GGV Capital: Investing in Internet thinking and investing in trans-boundary thinking

Newspaper reporter Pan Shanghai Report

"In the past, RMB fund investors look at the project, look at the history of the enterprise, and especially the financial performance." And I now feel that the most important thing for investors is to be able to answer what the industry looks like in 35 years. In raising money, we first communicate with the LP, Our future investment in several areas, five years later, these areas will look like. "said one renminbi fund partner privately.

The pace of mobile Internet expansion has been staggering in the past few years, and even investors who saw it early may not have expected it to expand so fast; the impact of the mobile Internet on traditional industries is also unexpected.

When RMB funds are completely killed to TMT early investment, mobile internet projects; When many investors believe that the consumer internet as a hot spot has passed, the industry's internet opportunities are ahead, another era may come: the Internet may no longer be an independent industry, but will go into all aspects of traditional industries.

So, the question is: How do the TMT industry's investors and the traditional industry investors look at the future? And what will be the answer? As one of the best dollar fund investment institutions--GGV Capital is also expanding the renminbi fund investment business, in its investment in the process of dual-line operations, what kind of experience?

The 21st century Economic report interviewed Donshau and Uli, two partners in the capital, who were representatives of dollar funds and renminbi funds. Uli believes that the future of information technology and intelligent technology will be closely combined, many so-called traditional industry technology will also blend, so investors need cross-border thinking, and the famous investment in millet technology Donshau is clear that the future mobile Internet impact on traditional industries, will be by the people with Internet thinking, To learn the traditional industries and upgrade the traditional industries.

In addition, Donshau bullish on China's Internet technology to sea, he believes that the next decade, China's internet industry is the great sailing era, the Chinese Internet will go to the third World countries to Europe and the United States to go.

Dollar funds: Investing in Internet thinking to transform traditional industries

Donshau is one of the first investors to see wireless internet trends in China. As early as April 2011, he told the newspaper reporter, he observed that the current market has less than 1000 yuan of smartphones, and very useful, and said: "The second half of this year, the cottage version of the smartphone will come out." Whether the Shanzhai smart machine can stabilize and smooth the Internet, determines if the market can explode quickly. ”

At that time, Donshau has invested in millet technology, perhaps investment he did not expect, just three years later in the 2014-year two quarter, the Millet mobile phone in China's mainland shipments up to 14% of all smartphones, a swoop beyond Samsung, sat on the Chinese smartphone market share of the head of the number. In the latest report, the latest valuation of millet technology is said to have reached $40 billion trillion.

In the process has let the industry stunned the cottage machine, failed to successfully upgrade into the era of smart phone. Finally, the mainstream handset manufacturers such as Huawei, Millet and so on, with a stable smartphone with a quality of less than 1000 yuan, have expanded aggressively in mainland China, beating off a smartphone, and quickly killing offshore pools and grazing land.

All this confirms the wise layout of Donshau three years ago: Donshau also worked in Shanghai in 2011, and when he saw the trend of mobile Internet, he simply moved to Beijing to work in order to invest in wireless internet companies – a time when Beijing emerged with a large number of entrepreneurial companies trying to make nuggets on the wireless internet, such as the Alliance. Donshau also encourages other companies to be invested like the leeches, a hi car rental, a rebate network quickly overweight the introduction of wireless Internet applications. This also includes encouraging millet to enter the Low-cost mobile phone market, rather than such as mobile phones in the 2G era, the majority of the domestic handset brand life.

Until 2014, China's PE, VC institutions nationwide Investment mobile interconnection industry, almost everyone shouted "bubble", then has been transferred to the Donshau Capital as a management partner, but also agree that some enterprises are too high valuations, but his pace of investment has not slowed down, still quick to invest a lot of such enterprises, His logic is still to talk about hardware first.

"By the end of the year, global smartphone ownership will reach 1.5 billion, with China and the US adding up to nearly 1 billion." I think mobile interconnection is a revolutionary change, not just an extension of the Internet. 2005, the global Internet users also 1 billion people, when the value of Alibaba was about 5 billion dollars, when Yahoo invested it, many people said the valuation is too high, and by the end of this year, the world with computers and mobile internet users close to 3 billion people, Alibaba's market value of up to 250 billion U.S. dollars. In terms of trends, in the third World countries, Do Shewa for Millet and so on, the popularity of smartphones will be much faster than the computer; global ftns operators are less efficient than mobile operators, and internet users worldwide borrow Low-cost smartphones, expanding from 3 billion to 4 billion or 5 billion of the time will be less and less. By analogy, the impact of mobile Internet on traditional industries will be much greater than the impact of the PC Internet age. ”

And in Donshau's view, over the next decade, China's internet industry is not only mobile phones, but also the output of the Internet model: "The U.S. internet industry is stronger than social products, stronger than advertising revenue-related businesses, more and more accurate matching ads, such as Yahoo, Google, Facebook, Twitter." But users in China and other developing countries don't advertise when they use these sites. Therefore, companies relying on trading platforms and virtual products, mobile Internet tools, such as Alibaba, Tencent, Cheetah, UCWeb, Qihoo, and so on, in the third world countries will have greater development. ”

Based on this, Donshau announced his investment in Cursevoice this June. Its development model and GGV in domestic investment yy has a similar place, are from the subdivision media into vertical voice social. And after joining the GGV last year to invest in San Francisco's Cross-border electric dealer Cytopathic: "This is like the 66th century great sailing era, some Western countries discovered the new world, with a broad overseas market, then do not have to fight in the Western European market badly." Today, many internet companies in China can explore the third world through the wireless internet. Many of the domestic internet segmentation industry has become the Red Sea, many enterprises in the domestic playing very hard, after going out there will be many opportunities. As a result, however, the patterns and trends of an enterprise become more important, not all models are suitable for sailing. ”

Cytopathic is a service for small and medium-sized manufacturing companies in China to help them sell their products directly to the masses of consumers abroad – originally, by overseas traders importing goods from China and then selling them to ordinary consumers through retail companies such as Wal-Mart, where Cytopathic is omitted. Cytopathic's expansion over the last 11 months was faster than it had expected before Donshau investment.

Donshau's second investment was O2O, including the FlightCar, which recently announced investments in the United States. He has been constantly emphasizing to journalists that mobile internet will subvert many traditional industries. His third investment is the internet of things, optimistic about the combination of hardware, software, service applications, can make data analysis enterprises. And the "Millet ecological chain Company" mainly. Before, Millet Technology chairman Lei invested more than 20 enterprises, these enterprises, Donshau also participated in some investment: "Millet is very smart in supporting a group of companies can combine hardware and software, they began to paste the brand of millet, millet through the channel to sell products in line with the needs of millet users; These companies will also have their own brand products, sales in various channels. ”

Recently, Lei publicly mentioned that Millet has become after Alibaba, Jingdong, the third largest electric business company. and said "I am willing to replicate 100 millet in the next 3-5 years, to drive the transformation and upgrading of the entire traditional industry", and examples of millet-charging manufacturer of purple rice technology and millet headphones, the two companies, the former last August sales remained zero, the latter this year in the product line, but this year, two companies sales, Estimated at 1.5 billion and 1 billion yuan.

Donshau that millet technology is the mobile phone this hardware as the entrance, now it has become a platform, and then it will be the way the millet mobile phone replication, it is to create an ecological chain. And, in this way, it is possible to replicate in other traditional industries.

"The impact of the Internet and mobile Internet on traditional industries is a manifestation of vertical companies," he said. The first shocks were mainly retail, 3C, finance and education. This vertical internet company needs people who have both internet thinking and traditional industries but it will be the Internet people to dominate, because the Internet people to learn the traditional industry, can easily find inefficient areas of traditional industries, and think of solutions, and the traditional business people will be accustomed to these inefficient places. Moreover, only people with internet thinking, to do the traditional industry, just know what as a portal, how to make a platform, or even make an ecological chain. The valuations of these companies are different. ”

So, when investing in vertical internet companies, Donshau wants to be a person who invests in internet thinking to dominate changes in traditional industries.

RMB funds: Investing in traditional industries with Cross-border thinking

In the first half of 2014, GGV Capital RMB two funds to complete the fund-raising. The fund eventually raised 800 million yuan, of which the Yuan Wo-kun (formerly Xuzhou Venture Capital) of the parent fund invested nearly 200 million yuan, and the Yuan Wo-kun is also a ggv of the renminbi one phase of the LP. In addition, GGV Capital partner Uli disclosed that there is also a part of the government funding.

For the past two or three years, renminbi funds have been more difficult to raise than dollar funds. Uli also said that although the end result is still available, there are still some problems with mature institutional investors in the fund-raising market of RMB funds. He said that in the past two years the industry predicted that China will have a lot of parent funds to appear in the future, it appears that the parent fund is not entirely in the form of market-based FoF, many government-led funds in this field is very active, but also very professional.

In the process of fund-raising, Uli ponder the deepest question is: The comprehensive fund is good, or special industry funds good? Probably in 2011 PE industry hottest, PE industry has appeared some special industry funds, such as cultural industry funds, consumer funds, mining funds, clean Technology Fund. In the 2013, special health or health-care funds were everywhere, and many dollar funds were almost a TMT fund.

Uli said: "Today, in addition to the TMT industry is big enough, and the industry itself in rapid development, health care industry is not cyclical industry, other industries because of their own volatility, may not be so suitable for a special fund; so it seems better to make an integrated fund for the portfolio. The second may be more important, and many future technologies will appear as ' Cross-border '. ”

Uli A recent project, "Rehabilitation robot" for example: "The robot can help patients with neurons that are not completely paralyzed, such as one whose calf is paralyzed, but the thigh muscles can move, and the sensor can predict the movements of his thighs and help him move his limbs. This looks like a typical medical project? But it does not need the state administration of Food and Drug Administration certification. Moreover, it can be used in other areas, such as the on-site ambulance for fire brigade, which is equivalent to the extension of human ability, can make firefighters like fighters. ”

Uli also observed that recently he had seen the same project with TMT colleagues more than once, but that the source of their project was not the same. Uli Analysis: "For example, a smart home project, I am more concerned about the hardware, to see the smart door locks, switches, sweeping robots and other technologies, and the Internet to see the project, his angle may be: whether it can be made platform, data, and then to see the hardware." These two areas are easier to communicate when they are in a team. ”

Uli's current area of interest is industry 4.0, the vision is that the future of people and machines, machines and machines will be connected by the Internet: "We can imagine a scene where someone is now designing a piece of clothing on a computer, and then the factory doesn't need drawings and proofing, it's connected through some kind of connection, Automatic control of the production workshop, the required materials ready, and in accordance with the design of the manuscript automatic production. ”

In other words, Industry 4.0, is a highly integrated information technology and intelligent technology, it is not only the combination of software and hardware, but also related to information technology, high-end manufacturing, IoT and other concepts, so it is a typical Cross-border project.

When asked who will dominate these cross-border projects, "The combination of TMT and other industries is often ultimately invested by TMT, because TMT investors tend to be more willing to give high valuations and because a star case can yield dozens of times times, a hundredfold or even higher returns," says Uli. They are more willing to tolerate failure and therefore more willing to take greater risks; but another angle, if such a project develops to the back, the investment enterprise needs not the money but the traditional industry resources, then understands the traditional industry, has the traditional industry resources the investor to have the bigger advantage. ”

The aforementioned rehabilitation robot, which will eventually be a medical project or a high-end manufacturing project, Uli replied: "That depends on the technology, in which direction the market prospects are better and users are more willing to pay for it." ”