"In the six years since its establishment, Lenovo Venture Capital has invested in 200 innovative technology companies and 11 IPOs, and in the past year alone, more than 70 invested companies have received a new round of financing, and nearly 40 companies have been listed on the national and local special new 'little giants' list." On April 6, at the Oath Ceremony of Lenovo Group's FY22/23 fiscal year, He Zhiqiang, senior vice president of Lenovo Group and president of Lenovo Venture Capital, announced the latest report card of Lenovo Venture Capital.
As the CVC of Lenovo Group, Lenovo Venture Capital has been given the role of "technology watchtower" since its birth, and has deeply laid out hard technology around the future of IT and Lenovo. But in a big sense, Lenovo Ventures has redefined the solution of CVC: not only to help the parent company expand its business boundaries and provide synergy in the industrial value chain, but also to maintain excellent investment performance and bring more stable financial returns to the group.
Between strategic value and financial value, Lenovo Ventures found the best balance between CVC institutions. Among them, a rather key factor is that, similar to the financial VCs in the market, Lenovo Venture Capital has an independent and flexible management operation mode and investment decision-making link.
In addition, Lenovo Venture Capital also advocates a broader investment vision and two-way empowerment between invested companies and Lenovo. This is summarized within Lenovo Ventures as CVC2.0. It is with this pioneering style of play that Lenovo Venture Capital has changed the industry's perception of traditional CVC and given CVC greater significance.
If you want to summarize the methodology behind Lenovo Venture Capital's achievements, you may use three words: early investment, accurate investment, and deep post-investment service.
Grab the tech track and shoot early
In 2014, Lenovo Group acquired Motorola mobile phones and IBM X86 servers, starting a diversified business transformation. At that time, China was in the wave of Internet entrepreneurship, and many excellent entrepreneurs and innovative companies emerged.
As for how Lenovo Group will carry out business innovation in the future, Lenovo also has a discussion within it. The final result is that there is one thing that must be done, that is, through the forward-looking technology layout, while linking the industrial resources behind Lenovo, to promote themselves to continue to move closer to the future of IT. As a result, Lenovo Venture Capital should be born from time to time. From the very beginning, the positioning of Lenovo Venture Capital has been very clear: to carry out a forward-looking layout for the innovation of Lenovo Group in the next 5-10 years, and to play the role of the vanguard and radar of new business growth points.
Following the development framework of the IT industry and the trend of technology-driven innovation, Lenovo Venture Capital's investment direction is also very firm, that is, to focus on the intelligent Internet, which includes five key technology points: Internet of Things, edge computing, cloud computing, big data and artificial intelligence. Looking back, in Lenovo Venture Capital's portfolio, almost half of the domestic artificial intelligence star companies are covered, such as Cambrian, Megvii Technology, and the Fourth Paradigm.
A major key behind this is that Lenovo Venture Capital has forward-lookingly laid out the technology track in advance. In 2016, before the tide of artificial intelligence, Lenovo Venture Capital was already exploring industry opportunities related to deployment, especially the value provided by these technologies in the industry.
Zhongke Huiyuan is a proprietary equipment manufacturer and industrial big data platform service provider for precision detection of industrial appearance. In 2017, Lenovo Venture Capital invested in Zhongke Huiyuan. However, at that time, Zhongke Huiyuan was still in the "laboratory" stage and had not yet entered the productization stage of the equipment. However, in the eyes of Lenovo Venture Capital, Zhongke Huiyuan is a new species that it has been looking for in the close integration of science and technology and industry, and can break the technical monopoly of foreign equipment on the appearance detection of the cover in one fell swoop through the rich research results and experimental experience of the core team, bringing about a significant improvement in the efficiency of the industry.
Next, the rapid development of Zhongke Huiyuan proves the keen vision of Lenovo Venture Capital. In 2019, Zhongke Huiyuan became the only supplier of AOI intelligent testing equipment in the industry that was recognized for bulk shipments, reducing the cost by one-half and increasing the valuation by more than 10 times. In 2021, Zhongke Huiyuan's testing equipment has once again achieved an order of magnitude improvement in efficiency and performance, getting rid of the high dependence on labor in industrial appearance inspection, and the business has also ushered in an outbreak.
It is also based on this predictive deep-ploughing layout, at the moment when specialized special new is popular in the market, Lenovo Venture Capital has also gained a large number of hidden champions of hard technology tracks. In the list of invested companies of Lenovo Venture Capital, the proportion of investment in specialized new enterprises can be said to be the leading in the industry. Up to now, Nearly 40 invested companies such as Lenovo Venture Capital, such as Digital Dafang, OnruiWei and Jiehuate, have been listed on the list of national and provincial/municipal specialized new "little giants".
The idea of this layout of core technology is highly consistent with Lenovo Group's strategy of "end, edge, cloud, network, and intelligence" and service transformation in the past two years. Lenovo Venture Capital has formulated a detailed investment strategy in each technology direction, such as in the field of computing power, it has long been in the layout of new computing architectures (such as multi-heterogeneous, RISC-V, integrated memory and computing), application-oriented chip design and end-edge cloud collaboration, and has gained a lot of high-quality targets at present.
For example, Xinchi Technology, which focuses on on-board computing scenarios. ChipCom is a local chip company that provides high-performance domain control level large-scale automotive specification processors, with the industry's top automotive semiconductor team. In 2018, Lenovo Venture Capital invested in the angel round of financing of Chip Chi Technology.
In just 3 years, that is, from 2021, Xinchi Technology has entered the stage of mass shipment of products, and it is expected to ship 2 million pieces in 2022. At the same time, the company's valuation has also risen, from 300 million yuan for angel ships to the current 16 billion yuan.
He Zhiqiang believes that large computing power will be an important foundation for future social development and national competition, and new computing application platforms, such as: on-board computing, robot computing, AR/VR, IoT and other scenarios, will give birth to hundreds of times the demand for computing power in the next 10 years, Lenovo has a natural advantage in this field.
"Demanding" line research drive, accurate investment
If the early entry into the technology track allows Lenovo Venture Capital to grasp the dividends of the outbreak of hard technology demand, then the extreme emphasis and continuous deep penetration of industry research once again ensure its ultra-high hit rate in early investment.
According to He Zhiqiang, Lenovo Venture Capital will spend about 2-3 months every year to seriously think about what to invest in, and all research must be done thoroughly. In these 2-3 months, the Lenovo Venture Capital team did not invest in a single project, only doing research, that is, "looking at the future".
"An important part of our 50% basic actions is the research, through a series of actions such as the research and the investment decision meeting, after deeply understanding the industry and the project, we can clearly choose a track and invest in the core logic of a type of enterprise, so as to establish an independent beacon of thought." In He Zhiqiang's view, Lenovo Venture Capital's almost harsh research requirements are essentially building the competitive advantage of research institutions.
"The world is changing too fast, and we must be able to practice our own determination and concentration, and really think independently." He Zhiqiang said that especially early investment is a hard job, "think clearly, see through, in order to start fiercely, play accurately."
To some extent, such a heavy investment in the research is closely related to He Zhiqiang's own experience, and it can even be called a habit. Prior to the establishment of Lenovo Ventures, He Zhiqiang served as the CTO of Lenovo and the president of Lenovo Research Institute for 15 years. He Zhiqiang said that when doing CTO, he spends about a few months each year to do research on technology trends in the next 5-10 years, which is called LTO (Lenovo Technology Outlook) within Lenovo. In addition, most of the investment teams of Lenovo Venture Capital are also from the background of technology.
With the long-term continuous tracking of the industry and the consequent in-depth industry cognition, Lenovo Venture Capital dares to bet in the early stage, and has a more accurate sense of control in project judgment, and can seize the right time to quickly take a shot.
Jingwei Qili is a typical case of Lenovo Venture Capital daring to invest. In 2020, Lenovo Venture Capital invested in Jingwei Qili, which is the earliest enterprise in China to enter independent research and development, large-scale production, and mass sales of MCU+FPGA hybrid programmable computing chips with HSA infrastructure, and its team has complete FPGA key technologies and more than 200 independent patents. However, at that node, the overall market environment was not very optimistic, and the financing of Jingwei Qili also encountered many obstacles.
However, Lenovo Venture Capital saw the core value of Jingwei Qili, especially the company's technology is of great significance to the independence of the national chip industry, so it did not hesitate to invest in it. Before the investment, that is, in the contact stage between the two sides, Lenovo Venture Capital actively helped the company to introduce core talents and carry out corresponding restructuring and adjustment, so that Jingwei Qili was able to "start again".
After lenovo venture capital investment, Jingwei Qili quickly entered the fast lane of development, achieving a 5-fold performance growth and a three-fold valuation that year. In 2021, the company has shipped more than 13 million units, has mastered the international mainstream FPGA process nodes, and has cooperated with IDG and ISG in both PC and server/data center directions.
Adhere to the CVC2.0 model and achieve "two-way empowerment" with a unique ecosystem
In addition to solid research, in the investment philosophy of Lenovo Venture Capital, it also includes another "basic action", that is, deep post-investment empowerment.
As a CVC, relying on the industrial advantages of Lenovo Group, Lenovo Venture Capital undoubtedly has a rich accumulation of upstream and downstream resources, which can connect relevant customers more widely and efficiently for the invested enterprises. At the same time, as a value investment institution, Lenovo Venture Capital advocates "sending charcoal in the snow" type of investment, "if you want to help, you will resolutely help".
In 2019, Weilai Automobile suffered multiple crises such as products and its own operations, and its stock price plummeted day after day, facing an unprecedented dilemma. As an early investor in Weilai Automobile, Lenovo Venture Capital stood firmly with the company at this time, came up with ideas, found ways to contact resources, and gave the greatest support.
It is understood that when Weilai Automobile was the most difficult, Lenovo Venture Capital held several meetings in a row to discuss solutions, and each time it was very late. At that time, He Zhiqiang had a strong belief in his heart, "If we stay with him, he will be better." In the end, WEILAI Automobile won the support of the Hefei Municipal Government, came back from the "death line", and became a leader in the field of new energy vehicles in one fell swoop.
In promoting the business linkage of the invested enterprises, Lenovo Venture Capital has also built a unique CVC2.0 ecosystem, relying on the three-tier service system of the invested member white paper, the Lenovo resource empowerment platform and the technology industry activities to strengthen the efficient collaboration between the ecological enterprises and the group, and the rise of the empowered enterprises can also feed Lenovo in terms of technology and culture, and use ecological power to achieve two-way empowerment.
Take, for example, Nederga, a high-tech company that displays AR/VR freeform display lenses. In 2017, Lenovo Ventures invested in the Nedka Pre-A round of financing. As a technology leader in ar optics, Nederga is an important technology partner of Lenovo in core components, and they have co-designed AR/VR products with Lenovo since its inception, including Lenovo Morningstar series and ThinkReality products. In this process, Nedka has also grown from a start-up to an excellent enterprise in Lenovo's supply chain, and has become a supply chain enterprise of Lenovo, and will undertake 150 million orders for Lenovo optical machine products in the future. In addition, the synergy amount of many Lenovo supply chain companies, including the fourth paradigm and Anxiang Smart Medical, has exceeded 10 million US dollars.
"On the basis of giving full play to the Group's industrial advantages, we will continue to promote the 'two-way empowerment' between Lenovo and the invested enterprises, and achieve continuous breakthroughs in synergistic income while continuously contributing to the company's steady return on investment." In addition to this pragmatic small goal, Lenovo Venture Capital also has a "romantic" expectation: with the rigor of scientific researchers and the feelings for technology, it is constantly looking for the next innovation opportunity. He Zhiqiang said that in the future, Lenovo Venture Capital will continue to have dreams, explore realistically, and do a good job in Lenovo's "watchtower of science and technology". (Text/Ma Mujie, Source/Cast China Network)