Text | VCPE Reference, author | Li Zixuan, Editor | Li Youran
IDG partner Niu Kuiguang successfully quit a unicorn in a corporate service track.
Recently, Beijing Yidong Chuangxiang Technology Co., Ltd. (hereinafter referred to as "Chuangsheng Sales") has undergone industrial and commercial changes, including Niu Kuiguang, who have withdrawn from the board of directors of Chuangxiang Andshare, no longer serve as directors or supervisors, and also withdraw from the ranks of shareholders.
However, Niu Kuiguang did not completely disassociate himself from the various sales customers.
The equity penetration chart of Qichacha shows that Niu Kuiguang holds 29.55% of the shares of Zhuhai Enron and Zhuhai Yingran respectively through Harmony Haoshu and AiqiHuide, and the latter two companies hold 6.7969% and 3.3824% of the shares of Xiangxiang sales respectively.
After participating in the Series A investment, he helped the founding team develop strategies together and participated in almost every round of financing in the company's later stages. In May last year, the valuation of the F-round financing reached 11 billion yuan, and the valuation rose hundreds of times in ten years.
However, Niu Kuiguang's confidence and expectation for the sharing of customers is far more than this, he once publicly said, "the sharing of customers is a hundred times the return of the start, I hope to have the opportunity to achieve a thousand times the return."
Corporate services have always been the direction of Niu Kuiguang' expertise, and he entered IDG Capital in 2007, investing in companies including SenseTime (0020. HK), Jinshan Yun (KC.US), QianXin (688561. SH) and other listed companies, as well as well-known enterprises such as Pulse, Diversified Customers, Cool Jiale, Teambition, Tongdun Technology, and Steel Mesh, many of which have increased their valuations by hundreds of times compared with the investment. These companies all have one thing in common – they all have TO B.
He has also been involved in 2C fields such as health, O2O and e-commerce, but his investment is not outstanding. It is not difficult to see that logic, technology and experience in dealing with enterprises are his strengths.
However, at the beginning of entering IDG, Niu Kuiguang did not invest in a project for three consecutive years, so the 2B entrepreneurial boom after 2010 has a special significance of creating heroes in the times for him.
01 Quick shot, heavy bet
Enterprise services are Niu Kuiguang's best investment area, and most of the shots are before the C round. Although this period was risky, the investment results proved his strength.
He is quick and determined about his favorite projects, and can make quick decisions even when placing heavy bets.
In SenseTime's angel round of financing, Niu Kuiguang gave an investment amount of tens of millions of DOLLARs, which is the highest angel round investment among the "AI Four Little Dragons". Megvii Technology and Yitu Technology Angel Round raised only a few million yuan, and Cloud received 60 million yuan from the Technology Angel Round.
In fact, before the investment, Niu Kuiguang has been in contact with many technology-based companies in the enterprise service field where SenseTime is located, such as security dogs that provide cloud security solutions, intelligent analysis and decision-making service provider Tongdun Technology, etc., and summarized several investment criteria for technology companies: 1. Can technology be industrialized; 2. Is the team the best team in the industry; 3. If the technology can be industrialized, how big a market size will be formed?
In 2014, SenseTime founder Tang Xiaoou and his team released a research result: the accuracy rate of the original face recognition algorithm reached 98.52%, exceeding the accuracy rate of the human eye recognition ability by 97.53% for the first time - this data was once considered to be the insurmountable ceiling of the algorithm.
Niu Kuiguang thought that this was an important signal that it meant that computer vision technology could be commercialized, so he immediately got up and flew to Hong Kong to visit Tang Xiaoou.
Niu Kuiguang looked at more than a dozen demos made by Professor Tang's team in the laboratory and learned that in the past three years, 14 of the 29 deep learning papers in the world have been published by the SenseTime team. Niu Kuiguang judged that "this team should be the strongest team that can be found in China in this field, even in the top five in the world", and then decided to invest and gave a valuation of 200 million US dollars (about 1.264 billion yuan).
There was controversy within IDG about SenseTime's high valuation at the time, but there was general optimism about the technology's prospects. In the end, the investment was finalized.
At the end of 2021, SenseTime (0020.HK) went public, with a maximum market capitalization of HK$157.8 billion (about RMB127.5 billion) on the first day, more than 100 times higher than the valuation given by angel IDG.
According to Chuangbang reports, the return on investment of SenseTime in the first round can reach more than 20 times, and the return on investment of investors in the later period is decreasing. IdG is without a doubt the biggest institutional winner in this project.
In addition, Niu Kuiguang also invested heavily in Pulse.
LinkedIn, an American workplace social networking company, has always been his "ideal" project, and he has visited this company to communicate and feel that their model is very good, but no similar products have been found in China.
In 2013, as soon as the Pulse App was launched, Niu Kuiguang felt that his eyes were bright.
Pulse started from the mobile terminal and fits the workplace culture of Chinese - people-to-people relationships based on mobile phone numbers, and "second-degree networking" relationships derived from offline acquaintance relationships - friends of friends, etc.
Niu Kuiguang believes that "[the user] is really using your product, which is very important."
In terms of platform data, Niu Kuiguang cares more about user stickiness than the number of users. At that time, although there were only 800,000 registered users of Pulse, Pulse's user stickiness and feedback were very good.
At that time, the pulse was not in the financing window, the founder Lin Fan revealed to him that he planned to do 20 million US dollars in the next round, Niu Kuiguang simply said "I do it now, do you want it?" In the end, IDG invested in Pulse at a valuation of US$100 million.
Combined with the number of users at the time, the single user value was $125. And this year's listed Momo, the total registered users of 180.3 million, the valuation of about 3 billion US dollars, the value of a single user of about 16.7 US dollars; according to industry insiders, WeChat's valuation at that time was about 70 billion US dollars, combined with its about 700 million users, the value of a single user is only about 100 US dollars. It can be seen that the premium of chakra B is very high.
02 Consultants who don't understand entrepreneurs are not good investors
Xiong Weiming, a partner of Huachuang Capital who has worked with Niu Kuiguang, commented that the former "has a serious entrepreneur coaching personality".
This is fully confirmed by the investment of various customers.
In 2012, Niu Kuiguang discovered that mobile CRM service providers were selling customers. Although the founder Luo Xu has no experience in the software industry, Niu Kuiguang chatted with the founder Luo Xu and found that the latter has more than ten years of market sales experience, has a deep understanding of user needs and applications, and everything is oriented to solving practical problems, not just for the sake of entrepreneurship.
Niu Kuiguang invested millions of dollars in the A round, with a post-investment valuation of 15 million US dollars (about 95 million yuan), and since then, almost every round of financing IDG has participated.
Luo Xu has accumulated a lot of resources for large enterprise contacts before, and the unit price of large enterprises is very high, but when purchasing products, it often requires customization, and he is not sure whether to take large enterprises as the main customers.
After discussing with him, Niu Kuiguang firmly told him that he must be a small and medium-sized enterprise, otherwise he will fall into the quagmire of customization and slow down the development of the company. So Luo Xu clearly only do small and medium-sized enterprises and standardized products, such an advantage is that the speed of promotion and replication is very fast, and the requirements for employees are not high, which can save talent costs.
Niu Kuiguang believes that the speed of doing SME software is the fastest, because their decision-making process is simpler, and it will be easier to do medium and large enterprises after serving SMEs, and vice versa.
03 Time makes heroes
Niu Kuiguang's knowledge and experience of corporate strategy stems from his past work experience.
After graduation, Niu Kuiguang worked at McKinsey & Company, where he participated in strategic consulting for a number of Fortune 500 companies, such as strategy formulation, market entry, operation management improvement and government relations. Not only do we understand the market needs of large and small enterprises, but also have rich experience in assisting start-ups to formulate strategies and improve management efficiency.
In addition, Niu Kuiguang graduated from the Department of Computer Science at Tsinghua University, making it easier to understand the various technologies required for corporate services. Therefore, the track of enterprise services is like tailor-made for it. And almost all of his best investments are 2B.
But today's big guys used to have a dark time.
In the first three years of entering IDG, Niu Kuiguang did not invest in a single project, until the second three years, encountering the rise of the domestic 2B market, he gradually emerged.
In 2011, IDG found that after a systematic survey, there were two underlying drivers of the 2B market in China: one was that labor costs were rising and continued to grow at a rate of up to 13% per year for seven or eight years; second, the rise of mobile terminals, data storage in the cloud, and the past piracy was now impossible.
So IDG set up a corporate service team, and Niu Kuiguang was one of them. He began to delve deeper into this area. In order to straighten out the investment logic of corporate services, there has not been a weekend off for three consecutive years.
It turns out that this is the area where he can display his talents.
From 2012 to 2013, he successively invested in projects such as Happy Sales, Cool House, and Tongdun Technology. Among them, Cool Jiale has submitted a prospectus to the US Securities and Exchange Commission (SEC) last year, and later reported the news of switching to Hong Kong stocks. At the end of last year, Cool House completed a $200 million (about 1.274 billion yuan) Pre-IPO financing.
With the continuous deepening of the 2B field, Niu Kuiguang's research direction has also expanded to the cutting-edge technology fields such as cloud computing, big data and artificial intelligence, and later invested in high-quality projects such as Kingsoft Cloud and SenseTime.
Niu Kuiguang's colleagues and his CEOs like to call him "Old Cow", and Xiong Weiming, a partner at Huachuang Capital, once commented on him, "Old Cow is very rigorous, logical and clear, let him stumble on a thing, it will definitely work", but talking about things is "right is right, wrong is wrong, confused can't pass".
Niu Kuiguang's more authentic personality has been fully exerted in the 2B field, and the "old cow" has not been disappointed in years of hard work.