On March 30, GGV Capital officially changed its Asia business to Granite Asia and its US business to Notable Capital. Since then, it has continued to use the name "GGV" for 18 years and fulfilled its mission.
Prior to this, GGV Captial had just undergone a brand spin-off of the RMB fund part in September last year, and the RMB fund part became a completely independent operating entity, using "GGV Capital" as the brand name, with partner Xu Bingdong at the helm.
Based on all the current information, GGV Capital has been divided into three completely independent entities: Granite Asia, Notable Capital and GGV Capital.
As a multinational investment institution with a history of 24 years, some people commented that unlike US dollar funds such as Sequoia China and Jingwei Venture Capital, GGV's China journey is more like a "Chinese entrepreneurial drama" of US dollar funds.
The first super unicorn
In 2003, it was a special period of SARS in China.
An Alibaba's Series A investor was full of concerns and pessimism about the post-SARS Chinese market, and was driven by panic to sell all the shares of the invested companies and withdraw from the Chinese market. It was at that time that GGV bought their stake in Alibaba.
What the investor didn't expect was that with the end of SARS and the dividends of the new WTO era, Alibaba became the darling of the times. According to Tong Shihao, managing partner of the U.S. branch, in 2017, Alibaba's stake has risen more than 13 times in the 13 years since 2003.
This investment is GGV's first super unicorn in China's VC industry, and it also lays the foundation for GGV's determination to remain optimistic about the Chinese market in the long term.
20 years ago, I drank liquor in Shandong
History is a cycle.
In 2005, GGV ushered in a new managing partner, Fu Jixun, when the domestic new energy photovoltaic market was hot, the competition in the TMT field was fierce, and the consumer industry was also in an upward cycle, and the investment market was in a blue ocean.
Fu Jixun and his colleagues plunged headlong into the Chinese market, and soon invested in their first project, Meihua MSG, which was restructured and listed in March 2010.
Immediately afterwards, Fu He's team successively invested in a number of companies in traditional industries, among which he was most impressed by a logistics company in Shandong, --- Rongqing Logistics.
When recalling this experience, Fu Jixun was deeply impressed by the scene of following the local customs and drinking liquor with everyone at noon in Linyi.
"It's completely different from the current communication atmosphere in the Internet industry. About 4 years ago, Fu Jixun commented.
The drama is that today, 20 years later, in the capital market dominated by RMB, everyone has begun to drink liquor again......
Investing in China's "grassroots economy"
In 2008, the domestic entertainment industry was on the rise. At that time, Li Hongwei, the managing partner of GGV, was in Guangzhou to see the game track and came into contact with the multi-game network, which incubated YY --- This voice tool that was later known to almost all gamers.
At that time, everyone didn't know much about YY, but even so, YY's novel business model still aroused Li Hongwei's great interest. According to Fu Jixun, this is the first time that GGV has reached out to and focused on China's "grassroots economy".
At that time, there were only five or six funds in the domestic investment market in the Internet field, so everyone in the industry knew who was going to invest in what. After a friend in the industry heard that Li Hongwei was going to invest in YY, he made a phone call, saying that this company is just a portal and not big, and other voice tools are also available, and there is no difference, so he persuaded Li Hongwei not to invest.
However, on YY, Li Hongwei saw a different color: this project has the ability to aggregate gamers across the network, rather than a single voice tool, thus showing that it has great potential for online social networking.
"Friends are well-intentioned, but you still have to make your own judgment when investing. There are some projects that most people in the industry think are bad, but there should be room to take a look. When it does become a unicorn, there are often many people who regret it. Li Hongwei recalled.
Finally, at the end of 2012, YY was listed on NASDAQ, and during the preparation for the IPO, GGV followed up and placed an order and became a cornerstone investor. A year later, YY's share price has risen nearly tenfold.
GGV's directorship in YY lasted until around 2017, and later Dong Rongjie, the head of YY's game operation business, also became the CEO of Huya.
What the "M&A promoter" caught and what was missed
"In my investment career, I have facilitated a lot of mergers and acquisitions, and many people have put the label of 'M&A matchmaker' on me. In fact, mergers and acquisitions are only a result and a means, and the most fundamental thing is to invest in valuable companies. Fu Jixun said.
In 2012, Mr. Fu led the first $1 billion acquisition of the Chinese Internet: the Youku Tudou merger. Youku Tudou is Fu Jixun's first M&A case, which kicked off China's TMT M&A.
He said that promoting timely mergers and acquisitions is also one of the ways to reflect the value of investment.
In those years, video content skyrocketed, video websites lost money, content copyright costs rose, and users had too many choices, resulting in information overload. At that time, Youku and Tudou faced the same problems: undervalued market value, increasing losses, slowing user growth and increasing pressure, and mergers and acquisitions were a key step for Youku and Tudou to continue to develop.
In the first week of February 2012, Fu Jixun, as a major shareholder of Tudou, negotiated a merger with Li Shimo, the earliest investor of Youku.com, and soon on March 12, Youku Tudou announced the merger.
In the case of Youku Tudou's acquisition, it took about 3 to 4 weeks from the beginning of the discussion to the announcement. It was announced that the transaction was completed and that it was reviewed by the SEC on various antitrust issues about six months later. In August 2012, Youku Tudou officially completed the merger.
Since then, Fu has also facilitated mergers and acquisitions of companies such as Qunar and Ctrip, UC Browser and Alibaba, Harrow Bicycle and Yong'an Xing, Didi and Kuaidi, Yunman and Truckbang, Grab and U-ber.
"In 2011-2014, to be honest, I didn't think we did the best from an investment perspective. There were some cases of exits, but missed out on early investments from Toutiao and Kuaishou in those years. Fu Jixun said.
"If you join full-time, I'll vote for you"
One day in 2014, He Xiaopeng called Li Hongwei, hoping that she and Fu Jixun would come and see their new project: a car.
He Xiaopeng is the co-founder of UC, which he stayed with after UC was acquired by Alibaba. During his time at Alibaba, He Xiaopeng completed the incubation and team building of the automobile project.
At that time, Fu Jixun's confidence in He Xiaopeng's car making was not high, because the project was more like a side hustle for him.
"By 2016, I was starting to see the momentum of electric vehicles, and I was seeing the momentum of autonomous driving, and a lot of people started talking about autonomous driving technology. Fu Jixun began to realize that smart cars would become an important product in the future, and spent a long time studying this field.
Eventually, he called He back to him: "You should do this project, are you ready to do electric cars full-time? If you're ready, I'll make the investment." ”
On July 7, 2021, Xpeng Motors was officially listed on the Hong Kong Stock Exchange, and Fu Jixun also went to the scene.
The first RMB fund
Before and after the name change, GGV raised two representative "first RMB funds".
The first was in early 2018, when GGV completed the raising of its first RMB fund since its establishment, totaling RMB 1.5 billion.
The second is the first RMB fund launched at the end of 2023 after GGV Capital announced that it would officially operate independently and no longer use the English brand of "GGV Capital". This fund is the "RMB III Fund" of GGV Capital, which has signed a contract with Chengdu High-tech Ceyuan Investment Group Co., Ltd.
The fund will focus on the five major areas of GGV Capital, and continue to explore attractive investment opportunities through industry-focused thematic investments, with flexible allocation between early-stage, growth-stage and mid-to-late stages.
Prior to joining GGV, he served as the Managing Director of Haina Asia Venture Capital Fund, and has nearly 20 years of experience in leading venture capital funds and investment banks.
In the past investment career, Xu Bingdong has led the investment of a number of star cases, including JD Industrial Products, Dianxiaomi, Baibu, E-Signbao, Gaiya Factory, PATPAT, MOODY, SOUL, Fauvist, Himalaya, etc., and has in-depth research and unique insights into the Chinese market.
Looking back on 2023, Seo said, "In 2023, my biggest impression is that my inner requirements for staying focused have increased significantly. At this point in time, the investment climate has become more complex. In the past, our focus was often to continue to pay attention to some big outlets and tracks, and do our own investment work, but today we mention "focus", not only focusing on a certain investment direction, but also need to pay attention to more highly relevant areas, in order to cope with changes to make more preparations in advance. In a dynamic macro environment, no amount of thinking and preparation may not be enough. Therefore, when communicating with portfolio companies, we often remind companies to focus on their new products, financial indicators and financing, make all-round preparations and responses, and work together to adapt to the new rhythm. ”
Air Force and mortars of the GGV
At the end of 2020, when selecting the topic after institutional investment, Titanium Media Venture Capitalists had an in-depth dialogue with GGV Zhongtai.
"I have been at GGV Capital for so many years, and our middle office has been contributing value without consuming value, and none of the projects launched have ended without a problem, including LPs, who will also have a sense of our middle office. The person in charge of the middle office of GGV Capital said at the time.
GGV Capital's emphasis on entrepreneurs is reflected in the post-investment system, and the perfect middle office system and high-quality content dissemination are helping the development of invested enterprises to the greatest extent, which is the post-investment value that GGV Capital has always adhered to.
For example, GGV Capital cooperated with PBC School of Finance of Tsinghua University to incubate the OMEGA Entrepreneurship Camp, and invited many senior industry veterans to help entrepreneurs uncover the real experience and experience behind their success, which was well received by entrepreneurs and students.
For example, 220 issues have been released so far, and the original podcast column "Startup Insider", which has been updated from ever, has attracted hundreds of thousands of fans on major platforms, and "Investment Notes", which has released 121 issues, has also run out of traffic that many technology venture capital media cannot reach.
Every time we talk about brand operation, many institutional PRs will mention the middle office of GGV Capital to us, saying that they want to benchmark, but they can't.
No matter how hard the front desk is, it also needs the follow-up of the middle and back office, so as to fully play the advantages of the fund. This is probably related to Fu's early work experience, his first job was as an engineer at Hewlett-Packard, responsible for assembling printers. So he knows it very well. A printer has many parts and requires a collaborative machine with different parts to function.
At a party, Fu Jixun said: "If a unit wants to win, it will definitely be useless to have infantry alone, and no matter how strong the infantry is, it will not work without an air force or mortar." ”
Resilience, travel and home
In 2023, Fu Jixun concluded at the end of the year that in the past few years, we have been in a volatile situation, and perhaps in the next few years, "change" will still be a norm. Whether it is now or in the future, it is necessary to continuously adjust the mindset, manage expectations, and be fully prepared for dynamic changes--- And the key to this is, how to find what is certain in the process of adaptation, or even what is more certain opportunities and directions?
As he looks ahead to 2024, Fu Jixun gave some key words: resilience, travel and home.
He believes that there will still be a lot of uncertainty in 2024, and the best response is to lower expectations, calm down, and gradually observe some changes in the market. Investing needs more resilience.
"In the 'marathon' of investment, if the road conditions are not good, we will abandon excessive illusions, do a good job in a down-to-earth manner, and move forward steadily. At the same time, it is also necessary to maintain a certain degree of persistence, retain inner resilience, maintain the ability to accelerate, and continue to accelerate once we see better market opportunities. ”
再见GGV
With some regrets, "GGV" has become the first brand name of a top investment institution to disappear in the last venture capital era, and the new situation still leaves us with many unknowns: what kind of actions will Granite Asia make in China, what kind of cooperation will it have with GGV Capital, and how will GGV's brand potential, investment team and the strong middle office system behind it continue?
However, there is one thing that everyone who has lived through this era can affirm, we can still choose to believe and expect "GGV", believe and expect Granite Asia and GGV Capital. (This article was first published in Titanium Media Venture Capitalist, author|Zhang Yinan Editor|Tao Tianyu)