Venture Capital Industry in China

Ameline Ervin Florent Baptiste

 Characteristic of VC Market in China
Industries

• 2015: China world's second-largest market

• 2016: Chinese Venture capital got almost equal to the

one of the USA: $50 billion.

• 2017: Plunged to $40 Billion, but China was still

But...
accounting 26% of global VC investments.
- Explosive growth

• 2018: China’s VC market should exceed the US and - Investors coming off the
therefore dominate the world in 2019/2020... ‘burning money

Characteristic of VC Market in China Examples of VC Funds Examples of VC Backed Companies

PRESENTATION OUTLINE
CHARACTERISTIC OF VC
EXAMPLES OF EXAMPLES OF VC-
MARKET IN CHINA (2015-
VC FUNDS BACKED COMPANIES
2019)

VC Market in China Didi Chuxing

Domestic VC Funds
Top China VC Investors JD Health
Foreign VC Funds
Top China VC Sectors Ofo
 Characteristic of VC Market in China
VC Market

2016:

- 275

2018:

- 975

2019:

- 163

Characteristic of VC Market in China Examples of VC Funds Examples of VC Backed Companies

 Characteristic of VC Market in China
VC CHINA versus VC USA

Characteristic of VC Market in China Examples of VC Funds Examples of VC Backed Companies

 Characteristic of VC Market in China
Top China Venture Capital Investors 2015
·

1. Sequoia Capital China

2. IDG Capital Partners
3. SB China Capital (SBCVC)
4. Legend Capital
5. Shenzhen Capital Group Co
6. Capital Today
7. Fortune Capital
8. NewMargin Ventures
9. KPCB China/TDF Capital
10. SAIF Partners

Characteristic of VC Market in China Examples of VC Funds Examples of VC Backed Companies

 Characteristic of VC Market in China
Top China Venture Capital Sectors in 2015

In 2015, most of VCs are focusing on

cutting edge technology:

1. E-commerce

2. Business services

3. Entertainment & Sports

Characteristic of VC Market in China Examples of VC Funds Examples of VC Backed Companies

 Characteristic of VC Market in China
Top China Venture Capital Investors 2019
·

1. PreAngel (61 companies invested)

2. Innovation Works: (4)
3. ZhenFund (45)
4. IDG Capital Partners (36)
5. Zhonglu Group (35)
6. Sequoia Capital (33)
7. Tisiwi (30)
8. Unity Ventures (24)
9. DCM (21)

Characteristic of VC Market in China Examples of VC Funds Examples of VC Backed Companies

 Characteristic of VC Market in China
Top China Venture Capital Sectors in 2019

·
·
Most of VCs are focusing on cutting edge technology:
Enterprise Services:
- AI
- New materials
-
-
Green technology
Smart manufacturing
5%
- Industrial robotics were frequently mentioned Only
- Sciences and biotechnology.

Characteristic of VC Market in China Examples of VC Funds Examples of VC Backed Companies

 Examples of VC Funds
Domestic Funds - Qiming Venture Partners

- Founded in 2006, leading China venture capital firm with

offices in Shanghai, Beijing, Suzhou, Shenzhen, Hong Kong
and US.
- Currently managing seven US Dollar funds and five RMB
funds with over US$4 billion assets under management.
- Top-tier VC firm with outstanding reputation
- Over 554 investments in TMT and Healthcare sectors

Characteristic of VC Market in China Examples of VC Funds Examples of VC Backed Companies

 Examples of VC Funds
Domestic Funds - Qiming Venture Partners

Characteristic of VC Market in China Examples of VC Funds Examples of VC Backed Companies

 Examples of VC Funds
Domestic Funds - Qiming Venture Partners

Amphivena Therapeutics
Amphivena Therapeutics, a subsidiary of Affimed Therapeutics, develops
treatments to address hematologic malignancies.
Total Funding Amount: USD$ 62M

Yunyinggu
Yunyinggu is a Chinese company dedicated to developing and promoting
new display technologies.
Total Funding Amount: CN¥157.5M

Characteristic of VC Market in China Examples of VC Funds Examples of VC Backed Companies

 Examples of VC Funds
Domestic Funds - Hongdao Capital

- Hongdao Capital is a China-based venture capital firm that invests in companies

developing breakthrough technologies in artificial intelligence and life science.
- Founded in 2010 and has made 21 investment

Zhuangxiaomi
Mioji Travel Ofo Hi Shop
(real estate company)
Total Funding Amount: Total Funding Amount: Total Funding Amount:
Total Funding Amount:
USD$ 6M CN¥15M USD$ 14M
CN¥ 2.3B

Characteristic of VC Market in China Examples of VC Funds Examples of VC Backed Companies

 Examples of VC Funds
Domestic Funds - Hongdao Capital

Characteristic of VC Market in China Examples of VC Funds Examples of VC Backed Companies

 Examples of VC Funds
Foreign Funds - Sequoia Capital China

- American venture capital firm

- Located in California, mainly focuses on the technology industry
- It has backed companies that now control $1.4 trillion of combined
stock market value
- Sequoia manages multiple investment funds including funds specific
to India, Israel and China

Characteristic of VC Market in China Examples of VC Funds Examples of VC Backed Companies

 Examples of VC Funds
Foreign Funds - Sequoia Capital China

Aims to assist daring founders build legendary companies

Has worked with > 500 companies in China over the past 14 years
Focused mainly on 4 sectors:

Industrial
TMT Healthcare Consumer/Service
Technology

Characteristic of VC Market in China Examples of VC Funds Examples of VC Backed Companies

 Examples of VC Funds
Foreign Funds - Sequoia Capital China

Characteristic of VC Market in China Examples of VC Funds Examples of VC Backed Companies

 Examples of VC Funds
Foreign Funds - Sequoia Capital China

Characteristic of VC Market in China Examples of VC Funds Examples of VC Backed Companies

 Examples of VC Funds
Foreign Funds - Sequoia Capital China

- Dami Wangxiao is a unit of Chinese education company VIPKID.

- Sequoia Capital China has invested around USD$80 million as of 20 Jan
2020

- Adagene (Suzhou China) is a clinical stage biotech company with innovative

antibody discovery and engineering technologies.
- Sequoia Capital China has invested around USD$69 million as of 9 Jan 2020

Characteristic of VC Market in China Examples of VC Funds Examples of VC Backed Companies

 Examples of VC Funds
Foreign Funds - GGV Capital

- GGV was established nearly two decades ago in Singapore and Silicon
Valley
- Invested in Alibaba, Grab, TikTok, Youku-Tudou and more.
- Quickly established themselves as a global firm with five offices
around the world.
- Today GGV is expanding their global footprint with investment
roadmaps across the US, Latin America, Israel, Southeast Asia, China
and India, growing to manage 13 funds with over $6.2 billion AUM
(with $5bn raised this decade).

Characteristic of VC Market in China Examples of VC Funds Examples of VC Backed Companies

 Examples of VC Funds
Foreign Funds - GGV Capital

Characteristic of VC Market in China Examples of VC Funds Examples of VC Backed Companies

 Examples of VC Funds
Foreign Funds - GGV Capital

Mogulinker Technology
Mogulinker Technology is a domestic SaaS software provider specializing
in the post industrial equipment market.
Total Funding Amount: USD$ 3M

Ehang
Ehang is a technology enterprise focused on R&D and production in airplane and
aircraft field.
Total Funding Amount: USD$ 40M

Characteristic of VC Market in China Examples of VC Funds Examples of VC Backed Companies

 Examples of VC-Backed Companies

Characteristic of VC Market in China Examples of VC Funds Examples of VC Backed Companies

 Examples of VC-Backed Companies
Didi Chuxing

Didi Chuxing
- Mobile transportation platform, offering a full range of
commuting options to 400 cities in China
- Raised about US$13.8 Bn to date
- Deal with Toyota Motor Corporation involved a JV to provide
vehicle-related services to drivers on DIdi’s ride sharing platform
- Biggest Investor: China Merchants Bank

Characteristic of VC Market in China Examples of VC Funds Examples of VC Backed Companies

 Examples of VC-Backed Companies
Didi Chuxing

Characteristic of VC Market in China Examples of VC Funds Examples of VC Backed Companies

 Examples of VC-Backed Companies
JD Health

JD Health
- E-Commerce Platform for Pharmaceutical Products
- Subsidiary of e-commerce giant JD.com
- Ranked the most valuable among 22 new unicorns in 2019
- Market size of China’s online healthcare industry: ~RMB 20.4 BN
(~ US$3Bn) in 2019 (iResearch)
- Completed a US$1 Bn funding round in November 2019, at a
US$7 Bn post-money valuation
- Investors include: CPE China Fund, CICC Capital

Characteristic of VC Market in China Examples of VC Funds Examples of VC Backed Companies

 Examples of VC-Backed Companies
Ofo

Ofo
- “Station-Free” Bike-sharing platform
- Dockless system uses an app to unlock & locate nearby bicycles,
charging an hourly rate for use
- Deployed over 10mm bicycles in 250 cities & 20 countries
- Company was valued at up to US$2 bn, with over 62.7 mm
monthly active users
- In 2018, Ofo announced massive reduction in operations,
including withdrawing from several countries like US and SG
- Declared Bankruptcy in December 2018

Characteristic of VC Market in China Examples of VC Funds Examples of VC Backed Companies

 Examples of VC-Backed Companies
Ofo

Characteristic of VC Market in China Examples of VC Funds Examples of VC Backed Companies

 Venture Capital Industry in China
Conclusion

● China’s competitiveness encourages many entrepreneurs to set up their startups

● The amount of investments going into China shows investors’ confidence in the Chinese Start-Up
industry BUT
○ Even if investors are encouraged by the Chinese market as well as the ideas provided by these
companies, it is important for investors to have a clear matrix and to understand their risk
tolerance when evaluating investment decisions

● Ultimately, what everyone wants to have investments like Didi and JD, and not Ofo.

Characteristic of VC Market in China Examples of VC Funds Examples of VC Backed Companies

Thank you!
Q&A