Image source @ Visual China
Wen | City Boundary, author 丨 Tao Ting, editor 丨 Han Zhongqiang
In China's venture capital circle, there are many big names, such as Hillhouse Zhang Lei, Sequoia Shen Nanpeng and so on. In the myth of wealth creation set off by Zhang Lei, the past two decades have been the best era for Chinese venture capital.
In this era, there is a female venture capitalist, Xu Xin, chairman of Today Capital. She is the driving force behind netease Ding Lei, Wahaha Zongqinghou, JD.com Liu Qiangdong and other rich people, and is known as the "queen of venture capital" by the outside world.
However, with the passing of the golden age of Chinese venture capital, Xu Xin has also been quiet in recent years. Until April this year, Xu Xin was on the hot search due to many disturbances: the group purchase of bread and milk in early April, and the proposed cash out of Zhihu 600 million yuan in mid-to-late April. This made Xu Xin's myth of wealth rise to the surface again.
How can this venture-back queen, who does not let her eyebrows be shaved, realize the myth of wealth creation?
01, the wind rises the Xiangjiang River
A number of financial sources told the city that Xu Xin is angular and has a strong aura. As a venture capitalist, she has many advantages as an investor, such as being selective, daring to bet heavily, and being patient. In fact, xu Xin's qualities as a venture capitalist germinated in Hong Kong, which has a well-developed financial industry.
In 1988, after graduating from the Department of Foreign Languages of Nanjing University, Xu Xin was assigned to the sales department of the Bank of China headquarters and became a counter salesman. The trilogy of "registration, copying, and stamping" has become Xu Xin's daily work.
Three years later, the Chinese government and the British government jointly trained British certified public accountants, and the bank won a place for Xu Xin, who worked well. After the entrance exam, Xu Xin was sent to the accounting firm of PricewaterhouseCoopers (one of the world's four largest accounting firms) in Hong Kong to begin a three-year training. The year was 1992.
At that time, there was still a long way to go before Xu Xin entered the field of venture capital. During the three years of training at PwC, Xu Xin said that she had "made very rapid progress in the three years and learned what is called hard work, that is, you have not finished your work, you cannot sleep." This experience undoubtedly sharpened Xu Xin and made her more tenacious and patient.
In 1995, relying on the mainland and the rapidly growing East Asian economy, Hong Kong not only became the best medium for communicating different currencies, but also had a well-developed financial infrastructure, such as the launch of a real-time payment and settlement system based on the latest IT technology. This system can react to market changes and large transactions in the first place.
In the same year in a financial environment like Hong Kong, Xu Xin's boss decided to start his own business and devote himself to the venture capital industry. Xu Xin was also invited by his boss to the new company Baifuqin. Founded in 1988, It was once the largest Chinese-funded securities company in Hong Kong.
After buying a shell listing and changing its name to Peregrine Investment, Perfort not only made frequent moves in Southeast Asia, but also took advantage of the wave of Chinese mainland the reform of state-owned enterprises to get involved in the listing business of domestic enterprises in Hong Kong. In those years, Peregrine became the main sponsor of most mainland H-shares listed in Hong Kong and red-chip stocks listed on Hong Kong-capital.
For example, Haihong Group, China Overseas, CHINA TRAVEL Hong Kong, Guangdong Investment, Yuexiu Investment, Haihong Investment and Shanghai Industrial and so on. The work experience in Baifuqin has been of great benefit to Xu Xin's broadening of horizons, the improvement of his ability, and the accumulation of human resources. It was also here that Xu Xin gradually formed a Chinese-style investment concept.
During his years in the direct investment department of Peregrine, Xu Xin participated in the joint venture mergers and acquisitions of many large companies. Among them, it is particularly famous that Xu Xin brokered Peregrine and French beverage giant Danone to inject $45 million into Wahaha.
Although wahaha has finally become a well-known brand in China with the help of capital, the relationship between Wahaha and capital is not pleasant. Among them, in 2007, Zong Qinghou disclosed that Danone's forced purchase of Wahaha incident was the focus of the outbreak of contradictions between the two. Although the two sides later peacefully "broke up" after a series of litigation lawsuits, the delicate relationship between the capital and the business operator is still impressive.
Wahaha's subsequent great success made Xu Xin deeply realize that a brand can only be the first. However, the weather is unpredictable. Just when Perfus qin expanded the international capital market, the stock market crash struck in 1997, due to a large amount of investment deposited in Southeast Asia, perfu qin broke out a debt crisis, and then declared bankruptcy through liquidation.
In early 1998, after bidding farewell to Peregrines, Xu Xin joined the Barings Investment Group and became the first employee of Barings Asia. Barings Asia belongs to ING Holland International Group, the office is also located in Hong Kong, its positioning is to find investment opportunities in the Asian market, including China, Japan, South Korea, India and other places, and the Chinese market is the absolute main force. That is, in Barings Investment, Xu Xin has come into contact with many international affairs.
When Xu Xin first entered The Barings Investment, he had to raise funds by himself, which objectively exercised Xu Xin. At that time, affected by the Asian financial turmoil, capital was quite cautious about all investments in Asia, and it was more difficult to raise funds than usual. Despite this, Xu Xin raised money.
Her strategy is low-cost investment, after a period of time, after the development of the enterprise, generated several times the book value-added, the data to the LP to see, naturally has a convincing. For example, Xu Xin once invested in a software outsourcing company called BFL. Although this is an Indian company, the main customer is American, the business is stable, and the gross profit margin is high. Three years after investing in BFL, accounting for 55% of the shares, Xu Xin received a 6x return from this project.
Even if the economy is low, Xu Xin does not hesitate to see that it is worth investing, especially known for NetEase. In 1999, when the impact of the Asian financial turmoil had not yet dissipated, Xu Xin invested 5 million US dollars in Ding Lei, who was not optimistic about the outside world at that time. Later, it became a household name, NetEase's market value soared, and Ding Lei became The richest man in China.
02. How to make rich?
After entering the millennium, Hong Kong's financial industry has become more and more developed under the convergence of logistics and popularity. At the same time, many industries in the mainland have begun to take off, such as the Internet and large consumption. Xu Xin, who opened his eyes, saw the huge investment potential of the mainland market.
In 2005, Xu Xin founded "Today Capital" and its headquarters is located in Shanghai. At that time, Xu Xin determined the investment philosophy of today's capital to invest only in the Internet, large consumption, and new retail. Subsequently, in the more than ten years after moving from Hong Kong to Shanghai, Xu Xin invested in many enterprises, such as JD.com, Vipshop, Xiangyi Materia Medica, Liangpin Shop, Typhoon Shelter, Ctrip and so on.
The return on investment obtained by Xu Xin is amazing. After JD.com was listed on the NASDAQ in New York in 2014, Today Capital, which holds a 7.8% stake in JD.com, has earned more than 10 billion yuan on its books, with a return rate of more than 160 times. In addition, Vipshop earned more than 50 times, and the three squirrels made 50 times...
It is no exaggeration to say that Xu Xin has achieved fame and fortune in the true sense. After Xu Xin became the second best venture capitalist in Forbes China in 2014, in 2015, Xu Xin was ranked among the 50 most influential female business leaders in Forbes Asia. In 2019, when Xu Xin was named the best investor of Forbes China, he also ranked 351st in the Hurun Report.
So, on what basis did Xu Xin realize the myth of creating wealth? In the early stage of marketization, "relying on resources such as interpersonal relations can solve the problem of fundraising on the one hand, and the problem of project source on the other hand." In other words, you can find a quality project, put it in, and exit it. Bai Wenxi, chief economist of IPG China, told the city.
Due to Hong Kong's investment experience, Xu Xin has a more international perspective than the average person. Xu Xinzheng was aware that Chinese would drink "foreign" bottled water like a foreigner, which led to her successful investment in Wahaha and Zong Qinghou.
Xu Xin is undoubtedly also diligent. She once said, "If there are any small achievements in my investment, it is because I have accumulated thirty thousand hours." "Xu Xin spends a lot of time researching the market, researching brands, and meeting entrepreneurs. For example, when investing in "three squirrels", today Capital needs to conduct a survey of 300 consumers, and each consumer calls for half an hour. Xu Xin personally went into battle and made 80 phone calls.
Different from IDG Xiong Xiaoge's pepper noodle investment, Xu Xin does not invest, and one shot is a big deal. Moreover, for projects with higher customer price or higher frequency, Xu Xin will continue to increase investment. IT Orange data shows that in today's capital investment cases, 19 companies have been involved in financing consecutively.
For example, after investing $10 million in Jingdong in 2006, in 2008, Xu Xin led other investors and invested an additional $21 million in Jingdong; for example, Xu Xin's 2018 investment in Prosperity Preferred increased its position 5 times in two years.
Xu Xin also said that we must believe in the power of quality and the power of compound growth. In the eyes of the outside world, the reason why Jingdong has torn open a big hole in Ali's world is precisely because it interprets the above two points very well.
Participating in the operation and management of the invested enterprises has also become one of the ways for Xu Xin to create wealth. In the view of Wang Zhaojiang, fund manager of Shenzhen Qianhai Red Bank Capital Management Co., Ltd., the most important thing is whether investors participate in the operation of the invested enterprises, the most important thing is whether their own cognition is profound, "Obviously, Xu Xin understands management, and is in line with the business philosophy of the enterprise management team, and grasps the essence of things." ”
Xu Xin not only helped JD.com find professionals to be financial directors, but also took the initiative to share half of the salary of the new financial director. In addition to JD.com, Xu Xin also urged the well-run good shops that operated offline to do online sales, and multi-channel operation greatly expanded revenue.
Helping invested enterprises become the first in the industry is also something that Xu Xin has been thinking about. The classic Yao Chen + little donkey advertisement of catch-up network is planned by Xu Xin to help find well-known advertisers. This ad helped catch up with the network from 58 to 50% behind its rivals in the same city to surpass its opponents.
Sometimes, there is no intention to plant willows, and willows are also shaded. On April 7 this year, in the midst of the epidemic in Shanghai, Xu Xin's group had difficulty buying bread and milk screenshots, and after the crazy forwarding of the Internet, the hot discussion in the outside world also reached its peak, "The venture capital queen with a value of up to 16 billion yuan is also 'not enough to eat'".
Not long after, Xu Xin revealed through social platforms that the company she invested in, Dingdong, bought vegetables and helped her solve the problem of ingredients. After the public opinion continued to ferment, Xu Xin and Dingdong bought vegetables, which made a big hit. "Under Xu Xin's popularity and influence, people and things related to her group purchase of bread and milk will form a kind of public opinion dissemination." Bo Wenxi told the city boundary.
For the reasons for Xu Xin's success, Bai Wenxi made a summary: "In addition to her personal ability and the outlet of the times, it is also related to her full understanding and grasp of human nature and the market, and the formation of a unique methodology. ”
03, business is getting more and more difficult to do
good times don't last long. With the disappearance of the demographic dividend, the golden age of China's large consumption has been gone since 2018. Since 2019, as the number of Internet users has grown and become saturated, the era of China's Internet traffic dividend has also come to an end.
Most of the new retail is in the golden age of large consumption, riding on the "wind" of the Internet to develop. The golden age of large consumption is gone, and the end of the era of Internet traffic dividends has made large consumer enterprises that developed barbarically in the past face unprecedented tests because they cannot enjoy traffic dividends.
This is not a good thing for Xu Xin, who claims to only invest in the three tracks of Internet, big consumption and new retail: in addition to the coffee brands Manner and Dingdong to buy vegetables, some of the companies Xu Xin has invested in in recent years can be described as ill-fated.
In 2019, the investment of Beibei Group, Neighbor One, and Miao Life were all folded, and the fresh e-commerce platform Miao Life left the market at the end of the year to close all stores. After the strategic merger of Neighbor One and Tongcheng Life in 2020, it finally filed for bankruptcy in July 2021 and became a member of the community group purchase.
In August 2021, Beibei Group also went bankrupt; the baking brand Momo Dim Sum Bureau, which capital invested in 2021, also broke the news of layoffs at the beginning of this year when it was established less than two years ago. In the first three months of 2022, Today Capital only completed the strategic financing of children's cheese brand Dr. Cheese, and the A+ round of financing of technology company Xinxingji.
Unlike the long-term holding of shares in companies such as JD.com and Dingdong, Xu Xin cleared Manner's shares early. Although in the Xuxin group purchase of bread and milk incident, the previous long-term loss of Dingdong to buy vegetables has been a fire, but for its future development prospects, Yuzhibo Consulting founder Shi Yu holds a pessimistic attitude.
"Dingdong buys vegetables in a way that can make money, just like Meituan, requires a large number of orders. From the perspective of distribution mode and time cost, Dingdong buys vegetables in first- and second-tier cities, and it has to be a very rigid demand, that is, when the order volume is large enough, its revenue can be leveled. Shi Yu explained to the city boundary.
Xu Xin's situation is also related to the deepening of the degree of marketization. In recent years, with the maturity of China's multi-level capital market, venture capitalists cannot rely solely on interpersonal relationships to drive investment, but need their own resource gathering and mobilization capabilities, strategic management and operational capabilities of enterprises.
In the final analysis, "Xu Xin is still path dependent, because the investment essence of Tencent, JD.com, NetEase, etc. is not much different, all belong to the Internet economy, if Xu Xin wants to continue the myth, or to expand the circle of ability, or on top of the circle of ability, lead innovation." Wang Zhaojiang told the city boundary.
For the disappearance of the traffic dividend era, Xu Xin is not without perception. As early as 2016, Xu Xin gave a speech saying that after 21 years of investment, he felt that winter was very cold for the first time, and business was becoming more and more difficult to do.
Perhaps based on this, in the past two years, the focus of today's capital investment has shifted. From 2020 onwards, Xu Xin has invested in the hard technology track. In essence, under the changes in China's industrial development structure, the hard technology track has immeasurable potential.
In September 2020, Today Capital led the Hino Innovation Series D financing, a company that does warehousing and logistics robots; in November, Today Capital and SoftBank Vision Fund led the Series C financing of Gaoxian Robot, with a total amount of 1.2 billion yuan.
Hairou innovative treasure box storage robot HAIPORT series
Since 2020, Xu Xin has invested in a total of 6 technology companies, accounting for nearly one-third of the total investment. However, the hard technology track invested by Xu Xin is obviously a hard bone. From the current point of view, the technology companies invested by Xu Xin do not have a big splash at present. Compared with xuxin's previous investment in the Internet, big consumption and other tracks, the focus of the hard technology track is different.
"The difficulty of hard technology investment is greater than that of consumption and the Internet, the more difficult the technical route, the capital and time consumed are much longer than consumption, such as investment in chip foundry, many years of accumulation can be further small, long-term accumulation can have a qualitative change, want to achieve investment results in a short period of time, it is almost impossible." Wang Zhaojiang explained.
What else can Xu Xin do to make a fortune? Shi Yu believes that Xu Xin itself has the genes of the Internet and can invest in empowering enterprises in traditional industries in the form of data. However, Wang Zhaojiang believes that although some of the tracks that Xu Xin is good at are currently in a bottleneck period, she can still continue to explore along her circle of ability - the people's livelihood consumption route, such as offline experience consumer economy transformation. After all, things that are outside the circle of power are not easy to succeed.
In April this year, after Xu Xin was on the hot search with incidents such as group purchase of bread and milk, Song Feng, a financial person in Shanghai, received many people who either inquired about Xu Xin or asked him for Xu Xin's contact information. A friend who works as a shareholder in an Internet company revealed to Song Feng the idea of finding Xu Xin as his company platform, "With Xu Xin's platform, there will be no worries about going public." ”
But the problem is that xu xin's era of having goldfinger has long passed. For Xu Xin, the tests she faces in the future are far more than opportunities.
(Song Feng is a pseudonym in the text)