Leading Chinese investors see opportunities in startups amid a changing environment
BEIJING, August 8, 2022 /PRNewswire/ — WeiZhou, the founder and managing partner of venture capital firm CCV, recently told a GoldmanSachs panel that his firm will increase its focus on deep tech China and Chinese startups with global potential.
Former Managing Partner at Kleiner Perkins Caufield & Byer’s China, Wei is one of China’s top tech investors with a 15-year track record of investing in at least one unicorn company per year. Its portfolio includes China’s largest B2C e-commerce, JD.com, and CreditEase (NYSE: YRD), the first Chinese fintech to go public overseas.
China will continue to expand its domestic high-end manufacturing supply chain, leading to natural growth of local hard-tech companies, Wei said at the Goldman Sachs TechNet Conference Asia Pacific 2022.
Wei’s prediction reflects the Chinese government’s 14th Five-Year Plan (2021-2025), which has made advanced manufacturing modernization a top priority.
The latest data from the China Association of Automobile Manufacturers showed that China’s auto exports rose 73% month-on-month in May, hitting a record high for 2022.
When asked about the trend of government regulation in the tech industry, Wei said regulation has impacted platform companies as the government tries to combat monopolistic behavior.
However, according to Wei, entrepreneurs and investors are not moving into deep tech because of policies or tightened regulations. “The supply chain for high-end manufacturing is mature.”
He said changing market conditions would steer CCV’s investment strategy to focus heavily on startups in advanced AI, fintech, autonomous vehicles and robotics. He said the company would invest more in “3A companies,” meaning affordable, accurate and advanced companies. Currently, the market is changing from “3D companies”, ie boring, dirty and dangerous, to “3A companies”.
CCV has a good track record of investing in the zero labor economy. It has invested in various robotics companies in various application areas including logistics, sanitation and agriculture. The company has invested in AI Force, an agricultural autonomous driving company, Multiway, China’s leading manufacturer of multidirectional forklifts, and Cowa Robots, one of the first L4 autonomous vehicle companies China.
Another important focus is on Chinese entrepreneurs with global potential.
“The abundance of talented Chinese entrepreneurs branching out abroad is a key area I’m focusing on,” Wei said. “Chinese companies have done well overseas, but as automation and artificial intelligence become more important in China’s domestic economy, there will be plenty of room for new business ventures to grow globally. Therefore, we will expand our portfolio of Chinese startups with international potential. “
Internationalization was one of the key investment themes for the CCV team. Wei was one of the first investors to partner with CreditEase (NYSE: YRD), the first Chinese fintech company to go public overseas, and Rong 360 (NYSE: JT), a provider of customized financing and credit services. In addition, CCV also partnered with Perfect Corp, a leading SaaS beauty tech company focused on AR and AI e-commerce business solutions, in the early stages.
Palmpay is expected to be the next Nubank Africa, is a Transsnet spin-off with a deep understanding of the African market and fintech expertise from Alipay. It’s another example of Chinese companies developing businesses around the world, Zhou says.
CCV is one of the leading venture capital firms for early-stage deals in China. Founded by the former Managing Partner of KPCB China ZhouWei and managed the original technology investment team at KPCB $750 million and 2.5 billion yuan.
With the mission “Creating new world, side by side”, CCV focuses on discovering early-stage investment opportunities in zero-lab technology, digitization and globalization of Chinese entrepreneurs.
The CCV team has maintained a 35% unicorn hit rate and has maintained a record of acquiring at least one unicorn project per year, and many of its portfolio companies have become the first IPO stocks in their focus areas. CCV is the leading investor in the A round for 80% of investment deals.
CCV’s portfolio companies include JD.com (Nasdaq: JD), the first stock in B2C e-commerce, Venus Tech (002439), the first cybersecurity company to go public ChinaCreditEase (NYSE: YRD), the first Chinese fintech company to go public overseas.
Rong 360 (NYSE: JT), Tantan (acquired by Nasdaq: MOMO), JD Digital, Ximalaya FM, Shukun Technology, Perfect Corp, Transsnet Financial, MetaApp, UPower, Cowa Robot and Naxions are also on CCV’s list of portfolio companies.
its founder, Weizhou, is one of the most successful Chinese venture capitalists in the technology space and former managing partner at KPCB China. He was honored as Fortune’s Most influential venture capitalist and a Leading Chinese venture capitalist from the Financial Times.