Koala Fund and Sun Taoran's circle of friends

Image source @ Visual China

The article | VCPE reference, author | Li Zixuan, Editor | Li Youran

The koala fund seems to be accelerating its investments.

Last week, Koala Fund invested in two companies in succession, participating in a multi-million yuan Pre-A round of financing from Commercial Vehicle Autonomous Driving Developer Recco Zhitu, and a multi-million YUAN Pre-A round of financing from Cloud Acceleration, an end-to-end value stream delivery and management platform.

This year, the Koala Fund has completed 5 investments, compared with only about 10 investments in previous years, half of which has been completed.

The fund was born in 2015 by 300773. SZ), blue cursor (300058. SZ) founder - Sun Taoran initiated, the scale of the first and second phases are 1 billion yuan. Fund investors include Lakala, Beijing Science and Technology Fund of Funds, Zhongguancun Science City, Guotai Junan, Legend Holdings (03396.HK), Peking University Education Foundation, Guoke Holdings, BlueFocus, Tolls, Guanglianda and other well-known enterprises and professional investment institutions.

Throughout the investment layout of Koala Fund, it mainly focuses on the early stage of financial technology, corporate services and consumption upgrading. Most of the investment rounds are in the B round. Representative projects include Huixuan (HUIZ.us), Collect Money Bar, Yingmi Technology, Yidian Cloud, Cloud Wisdom, Qiqitong, etc.

Among them, the Internet insurance platform Huixuan (HUIZ.us) was successfully listed in 2020, and among the companies that did not queue up for IPOs, the enterprise IT leasing service and management platform Yidian Cloud has reported the news of listing in Hong Kong, and the full-stack intelligent operation and maintenance service provider Yunzhi has also completed a 150 million yuan E round financing, behind which there are many well-known institutions such as Sequoia China and SIG Haina Asia.

However, from the perspective of the number of IPOs, according to public information, Huixuan is the only listed company of Koala Fund, and the company is an Internet insurance company, which does not seem to be optimistic about investors in the secondary market. As of press time, the company's stock price is only $1.05 per share, almost one-tenth of the original issue price, and the total market value is only $54.53 million (about 350 million yuan).

In addition, according to IT Orange's calculations, the next round rate of koala funds invested companies is 38%, while the next round rate of most well-known VCs is 60% to 80%.

Although the invested companies are mixed, it is interesting that the fund hides the entrepreneurial past of the promoter Sun Taoran from the LP, partners, and investment fields.

According to incomplete statistics, Sun Taoran has participated in the establishment of at least six enterprises so far, during which he has met many like-minded friends, including Lei Jun, etc., who continue to appear in Sun Taoran's new entrepreneurial journey, and until today, some have also become key roles in the Koala Fund.

01 The jianghu is beginning to appear

Sun Taoran's entrepreneurial history can be roughly divided into two paragraphs.

The first paragraph is when he was a fledgling, full of energy. Five ventures in six years, all in the field of advertising and marketing.

His corporate management experience and later proponents of entering the fintech industry were all accumulated during this period.

In 1991, Sun Taoran joined the first Beijing Haidian Star Technology Center (hereinafter referred to as "Star Group"), which is affiliated to the Ministry of Civil Affairs. The company started with technical services and gradually extended its medical, equipment, advertising and other services, during which time Sun Taoran served as the general manager of Star Advertising Art Company (hereinafter referred to as "Star Advertising"), a subsidiary of Star Group.

Here, Sun Taoran opened his entrepreneurial jianghu.

In 1994, Beijing Youth Daily planned to create a special issue in the computer industry, but the newspaper staffing was insufficient, so it intended to find an advertising company to cooperate in running a magazine, and the advertising company funded the layout, and at the same time, it could also sell advertisements to the outside world.

At that time, computers were expensive, costing tens of thousands of yuan each, while the salaries of the working class were only a few hundred yuan a month. But Sun Taoran thought that there might be a potential opportunity in this new field, so he decided to undertake it and bet heavily.

According to the requirements of Beijing Youth Daily, enterprises cooperating with it need to pay a buyout fee of 4.28 million yuan to Beijing Youth Daily every year, 1.07 million yuan per quarter. At that time, Star Advertising's account was only 30,000 yuan.

Therefore, Sun Taoran borrowed 600,000 yuan from Zhang Zhengyu, president of Star Group, and raised more than 400,000 yuan from employees to make up enough for the first quarter of the buyout fee.

Fortunately, Sun Taoran caught up with a good time. In the early 1990s, computers began to enter the homes of ordinary people, and subsequently, entrepreneurship around computer hardware, software, the Internet and other industries also rose together. In the same year that Computer Times Magazine was founded, Lenovo launched the first "Chinese brand" laptop - Lenovo Zhaoyang S5100; Lei Jun launched a Pangu component similar to Office office software in Jinshan; Ma Yun founded the Chinese Yellow Pages...

For a time, it was full of big names in the IT industry. Sun Taoran also took advantage of the opportunity to open a column entitled "Dialogue with the Boss", interviewing Lei Jun of Jinshan one by one, Liu Chuanzhi and Yang Yuanqing of Lenovo, Wang Zhidong of Sitong Lifang and others.

Later, Lei Jun and Legend Capital, a subsidiary of Lenovo, became the angel investor of Sun Taoran's founding of La Cala, and Legend Holdings also became the LP of koala funds. However, this is all a later story.

In 1996, Sun Taoran participated in the founding of both companies.

The first is the electronics company Henderson Weiye founded by Zhang Zhengyu, president of Star Group, and the other is the establishment of bluefocus public relations consulting agency with five people including Zhao Wenquan, a classmate of Peking University. Both ventures involved an important person – Sun Taoran's college roommate, Tian Wenkai, who is also the founding partner of koala funds today.

Tian Wenkai and Sun Taoran originally planned to go to Shenzhen together, but by chance, Sun Taoran came to Beijing to do advertising and marketing, and Tian Wenkai entered the Shenzhen sales department of Zhongnan Securities and became the first batch of securities analysts in China.

In 1999, Sun Taoran was officially launched in the handheld computer "Business Pass" of Henderson Weiye Trading Marketing, and achieved a market share of more than 60% at the end of the year, with sales of more than 700 million yuan. The following year, Tian Wenkai also joined Henderson Weiye as the assistant to the president, responsible for the marketing and capital operation of Business Connect.

Soon after, due to some differences in management, Sun Taoran left Henderson Weiye, and Tian Wenkai also returned to the securities industry.

In 2007, when BlueFocus was seeking to go public and needed someone to handle related matters, Sun Taoran called Tian Wenkai for help. The latter joined BlueFocus as VP and secretary of the board of directors, president of BlueFocus Hong Kong Branch, etc., and presided over a series of investments, acquisitions and mergers before and after the listing of BlueFocus.

Tian Wenkai has said that he has always believed in Sun Taoran, so many times, when Sun Taoran disagrees with others, Tian Wenkai also stands with him, such as in the thrilling moments before the listing of BlueFocus.

On December 29, 2009, it was the review committee of BlueFocus listing, and the afternoon before, an anonymous whistleblower letter was sent to the review committee, and the sponsor of BlueFocus listing was quickly notified that the company needed to respond before the review meeting the next day.

Sudden changes caught everyone off guard, and submitting a response in such a short period of time is almost impossible. Soon Sun Taoran received a call from BlueFocus CEO Zhao Wenquan, who offered to withdraw the material and postpone the issuance of the trial meeting. Sun Taoran firmly disagreed, believing that once withdrawn, BlueFocus would face greater uncertainty in its listing.

He was also worried that Zhao Wenquan would make up his own mind. It just so happened that Tian Wenkai was staying with Zhao Wenquan at the CSRC, and Sun Taoran called tian Wenkai to tell him to follow Zhao Wenquan and issue a statement as the secretary of the board of directors as soon as he proposed to withdraw the materials - this is Zhao Wenquan's personal opinion and does not represent the blue focus board.

In the end, Sun Taoran rushed back to the blue cursor, took everyone to sort out the materials that needed to be supplemented and improved, and prepared all night, and finally replied on time.

In 2010, blue cursor (300058. SZ) was listed on the Shenzhen Growth Enterprise Market, becoming the first public relations stock in China, opening at 43.6 yuan / share on the first day of listing, and finally closing at 39.98 yuan / share, up 18.07% from the issue price, and the market value reached 640 million yuan. BlueFocus also became the first company that Sun Taoran co-founded and successfully went public.

02 Move the circle of friends to the Koala Fund

From graduation in 1991 to leaving Henderson in 2000, Sun Taoran experienced nearly a decade of high-intensity and full-loaded work. After that, Most of The Daily Affairs of BlueFocus were operated by Zhao Wenquan, and Sun Taoran began a leisurely life of playing golf during the day, playing cards at night, and occasionally watching games.

After a few years of this, Sun Taoran began the second stage of the entrepreneurial road, entering an industry that he had never been involved in before - financial payment.

In 2005, Sun Taoran founded La Cala. Starting from third-party payment, Lakala has gradually extended the ecological model of technology, logistics, finance, branding, marketing and other all-round assistance to merchants. Old friends Lei Jun and Lenovo are angel investors in this company.

At first, Sun Taoran was interested in seeking financing from Legend Capital, a subsidiary of Lenovo, and he contacted Zhu Linan, the chairman of Legend Capital, through a friend of Lenovo Group. When the latter did due diligence, he found Sun Taoran's friend Lei Jun. After chatting with Lei Jun for two hours, Zhu Linan asked, "Do you think it's so good, can you vote for it yourself?" So Lei Jun invested 4.3 million yuan in Lakala "under General Zhu".

Together with Sun Taoran's own investment of 4.3 million yuan and Legend Capital's investment of 8.6 million yuan, Lacala's angel round raised a total of about 17.2 million yuan.

It is worth mentioning that this is also Lei Jun's debut for personal angel investment, and it has obtained rich returns.

On April 24, 2019, La Cala (300773. SZ) was listed in Shenzhen, with an opening price of 39.94 yuan per share on the first day, with a total market value of 19.2 billion yuan. According to the prospectus, after the listing of Lakala, Lei Jun held 1.02% of the equity. Based on this calculation, the value of Lei Jun's equity reached 195 million yuan, bringing more than 45 times the return to Lei Jun.

However, since then, Lacala has reported negative news such as selling personal information and selling fake wine, and the stock price is also close to the waist, as of press time, Lacala's stock price is 17.10 yuan / share, and the market value has fallen to 13.680 billion. It can be seen that success for entrepreneurs is always only temporary.

In 2005, Sun Taoran's entrepreneurial direction aimed at the venture capital industry and established the Koala Fund. From LPs to partners are familiar faces.

According to the investigation, the fund manager of Koala Fund is Beijing Koala Kunlun Investment Management Co., Ltd., which manages Beijing Koala Kunpeng Technology Growth Fund Partnership (hereinafter referred to as "Koala Kunpeng") and Beijing Koala Kunpeng Internet Industry Investment Fund (hereinafter referred to as "Koala Kunluo").

According to the investigation, Legend Holdings and BlueFocus (Shanghai) Investment Management Co., Ltd. each hold 4.9505% and 4.4554% of the shares of Koala Kunpeng, while Lei Jun and BlueFocus hold about 0.1515% and 0.1634% of the company's shares through Lakala Payment Co., Ltd.;

Legend Holdings and BlueFocus (Shanghai) Investment Management Co., Ltd. each hold 5% and 3% of the shares of Cora Quinole, while Lei Jun and BlueFocus hold about 0.1933% and 0.2085% of the company's shares respectively through Lakala Payment Co., Ltd.

Image source: Qichacha screenshot

The founding partner of the fund is Tian Wenkai, who has worked with Sun Taoran in Henderson, BlueFocus and Lacala, Wei Kai, the president and partner, was responsible for investment management at Legend Capital, and dai Wei, a partner, also worked at Legend Holdings.

03 The Godfather of Entrepreneurship

"Create and excel". The experience sun Taoran accumulated from entrepreneurship has also become the nourishment for koala funds to invest.

What is more special is that although the Koala Fund is a market-oriented fund focusing on financial returns, at first glance it will be mistaken for the Koala Fund as a strategic investment unit of Lakala.

Lakala is the cornerstone of the Koala Fund LP, and most of the early investments of the Koala Fund are also distributed in the Field of Internet Finance related to Lakala, and are concentrated in the B round and before.

Tian Wenkai once concluded in an interview with 36Kr that the logic of Koala Fund's investment in finance is very simple, focusing on the link between products and people. Koala Fund believes that the essence of financial technology is to connect with consumers through technical means, and after getting consumer behavior data, label, risk control or rating for consumers.

Later, the Koala Fund also gradually expanded its investment scope to artificial intelligence, new consumption and other fields, but there is a common methodology for different fields:

The first is to look at the track and judge whether there are systematic opportunities in the field to which the project belongs;

The second is to look at the products and services to determine whether the "effective needs" of users are met, that is, consumers have the desire to consume such products, and consumers must be able to afford to consume;

The third is to see whether the business model conforms to basic logic;

Finally, it evaluates the entrepreneur's ability to have a keen insight into industry trends and consumer needs.

All of this is influenced by Sun Taoran, who values products and needs as extremely important.

Sun Taoran once said: "It is possible to be real and not flashy, hua and real are the best, and flashy and unreal is the worst, so the essence is still the function and performance of the product itself." If its own function and performance are insufficient, just the pursuit of appearance or marketing brilliance, there is no point." Products need to cut into the needs of consumers, so no matter what kind of business, Sun Taoran will examine the relationship between the two.

In this way, the Koala Fund has been able to avoid some minefields. Koala Fund has invested in e-commerce and consumption, but according to IT Orange, in the era of O2O popularity, there is only one O2O company invested by Koala Fund. In its most widely involved in the field of financial technology, the Koala Fund has also escaped the P2P thunderstorm.

Sun Taoran is not optimistic about these two types of business, and from the perspective of demand, he uses a very appropriate metaphor to describe, "A play has a thousand actors, and it is better to say that the dragon runner is the male number one in China in the future, which is itself problematic."

In his view, O2O is "to put a very weak, small-scale demand into a large, and burn it according to the big." P2P is only a very small piece of business in the field of loans, compared with listed financing, bank loans, trusts, etc., the amount of personal lending to individuals accounts for almost only one-thousandth of the total amount of loans, at the same time, through high interest rates to attract personal idle funds, to meet the needs of low-quality loan objects, the risk is obvious.

These experiences were used not only by Sun Taoran to guide the investment of koala funds, but also to "preach".

Sun Taoran has always been keen to export views through various channels and spread his experience in entrepreneurship and management. He has published books such as "36 Military Rules for Entrepreneurship", "5 Major Military Techniques of Effective Management", and "Refining with The Way", of which "36 Military Rules for Entrepreneurship" has been reprinted more than 50 times and sold more than one million copies. Therefore, Sun Taoran has the title of "entrepreneurial mentor" for a long time.

In addition, he also set up a personal WeChat public account "Tao Ran Free", which pushes articles or small videos at a frequency of more than three times a week, involving the quality cultivation of entrepreneurs, the recruitment and selection of talents, how to deal with venture capital and other content that entrepreneurs need. Most of the video content comes from the "Kunlun Academy" within the Koala Fund.

Kunlun Academy was founded in 2019 by Sun Taoran and others. According to Baidu Entry, the academy aims to help entrepreneurs "start a business in a systematic way and take fewer detours", giving usable conclusions from the three levels of concepts, methods and tools.

Leaving aside for the moment, the problems faced by entrepreneurship are ever-changing, and the conclusions of "system entrepreneurship" and "taking it and using it" are feasible to some extent, but the accumulation of contacts and the art of management, Sun Taoran personally told everyone.

Source:

"2 billion to set up two venture capital companies!" Lei Jun has a hobby to support a huge investment empire"

"Different Sun Taoran"

"Sun Taoran: "Wool out of the dog bear to pay" is the biggest scam"

"Koala Fund Tian Wenkai: The Essence of Fintech is to Connect with Consumers"