13 years ago, the unpopular track paid off a hundredfold! Ji Chunjun, founding partner of Weigao: Early investment is willing to bear technical risks

On October 27, Jingjin Electric, a supplier of motors and power systems for new energy vehicles, officially landed on the Science and Technology Innovation Board. As early as the year of the establishment of Jingjin Electric, Weigao Venture Capital invested 900,000 US dollars and became one of the early investors of Jingjin Electric. Why did you invest in Jingjin Electric more than 10 years ago when the new energy automobile industry was still unpopular? What tracks will early investment focus on? What are the considerations for laying out SPAC at the beginning of this year? In this regard, the Securities Times reporter recently interviewed Ji Chunjun, the founding partner of Weida Venture Capital.

In Ji Chunjun's view, compared with market risk, early investment is more willing to bear technical risks, and technical risks can rely on academic experience and industry experts to measure whether they are controllable, while market risks rely more on luck.

"At that time, the market did not have the concept of new energy vehicles, countries only had some requirements for automobile air pollution emissions, and the market considered the most was to replace oil and gasoline with hydrogen and solar energy." Ji Chunjun told reporters, "We considered that no matter what form of energy, the drive is electric, so we invested in this track that seemed to be unpopular at the time." ”

Talking about early investment: Invested in an unpopular track company 13 years ago

In 2007, Jingjin Electric founders Yu Ping and Cai Wei came up with the idea of returning to China to start a business in the United States, and Weida Venture Capital, which was established for only two years, learned of this news, rushed to Long Island in New York to meet with the two founders to understand the entrepreneurial plan, and made an investment decision a few months later. In 2008, Jingjin Electric was officially established, and Weigao initially invested 900,000 US dollars, becoming one of the earliest investors of Jingjin Electric.

Over the past 13 years, Weigao Venture Capital has invested several million dollars in the fine electric power, and as of now, the total return rate has exceeded 100 times. It is reported that when Weida Venture Capital first invested in Jingjin Electric, the company's valuation was less than 5 million US dollars, that is, about 30 million yuan, and as of the close of the first day of listing, the total market value of Jingjin Electric had exceeded 10 billion yuan.

Founded in 2005, Wegodon Ventures has been focusing on early-stage investments in the Asia-Pacific region and global markets, but the track of focus is not static. In the first 10 years of its establishment, the investment direction of Weigao Ventures was mainly in the field of asia-Pacific consumption power improvement, investing in some game companies and Internet companies.

"About 6 or 7 years ago, the investment direction of Weigao Venture Capital changed greatly." Ji Chunjun told reporters, "The reason is that 10 years of investment experience tells us that investment risks can be roughly divided into two categories, one is market risk, whether the market will pay after the launch of new products, this risk is more difficult to predict, unless the entire track is invested, which becomes a project track rather than an investment enterprise, otherwise there is great luck to succeed; the other type of risk is technical risk, some technologies can solve practical problems, but whether the technology is mature and whether it can be mass-produced is also risky." At that time, we realized that technology risks could be controlled by academic experience and industry experts, unlike market risks, which could only rely on luck, so the investment direction shifted to hard technology. ”

According to Ji Chunjun, following the launch of Jingjin Electric on the Science and Technology Innovation Board, a biomedical company invested by Weida Venture Capital plans to land on the NASDAQ in the first quarter of next year.

"In the 16 years since its establishment, Weigao Venture Capital has invested in five or six projects every year, with a total of 70 or 80 projects invested, and some projects have been exited through listing, mergers and acquisitions." Ji Chunjun said.

Talking about SPAC listing: The mainland capital market should not be launched in the short term

As an early investor, Weida Ventures began to lay out SPAC last year, and its founded SPAC, Vickers Vantage Corp.I, was listed on the NASDAQ market at the beginning of this year, and is currently looking for high-quality and mature mergers and acquisitions.

Ji Chunjun revealed to reporters that the target of the merger is expected to have news within a month, "After the completion of this single merger, the second single SPAC listing will be launched next year, Singapore has introduced relevant rules and is more friendly, and the second SPAC of Weida Venture Capital will be listed in Singapore, and the time is about the beginning of next year." ”

Talking about the characteristics of the SPAC listing mechanism, Ji Chunjun said that the actual listing is a shell company, and then find the target company to load into the listed company, this process belongs to mergers and acquisitions, "for the enterprise listing process, the SPAC model belongs to an interesting institutional innovation, the merger and acquisition process is negotiation, unlike the traditional listing requires investment banks and investors to inquire, etc., so as to avoid various uncertainty risks in the listing process, which is favored by listed company investors, corporate shareholders and enterprises." ”

SPAC, which originated in Canada and ushered in explosive growth in the US securities market, has not only won the favor of venture capital institutions, but also the exchange. "SPAC has become the mainstream listing model in the United States, and the data shows that nearly 80% of the listings in the United States this year are in the form of SPAC, and any exchange will be moved to see this phenomenon." Ji Chunjun said.

In September this year, the Hong Kong Stock Exchange issued an SPAC listing mechanism for market opinion. "This shows that the Hong Kong Stock Exchange is still interested in the SPAC market." Ji Chunjun said, "However, from the perspective of the consultation terms, the feedback from the industry does not feel too friendly, and when Singapore consulted in April this year, the market also felt that there were some unkind places, so it gave feedback to the exchange, when it was officially announced in September, the rules were still good, and the next step depends on the final clear rules of the Hong Kong Stock Exchange, which is still optimistic." ”

The chairman of the CSRC, Yi Huiman, mentioned in September this year that the SFC continues to pay attention to the SPAC model, is it eligible in every market? This requires further follow-up and research.

"The mainland capital market should not consider SPAC in the short term, after all, there are still many enterprises in the mainland that are queuing up to apply for IPO listing, and it can be said that there is no shortage of listing targets in the mainland capital market." Ji Chunjun said.

In Ji Chunjun's view, whether it is the Hong Kong Stock Exchange or the Mainland Stock Exchange, from the perspective of the market, the core issue of whether to adopt the SPAC model for listing is whether the M&A listing process is simplified, "The reason why the SPAC model has developed rapidly in the United States is that the M&A process and rules in the United States are much more convenient than listing, while in China, reverse mergers and backdoor listings are regarded as listings, and they do not have an advantage in rules and processes. ”

Ji Chunjun also said that the establishment of the Beijing Stock Exchange, from the perspective of venture capital, there is more than one exit channel, the Beijing Stock Exchange can be seen as an upgraded version of the new third board, the main problem of the new third board is poor liquidity, liquidity can be perfected does not depend entirely on the rules, but also depends on whether there are high-quality assets, "For the Beijing Stock Exchange, how to attract high-quality assets to list, to create the exchange's own selling points, the future is crucial." ”

Talking about the US dollar fund: Long-term optimism about China's economic development

In the 16 years since its inception, Mega Ventures has successfully raised and managed six US dollar funds and one RMB fund with more than US$3 billion under management.

Since the beginning of this year, under the rectification and supervision of China's Internet, education and training industries, it has become difficult for relevant enterprises to go public in the United States in the short term, which has brought greater impact on the withdrawal of US dollar funds investing in domestic enterprises.

Talking about the current dilemma faced by the US dollar fund, Ji Chunjun revealed to reporters that in the past two years, the process of Weida Venture Capital US dollar fund investment in domestic projects has been slow, "The investment committee looks at the project globally, from the perspective of valuation and risk, foreign projects are still slightly dominant, so after the introduction of relevant policies, Weida Venture Capital US dollar fund has been less affected." ”

"Of course, individual industries do have some risks, such as school training institutions, Weida Venture Capital invested in some online education companies in the early days, but our style is not to directly invest in 2C enterprises, usually invest in the supply chain to support 2C enterprises, that is, platform companies, in the education and training industry rectification of the storm, the investment of enterprise customers are affected, but the platform can do some customer transfer." Ji Chunjun said.

From a long-term point of view, Ji Chunjun is not too worried about the Chinese projects he has invested in, "China's economic development is still very optimistic, and a big advantage of the VC market compared with the stock market is that it is not listed, so it is not subject to market fluctuations, as long as there is patience to do a good job, there will still be opportunities." ”

At present, the sixth us dollar fund that Weida Venture Capital is raising has raised $250 million by the end of last month. At the same time, the second phase of the RMB fund of Weida Venture Capital has also been officially raised, and it is revealed that it is in contact with the medical industry guidance fund of local governments, and intends to focus on the linkage of recruitment and investment to help local governments introduce promising projects from abroad.

"The general direction of investment is still hard technology, when Weigao Venture Capital is looking for a project, it is willing to bear technical risks, but it is not willing to bear market risks, because technology can solve problems in some areas, as long as the technology is good, do not worry about whether there is a market." Ji Chunjun said, "At the same time, Weida Ventures is also focusing on investment in ESG and other aspects, and has invested in a Canadian geothermal company, which has been followed by Temasek and BP. ”