Long Yu can not participate in voting, not participate in meetings and negotiations. Wang Tianfan invested $500,000 in Keep's Round A.

Understanding user needs is extremely important for investment product projects. At that time, Wang Tianfan invested in projects related to the lifestyle of young people, including some niche and interesting Internet products, such as the trip planning platform Miaoji Travel, the female menstrual management application aunt, LGBTQ dating community Blued and so on.

For such projects, Wang Tianfan believes that investors cannot discuss Internet concepts such as traffic conversion, customer acquisition costs, and B2B models behind closed doors, and are blinded by these BP routines. Instead, we should find ways to "ground the gas" to understand the real needs and experiences of users.

To this end, he has made his debut with two investor friends in a boy band, and filmed A MV and released a single, in order to understand the production cycle and content of the behind-the-scenes staff in the entertainment field; he also learned through friends what the real popular products in the Gay circle are, and "the experience is better than everyone knows on the market.".

Li Haojun invested in Keep in his second year of entering GGV, and he also invested in Little Red Book before that. Product-driven projects are what he's good at and what he's interested in.

Li Haojun was originally a major in electronics and microelectronics at Peking University, undergraduate hardware, graduate students to do chips, long-term immersion in the laboratory, he feels that such a life is somewhat boring and tedious, he wants to do some interesting things. Before graduation, he went to Baidu for internship and found that he had a great feeling for products and "liked to play with these things", and after graduation, Li Haojun joined Tencent as a product manager of Tencent Wireless Search Center, responsible for product design and operation.

His knowledge of Internet products also led him to an olive branch from Vertex Investments, where he entered the investment industry, where he led and participated in early-stage project investments in multiple TMT areas.

As a former product manager, starting from user needs and experience has become Li Haojun's thinking habit. Li Haojun said that I believe very much in the saying that for user needs, we are always discoverers, not creators, in other words, "THE CEO is the user of his own products."

Therefore, when Li Haojun first met Wang Ning, he was impressed by two aspects, one is that the product was recommended by apple's App Store just after it was launched, and the other is Wang Ning's original intention of doing Keep - he did not find a good product in the process of losing weight, so he decided that this thing was worth doing.

The contact was in the Spring Festival of 2015, GGV did not decide to invest at that time, and the final final investment intention was Li Hongwei, the managing partner of GGV. Li Haojun was vice president of investment at the time and a major player.

Young people's consumption upgrade and lifestyle has always been a very important investment area of GGV, Li Haojun went to Shanghai universities to do research, through chat with high school students and college students, he learned that among the main expenses of young people, health and fitness rank second. Based on this, the GGV team judged that a healthy lifestyle already had a trend investment opportunity, and looked for targets in the vertical sports field.

Keep was chosen, on the one hand, because Wang Ning himself had weight loss experience, and he knew where the user's pain points were; on the other hand, because Wang Ning had also been a product manager, paying attention to product details, as small as video style, background music, etc., he knew how to design.

However, GGV's initial judgment of Keep was not online education, but fitness social products. Keep's social attributes are a plus for the product, in Li Haojun's view, Keep combines mobile social attributes and tool attributes to increase the user stickiness of the product, and the social sharing attributes have also brought it a high-speed and sustained growth dividend.

In July 2015, Li Hongwei and Wang Ning chatted on the phone for two hours, and the next day they flew to Beijing to meet Wang Ning, and the two sides also agreed on the future development of the product, so the investment intention was determined on the same day. Li Haojun became a member of Keep's board of directors. Since then, Keep has had GGV figures in every round of investment.

Yuan Ye of Wuyuan Capital invested in Keep in the case of "stalking".

Yuan Ye lacked contacts when he first entered the investment industry, and many entrepreneurs were contacted through Weibo, and once they encountered good projects, they did not give up.

When Keep was born, the mobile Internet dividend was fading, and the public's expectations for products were higher. Yuan Ye feels that Keep's original dismantling of fitness content into short videos is a huge innovation, filling the gap in the past market and meeting the needs of many small whites.

After market research, Yuan Ye found that Keep is the best brand tone and user perception. He argues that "the reversal of anti-humanity into a healthy and positive lifestyle is achieved by companies with long-term brand value."

But at that time, Keep was not in the financing window period, Wang Ning directly rejected Yuan Ye, and Yuan Ye communicated with Wang Ning through various channels. Finally, in 2016, Five Source Capital and GGV led Keep's Series C for a total of $32 million.

Before investing in Keep, Yuan Ye had already invested in Well-known Internet products such as Kuaishou and Pulse. Among them, the pulse is also a project won by Yuan Ye's "stalking".

He met the founder Lin Fan twice, because he had already got the TS of other institutions, and Lin Fan didn't want to go every time. Yuan Ye called and stressed that "we will soon" and told him that Wuyuan Capital was interested in investing. In the end, Yuan Ye and Liu Qin went to see Lin Fan together and quickly finalized the investment.

Dedication and determination to the project comes from his understanding of the product. Yuan Ye engaged in investment because he was interested in the Internet and business, but he had no relevant experience before, and his understanding of products almost all came from the accumulation of learning after entering the investment industry.

In 2011, Yuan Ye joined Wuyuan Capital and set the investment direction for himself: all people-centered products in the context of mobile Internet.

Since then, Yuan Ye has not invested much, and has only invested in more than a dozen projects in 10 years. He spends most of his time communicating with entrepreneurs, chatting about products, making suggestions, and doing related post-investment management work.

This kind of "cultivation" is quite effective. In 2013, Yuan Ye invested in the workplace social app pulse and suggested that founder Lin Fan do real-name dynamics, because "the demand for social networking in the workplace is completely different from the demand for socialization in entertainment, and what the workplace needs is not Be Yourself, but Better Me."

Afterwards, Lin Fan commented: Yuan Ye can actually become an excellent product manager.

Product projects pay attention to human nature, testing investors' observation and sensitivity to the crowd, which is also the commonality of the above three young investors. Starting from the crowd, the needs rather than the data, is the common way of thinking they look at product projects.

But how to see is one thing, and how to understand is another. The post-90s were the main force of young users at that time, and the growth trajectory and lifestyle had something in common with the post-80s generation, in addition to research and learning, post-80s investors looked at such projects, and there was a natural age advantage.

Last year, "Generation Z" became one of the hot words in the venture capital circle, and the post-00 generation has become the "fragrant food" of today's entrepreneurs, and for many consumer and entertainment projects that have become popular, there have been investors who shout "can't understand".

No one is always young, but there are always people who are young. Resources and experience may be lacking for young investors and entrepreneurs, but acumen and courage to face change are always their strengths.

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