Author|Hu Shu Editor|Luo Lijuan
Zhang Yiming's recent establishment of a personal investment fund has brought him from a semi-retired state to the public eye again.
This is not his first foray into the venture capital industry, in the investment territory of Zhang Yiming and ByteDance, he "friendship" funded Source Code Capital and became one of the LPs; Invested in UpHonest Capital, XVC, and Black Ant Capital. And ByteDance, which he founded, is itself one of the most active Internet companies in foreign investment.
Not only Zhang Yiming, but also founders of Internet, technology and new car companies such as Wang Xing, He Xiaopeng, Li Xiang, and Li Bin are very keen on venture capital. In traditional industries, such as consumption and real estate, Zong Qinghou, Wang Shi and other bigwigs have also made equity investment and venture capital moves.
With the rapid development of China's economy, a group of entrepreneurs, wealthy families, and entrepreneurial upstarts have rapidly accumulated wealth. Old money and New money, whether it is out of consideration of asset appreciation, paving the way for industrial transformation, or "paying tuition" to keep up with the times, more or less reflect the anxiety of the rich about the current situation and the preparation for the future.
They are all actively entering venture capital. Some people contribute to LPs, some people directly invest in projects, and some people set up family offices (family offices) and entrust their property to the family office.
However, can devoting yourself to venture capital really alleviate the anxiety of "Zhang Yiming"?
01 "Zhang Yiming" shot
Among the Internet upstarts, Zhang Yiming's venture capital actions are frequent and can be regarded as active.
His recently established personal investment fund, called Cool River Venture, is domiciled in Hong Kong and is a private company limited by shares effective May 22, 2023.
In this institution, Zhang Yiming serves as a director, and the sole shareholder is Galaxy LLC, which holds 100% of the shares. It is revealed that Galaxy is a digital asset and blockchain company, and Cool River Venture's main investment direction is also technology-related industries.
Displayed on the website of the Hong Kong Companies Registry
There may be signs of this, as Zhang Yiming has previously expressed interest in emerging fields such as virtual reality, life sciences and scientific computing.
In terms of investment, Zhang Yiming is better known for his identity as source code capital LP.
According to rumors, ByteDance did not go well in the early stage of financing, and Zhang Yiming visited more than 30 VCs, all of which hit a wall. Fortunately, there was the appreciation of Cao Yi, who was working in Sequoia China at that time, and Byte became the last project Cao Yi did when he was in Sequoia China.
In 2014, Cao Yi founded Source Code Capital by himself, and Zhang Yiming appeared in the fundraising of the first fund, and he was also the largest single shareholder of Source Code Capital.
In addition to the source code, Zhang Yiming and ByteDance have also quietly become LPs of investment institutions such as UpHonest Capital, XVC, Black Ant Capital, and Qiji Chuangtan.
Last year, a private equity fund called Jinqiu Venture Capital entered the industry. The legal person of the fund is Yang Jie, the former head of the financial investment department of ByteDance, and "Jinqiu" is also the same as "Jinqiu Home", the earliest birthplace of ByteDance. However, Jinqiu Venture Capital has no obvious evidence that there is a contribution from Byte and Zhang Yiming.
In addition to Zhang Yiming, Meituan founder Wang Xing is also an Internet tycoon who is very enthusiastic about venture capital. Wang Xing has appeared behind the source code and XVC, and Meituan Capital has also covered Chenhai Capital, Zero One Venture Capital, Zhongding Capital, etc.
Within Meituan, there are also investment "troikas": Wang Xing, Meituan Zhantou, and Meituan Dragon Ball.
Compared with the three, Meituan Zhan Investment is more about investing around Meituan's business territory; Meituan Dragon Ball has built an ecology for Meituan, investing in a large number of Internet celebrity brands such as Heytea, Michelle Ice City, and Manner Coffee; Wang Xing is like an "interest-driven" investor, investing in securities, travel, insurance, new energy vehicles and other fields, among which the famous Mobike and Li Auto.
According to enterprise investigations, Wang Xing has directly invested in 33 enterprises. Most of the founders of these projects are Wang Xing's former subordinates or his Tsinghua alumni. It can be seen that Wang Xing does not set too limits on the field of investment, he is more picky about "people", and whether the founder can gain Wang Xing's trust is the key to whether he can get investment.
In Wang Xing's circle of investment friends, Li Xiang must be the most trusted one. Today, Li Xiang and the other two "Wei Xiaoli", He Xiaopeng and Li Bin, have also become active entrepreneurs in the venture capital circle.
Li Xiang himself is the LP of the first phase of the source code fund. In 2022, Li Auto also started an LP and established Chongqing Chezhiyuan Venture Capital Co., Ltd.
He Xiaopeng has more experience as an LP, and he is personally the LP of venture capital institutions such as GGV Jiyuan Capital, Morningside Capital, Wuyuan Capital, and Kunzhong Capital. Also last year, Xpeng Motors, as a cornerstone investor, also invested in the first US dollar fund of Star Airlines Capital.
It is reported that this phase of Star Airlines Capital's fund focuses on investment opportunities in the smart electric vehicle industry chain, clean energy and cutting-edge technology, focusing on early-stage and growth-stage targets.
NIO's venture capital may go back to 2016, when NIO established NIO Capital. In the data retrieval "NIO Capital", its public investment events reached 73, and among its investment cases, there are many well-known industrial companies such as CATL and Sunwoda Electric.
Traditional industries, such as consumption and real estate, are also two forces active in the venture capital industry in recent years.
Former Zong Qinghou obtained the fund qualification certificate at the age of 76; Later, Wang Shi founded Shenshi (Wuxi) Private Equity Fund Management Co., Ltd., focusing on investment in carbon neutrality, urban renewal and new consumption; Wu Yajun, the head of Longfor Real Estate, established Shuanghu Capital, is the investor behind domestic leading funds such as Sequoia and Hillhouse; Country Garden Venture Capital is also a dark horse in the primary market in recent years...
The liquor giants who are not short of money are not to be outdone.
A few days ago, Kweichow Moutai announced that it will invest a total of 10 billion yuan to participate in the establishment of two private equity investment funds; Luzhou Laojiao also held a signing ceremony of a strategic cooperation agreement with Guotai Junan to jointly explore the joint construction of industrial funds and M&A funds.
Moutai's two newly involved funds Image source: official announcement
In addition, wine companies such as Wuliangye, Yanghe, and Jinshi Yuan have announced corresponding plans.
There is a huge enthusiasm for venture capital, both Old Money and New Money.
02 The anxiety of the big guys
The enthusiasm of enterprises and entrepreneurs for venture capital is not only to consider asset appreciation, but also to pave the way for the upgrading and transformation of the industry.
Of course, there are also big guys' "anxiety" about the current situation.
For Zhang Yiming and Wang Xing, their growth has told the Internet industry the story of the back wave pushing the front wave. With the past of the dividends of the Internet industry, the technology upstarts behind them have caught up, and they do not want to become the "front wave" that is overtaken.
Today's ByteDance is already a behemoth, with Douyin, Toutiao, Watermelon Video, Tomato Novel, Volcano Engine, etc., multi-line business going hand in hand. But after Douyin, ByteDance faces a big dilemma that it has not been able to create a new phenomenal hit product in recent years.
Industry insiders believe that most of ByteDance's products are content-oriented, but they have not yet incubated infrastructure products such as payment and social networking with strong user stickiness. This may mean that once the next blockbuster content product appears, ByteDance may lose its current content advantage.
Zhang stepped down as ByteDance's global CEO two years ago, but he remains the architect of the company's vision.
This year, Zhang Yiming paid great attention to the AI big model. In April, Zhang Yiming published a 2023 open letter, saying that ChatGPT is a "singularity event" that cannot be ignored by the entire technology circle and venture capital circle, and we are witnessing the AGI field like the iPhone innovation led by Steve Jobs. He believes that ByteDance cannot miss AGI, just as any Chinese Internet company cannot miss AGI.
He also said that AGI can solve the organization's second-curve growth dilemma.
To judge an industry and things so positively and resolutely, this is difficult to see in Zhang Yiming's body. And his vigorous embrace of AI may also reveal his anxiety about Byte's current situation.
Wang Xing is equally excited and anxious about AI, once writing in his circle of friends: "The AI big model makes me both excited about the huge productivity that will be created, and worried about its future impact on the whole world." ”
One of Wang Xing's most notable investments recently is his support for Wang Huiwen's AI large-model entrepreneurship. At present, Meituan's internal team is also working on building self-developed basic models and related applications.
Image source: Meituan's official website
For Meituan, Wang Xing once said that "Meituan has no boundaries", which also allowed Meituan to explore multiple directions, from group buying business, gradually infiltrated into takeaway, movie tickets, taxi, sharing economy... However, Meituan's main business is still a business that emphasizes "infrastructure construction" and "low gross profit". Meituan did not begin to turn a profit until 2022, which really limited Meituan's boundaries.
At present, Douyin, Kuaishou, Tmall, and even Xiaohongshu have all shown their ambitions for local life, which is also a challenge for Meituan.
Wang Xing did not give up his understanding of "boundaries", he used it to think about investment. In a dialogue, he said: "Only investment, that is, the increase in the per capita capital stock, can expand the boundaries of production possibilities in this economy." ”
Perhaps, Wang Xing is also expanding his cognitive boundaries through investment.
Most of Wei Xiaoli's investment revolves around the upstream and downstream industrial chains of new energy vehicles, and it is not difficult to see their purpose: to enhance the synergy of the industrial chain and achieve cost reduction and efficiency increase. For example, their investment in lithium battery projects, seeking a stable supply of batteries, and trying to reduce production costs.
And this itself is also because of the fierce competition in the field of new energy vehicles. This year, the new energy automobile industry has also opened a "price reduction" model, which also makes them need to increase the industrial chain and seek further cost reduction and efficiency increase.
The anxiety of established consumer companies may lie in how to keep up with the times.
In the early days, Moutai's investment was mainly based on large consumption. In the recent planning, Moutai Fund does not emphasize the positioning of large consumption, but invests in a broader technology track. It is not difficult to see that Moutai's funds will be invested in industries that are in line with national policies, have rapid development and have better prospects.
In fact, Moutai is also trying to make himself younger. It launched the i Maotai app, which made a revolution in the channel. Moutai ice cream was launched, which caused a huge response in marketing, and young people who did not drink Moutai were also willing to taste this ice cream.
Whether it is for business expansion or to get closer to young people, Moutai is trying to "seek innovation".
03 Is VC really "good medicine"?
Investment is a kind of cognitive realization, and professional investors will transform their judgment on the frontier of the industry into actual returns by investing in enterprises.
For enterprises and founders, the restrictions on their main business, their intentions and purposes of investment, will also make them very different in their investment choices.
At least, Byte has already suffered a lot of losses in investment.
A search for "ByteDance" on Leniu Data shows that the number of public investment events counted by its platform is 151. It mainly involves 17 subdivisions such as entertainment media, enterprise services, games, education, intelligent hardware, e-commerce, social networks, local life, and medical and health care.
Through these investments, ByteDance became a shareholder of Tiger Pounce and Palmyue, and acquired game company Mu Pu and VR company PICO. But he also stepped on the pit of online education, and almost stepped on Lei Li Ziqi MCN Company Micronian.
At the beginning of 2022, it was reported that the ByteDance war investment department was disbanded. In the subsequent response of the relevant person in charge of ByteDance, the rumor was also confirmed.
IT Orange data shows that Byte invested in only 19 companies in 2022, a year-on-year decrease of 73%. At the end of 2022, Byte CEO Liang Rubo also said that Byte will continue to "fatten and thin".
Wang Xing has long had a good attitude towards "paying tuition" for investment. Compared with investing in projects, his investment strategy is more "investing in people", such as Shen Peng, the founder of Waterdrop, Si Jianghua, the founder of Gorilla Convenience, and Wang Huiwen, all of whom have fought with Wang Xing.
At present, the water drop chip has been strictly supervised, and the orangutan convenience has also fallen into a long-term rumor of layoffs and closures. The AI big model that Wang Huiwen is involved in is a track that burns money and may not necessarily produce results.
Nevertheless, the venture capital industry has had no shortage of "nuggets" over the past decade, which has a high appeal to wealthy families. According to data from Qingke Research Center, in RMB fund fundraising in 2022, "wealthy families and individuals" are one of the three most active types of LPs, with a cumulative number of more than 42,000 capital subscriptions.
Image source: Qingke Research Center
It should be noted that with the expiration of some funds, the GPs have handed over the answers one after another, and the results are not satisfactory. Many LPs have found that the IRR once written on the books is difficult to achieve, and the DPI (paid-in capital ratio) of many funds cannot even reach 1, that is, it is in a loss state, and LP and GP have also broken out a lot of "contradictions".
In fact, the venture capital industry is in a stage where it is becoming more and more difficult to raise funds, and more funds are flowing to the head GP, while the difficulty of raising funds for the waist and tail GPs is increasing.
And even the head GP is facing losses. In April, Tiger Global told LPs that its $12.7 billion venture capital fund had recorded a 20% loss by the end of last year.
Earlier, SoftBank Group's Vision Fund division also reported another quarterly loss.
Investment in the primary market has always been based on the premise of "high risk". For entrepreneurs who "seek innovation" and "change", "paying tuition" also wants to embrace the changes of the times as soon as possible. But for the intention to "seek wealth", perhaps it needs to be reconsidered.