The first semiconductor IPO of 2022 is here.
Investment news, today (January 14), ASR Aojie Technology officially landed on the Science and Technology Innovation Board, becoming the first baseband chip. The IPO opened at 130 yuan per share, calculating the market value of 54 billion yuan.
Behind Aojie Technology is the continuous entrepreneurial story of a 66-year-old chip veteran. Founder Dai Baojia began to start a business in his early years and led Ridico to the success of nasdaq bell ringing. In 2015, Aojie Technology was officially established, rising to become a leading enterprise of wireless communication chips, and has completed at least 11 rounds of financing so far, with a luxurious VC/PE lineup. Among them, IDG Capital participated in the two ventures of the Dai Bao family, and has a deep origin.
At this point, IDG Capital harvested another chip IPO. What is less known is that IDG Capital has been in the semiconductor field for 20 years, investing in 5 semiconductor listed companies, including Zhongwei Semiconductor, Amway Semiconductor, VeriSilicon Microelectronics, Hengxuan Technology and Aojie Technology. Behind each case, there is a growth story like Aojie Technology.
The 66-year-old chip veteran started a business for the second time
A second IPO was made
Aojie Technology originates from the story of a chip veteran who has continuously started a business.
Born in 1956, Dai Baojia graduated with a master's degree from the Georgia Institute of Technology, which is one of the top polytechnic universities in the United States and is listed as one of the "three major polytechnics" alongside MIT and Caltech. Dai Baojia studied electrical engineering, the representative discipline of the school. After that, the Dai family continued his studies and obtained an MBA from the University of Chicago.
After completing his studies, Dai Baojia founded Excel Associate Sales in 1986 and officially started his career. Four years later, he joined UMAX Technologies as General Manager for eleven years. In 2001, as a co-founder, Dai Baojia founded usi, a silicon valley linear power amplifier developer, but the idea of returning to China to start a business has always haunted his mind.
At that time, the domestic RADIO frequency integrated circuit market was basically monopolized by international giants, and it was difficult to find local companies. So in 2004, the Dai family chose to return to Shanghai to establish the company. With excellent technology, Rui di Ke won the business of making "SCDMA" RF chips for Datang Group in the first year of its establishment, and the production and sales in 2006 have exceeded 2 million sets. In 2010, Ridico successfully landed on the NASDAQ.
With the continuous expansion of the smartphone market, Dai Baojiali led Rui Dike into the field of baseband chips, laying a market position in one fell swoop. For the purpose of resource integration, Tsinghua Unigroup made a takeover offer to Redico in 2013, and finally completed the acquisition for US$907 million a year later.
After the acquisition was completed, the Dai Bao family left Redico, but his exploration did not stop. In 2015, Dai Baojia resolutely founded Aojie Technology, which is committed to cellular baseband chips. At the same time, in order to catch up with the pace of world-class enterprises, Aojie Technology acquired Alphean, a Korean chip design company, at the beginning of its establishment, and obtained some of the traditional cellular baseband chip physical layer design source code and related technologies under the 2G/3G/4G standard. Then in 2016, Aojie Technology acquired Jiangsu Zhiduo Core, continuing to accelerate the accumulation of original technology.
2017 was a major turning point for Aojie Technology. This year, Marvell (Meiman Electronic Technology) decided to change hands with its mobile communications division due to its collapse in the mobile phone chip market. The division has communications technology covering 2G to 4G, and its products are adopted by mobile phones such as BlackBerry and Samsung. For Aojie Technology, this is an opportunity not to be missed, and the acquisition is finally completed. With this acquisition, Aojie Technology has become the only domestic baseband company, except HiSilicon, which has full Netcom technology, and has absorbed a top core technical team.
Today, leading Aojie Technology through the entrepreneurial road of nearly 7 years, Dai Baojia has once again ushered in the IPO bell ringing moment. The IPO opened at 130 yuan per share, calculating the market value of 54 billion yuan. After the successful IPO, Dai Baojia and Aojie Technology will start a new journey.
11 rounds of financing in 7 years
It's an unfamiliar track
This is a market of 100 billion. According to Strategy Analytics, the global baseband chip market size was $26.6 billion in 2020, with a compound growth rate of 5.45% between 2012 and 2020.
From the perspective of market pattern, at present, in the global world, the only manufacturers that can sell commercial multi-mode cellular baseband chips are Qualcomm, Samsung, HiSilicon, Intel, MediaTek, Tsinghua Unigroup and Aojie Technology.
However, like many chip companies, Aojie Technology is still in a large loss on the eve of its listing. According to the prospectus, the company's revenue from 2018 to the first half of 2021 was 115 million yuan, 398 million yuan, 1.08 billion yuan and 879 million yuan, respectively, while the net loss after deduction was 538 million yuan, 593 million yuan, 572 million yuan and 352 million yuan, respectively.
In the prospectus, Aojie Technology revealed the reasons for the continuous loss: because the cellular communication is a typical high R & D investment field, a large amount of R & D investment is needed in the early stage to achieve the commercialization of products, and the company's establishment time is still short, and a large amount of R & D investment is needed to ensure the accumulation of technology and product development.
Along the way, Aojie Technology has won the favor of many VCs/PE. According to incomplete statistics from the investment community, Aojie Technology has completed at least 11 rounds of financing since its establishment, and the VC/PE lineup is grand. According to the prospectus, the top ten shareholders include Alibaba, Shenzhen Venture Capital, Pudong Kechuang, IDG Capital, Anxin Investment, Pudong New Production and Investment, Wuyuefeng Capital and other well-known institutions.
Among them, IDG Capital has raised two consecutive rounds of financing, jointly led a $100 million B round of financing with Shenzhen Venture Capital in 2018, and followed the C round of financing in 2019. In fact, the relationship between IDG Capital and the Dai Bao family is quite deep. As early as 2007, IDG Capital participated in the investment of Rui DiKe, which was at the helm of Dai Baojia at that time, and after the establishment of Aojie Technology, it chose to continue to support his second entrepreneurship.
Dai Baojia once recalled that when IDG Capital first invested in Aojie Technology, it had reached a consensus that the project would not make money in the short term. "At that time, many investment institutions were worried that we were risky, and there were some relatively large companies competing with us at the same time. I believe that IDG Capital must have trusted me very much at that time, and it could firmly choose us under the uncertain environment. ”
Speaking of this investment, IDG Capital partner Li Xiaojun told the investment community that the reason why it was initially impressed by Aojie Technology was that the company's clear strategic positioning and seized the opportunity of localization substitution, although there were many difficulties at that time, but because the market opportunities behind it were more extensive; the second was because Aojie Technology was committed to becoming a platform-based company, with excellent technical strength, in 2G-5G cellular technology, ultra-large scale integrated circuit technology, ISP and other multimedia technologies, High-speed interface technology and other aspects have technical reserves; in the end, they have taken a fancy to this mature and super combat team.
"The Dai Bao family is a particularly entrepreneurial person who has invested a lot of energy and money in entrepreneurship. At the same time, he is also a dynamic entrepreneur, after all, he is no longer young when he founded Aojie Technology, but every time he meets, no matter what difficulties he encounters, he always looks full of energy. Li Xiaojun recalled.
Immersed in the layout for 20 years, harvested 5 listed companies
IDG Capital Semiconductor Investment Map
At this point, IDG Capital's semiconductor investment territory has been expanded.
IDG Capital's earliest investment in semiconductors dates back to 1994. It was the second year that IDG Capital launched its investment business, and China's integrated circuit industry resolution caught up, and IDG Capital invested in Fenghua Hi-Tech in the direction of advanced manufacturing in that year. In 1996, Fenghua Hi-Tech was listed, becoming the first listed project won by IDG Capital.
This is the beginning of investment in semiconductors. After the millennium, the country's determination to vigorously develop the semiconductor field has become firmer, but the reality is more difficult than expected, and problems such as poor independent innovation ability, scarcity of talents, weak foundation, and insufficient funds still exist, so some VCs/PE are determined to invest in the chip industry. As a result, IDG Capital ushered in the first wave of semiconductor investment climax.
Since 2003, IDG Capital began to systematically lay out the semiconductor field, and since then, in the past 20 years, the investment tentacles have been laid out in semiconductor equipment, sensors, chip design, design services and other fields, frequently selling head projects, and more than half of the companies have been or will be listed.
It was during this period that The Core Original invested. In 2003, IDG Capital participated in the A round of financing of VeriSilicon shares, which was also the first round of financing of VeriSilicon shares, and in August last year, VeriSilicon successfully listed on the Science and Technology Innovation Board.
For example, in 2005, IDG Capital invested in Amlogic, a leading TV and set-top box integrated chip company in the industry, and 14 years later, Jingcheng co., Ltd. was listed under the name of the first proposed company accepted by the Science and Technology Innovation Board, No. 001 of the Science and Technology Innovation Board.
In this process, semiconductor investment has experienced a long period of undervaluation. With the rise of the Internet and mobile Internet, semiconductors were once "abandoned" by VC/PE. At first, there were many investment institutions that plunged into the chip industry, but they quickly left the market, and finally they could stick to it, "adding up to a hand that can be counted.". During this period, IDG Capital always has a team following up on semiconductors - good entrepreneurs and good projects, and they will not be missed because of the industry heat or not.
Representative cases emerge one by one. For example, in 2007, IDG Capital took the lead in investing in The global leading communications chip company, Rydico. And in 2015, they invested in Hengxuan Technology, the hidden champion of AIoT chips. Hengxuan Technology is a typical second-generation entrepreneur in China's chip industry, before founding Hengxuan Technology, Zhang Liang worked in a number of well-known semiconductor companies. Since then, Li Xiaojun has become a founding investor of Hengxuan Technology. In December 2020, Hengxuan Technology officially landed on the Science and Technology Innovation Board.
In the past few years, when the semiconductor investment boom has made a comeback, IDG Capital, which has been working hard for nearly 20 years, has already begun to enter the harvest period, and has successively harvested a number of IPOs - Zhongwei Semiconductor, Amlogic Semiconductor, VeriSilicon Microelectronics, Hengxuan Technology, Aojie Technology, Yitang Semiconductor has also submitted an application for listing on the Science and Technology Innovation Board, and more chip IPOs are coming.
Long-term optimism, short-term caution
China must have given birth to a world-class chip company
This is undoubtedly an industry that requires absolute patience to see a return.
Usually, it takes 3-4 years for a semiconductor company to go from being invested to really making a living. This is a stage that must be crossed, because only when semiconductor companies reach large-scale revenue does it mean that the product can really stand, and there are more levels to pass. In this process, the long-term companionship of capital shows value.
This is vividly reflected in IDG Capital's investment in VeriSilicon shares. In 2003, when domestic investment institutions rarely got involved in the chip industry, IDG Capital offered the first round of financing for chip design company VeriSilicon shares, until August 2020, VeriSilicon successfully listed on the Sci-Tech Innovation Board. Yu Xinhua, a partner at IDG Capital, once said with a smile: "From the investment in 2003 to the listing in 2020, nearly 18 years, the children have also gone to college. ”
According to statistics, nearly 70% of the chip projects invested by IDG are A rounds and A rounds before the game, and have long-term support so far.
IDG's long-term companionship is also reflected in the continuous support for entrepreneurs. Here is a past story: after investing in Ruidike, IDG Capital formed a deep friendship with several founders, and then Dai Baojia founded Aojie, Zhang Liang founded Hengxuan, Wei Shuran founded AGCO, IDG Capital chose to continue to support, and now two of them have been listed.
In Li Xiaojun's view, investment in chips needs to follow three lines. The first is to meet good entrepreneurs, we must be decisive, because excellent entrepreneurs have always been scarce resources; the second is to take the industry as the index, focusing on subdivided industries with large market space and stronger domestic substitution needs; the third is to pay attention to technological innovation, believing that scientific and technological innovation will bring longer-term value to society.
Talking about the current market heat is getting hotter, Li Xiaojun said that when the market becomes hot, it is normal for investment institutions to spend more energy on attention, which also allows chip projects to have more opportunities to exit.
In fact, China's semiconductor industry today is still relatively early, has not really reached the growth stage, and many companies still have a big gap with world-class companies. But fortunately, the Chinese market has sufficient talent, structural opportunities, and opportunities in the industrial chain.
Yu Xinhua, who has been deeply involved in the field of chip manufacturing for more than ten years, analyzed one of the advantages of China's semiconductor industry: the engineer dividend. At the beginning of the 21st century, overseas advanced semiconductor companies began to build R&D bases in China, and China slowly had semiconductor-related talents, although 95% of the companies in the wave of entrepreneurship ended in failure, but it is important to upgrade the level of talents. Today, slightly complex chips are jointly designed and developed by hundreds or even thousands of people, and China has a large number of engineering talents and technical education systems, and a strong talent echelon has been formed.
Looking back on the past, Li Xiaojun believes that the entire semiconductor investment needs long-term optimism and short-term caution: "This must not be a sprint behavior, and now who runs in front is a very temporary leader, and the real runway is too long." ”
He reminded that semiconductor companies are to B behavior model, the purchaser for the supply of understanding is very strong, very high requirements, for the price has its own appeal, as long as the company to meet the requirements of customers, will be seen: "You don't have to worry, product positioning, technology through the good company, the probability of success today is very large." ”
At present, VC/PE has ushered in many fierce competitors, such as Huawei's Hubble Investment, Xiaomi, Ningde Times, BYD and other industrial capitals are attacking the city in the semiconductor field. Yu Xinhua said frankly that industrial investors and financial investors have their own emphases, "IDG hopes that the invested companies can become comprehensive and competitive enterprises in the world." Because China's biggest challenge is cutting-edge technology such as chips, which will eventually face global competition. ”
With the unprecedented liveliness of domestic semiconductor investment and the soaring valuation, the project is becoming more and more expensive. In this regard, Yu Xinhua believes that expensive and not expensive are relative, "if you blindly follow in the industry, without their own judgment, then 1 billion is expensive, 50 million, 30 million is also expensive, the most important thing is to understand or not."
If China wants to truly become a chip power, it is bound to face global competition in technology. Who can become China's NVIDIA, Broadcom, Qualcomm? It took 20 years to see the difference. Until then, everyone who is serious about doing things has a chance.
The investment community combed and found that idG Capital has appeared behind many well-known chip companies, in addition to Aojie Technology, it also includes Zhongwei Semiconductor, Hengxuan Technology, Jingchen Semiconductor, Core Yuan Microelectronics, Yitang Semiconductor, Biling Technology, Yi Siwei, Wan Gao Technology, AGCO Micro, Horizon, Kunlun Core and so on. Today, this long list is growing.