Author: Wu Meimei Editor: Judy
Source: IT Orange
Sequoia Capital China has become one of the top domestic investment institutions, and the public is already familiar with its investment in startups, achievement of unicorns, and achievement of listed companies. In the VC circle, this is its identity as a GP (general partner).
relatively little known is that Sequoia China has actually been investing in "other investment institutions" and becoming the investor (LP/Limited Partner) behind other GP institutions.
Sequoia China's earliest LP production should be traced back to the founding of Zhen Fund, which was around 2011. According to the official introduction of Zhen Fund, Zhen Fund is angel investment fund co-founder New Oriental , Xu Xiaoping , Wang Qiang and Sequoia Capital China. Since then, Sequoia China's LP career has not stopped.
In recent years since the epidemic in 2020, Sequoia China has become more and more skilled in making LPs. Many investment actions have been exposed, including investing in a new fund founded by Cao Xi, former partner of Sequoia China, Qijichuangtan founded by Lu Qi, and Songshan Lake Robot Fund founded by Professor Li Zexiang .
Through research, it was found that Sequoia's actions in recent years still have some logic to follow when it comes to becoming an investment institution LP.
Invest in an institution focusing on blockchain and digital economy
In April 2022, crypto asset investment fund Dragonfly Capital announced that it had raised US$650 million for its third crypto fund "Dragonfly Ventures III". Limited partners (LPs) include global investment giants Tiger Global, KKR and Sequoia China.
Dragonfly Capital was founded in 2018 by Feng Bo, founder of Ceyuan Venture Capital. Another founding partner is Alexander Pack, former head of network business investment at Bain Capital .
It is reported that Dragonfly Capital will focus on three investment directions in the future: as a parent fund to invest in new crypto asset management funds; investment may become the basis of a decentralized economy; and support technology startups that can connect the decentralized and centralized worlds.
IT Orange data shows that in the first nine months of 2022, Dragonfly Capital has invested in 43 blockchain and related projects, and is very active in its efforts.
It is worth noting that an important intersection between Dragonfly Capital and Sequoia China in the blockchain project is Animoca Brands. The two parties jointly participated in Animoca Brands' $50 million investment in October 2021, and then Sequoia China continued to raise and follow up.
In September this year, Animoca Brands once again received a new investment of US$110 million, and was sought after by first-tier capital such as Temasek , GGV, and became a new blockchain game unicorn.
Investment and Successful IPO Project
On March 17, 2022, Rockets Capital, as the strategic cornerstone investor, announced the completion of the first round of the first US dollar fund closure, with the fundraising amount exceeding US$200 million. Other LPs include top investment institutions such as IDG Capital, eGarden, Sequoia China, Wuyuan Capital and Jiyuan Capital .
Starhang Capital was established in early 2022. The fund focuses on investment opportunities in the fields of smart electric vehicle industry chain, clean energy and cutting-edge technology, focusing on early and growth stage targets.
Xiaopeng Motors itself is also a invested project of Sequoia China. In July 2020, Sequoia China participated in Xiaopeng Motors' US$500 million C+ round financing.
In fact, Sequoia China has made a lot of investment in the electric vehicle field in recent years, including NIO , WM Motor , Leapmoto , Xiaopeng Motors, BYD , and Luoke Auto, all of which have received investment from Sequoia China, and the two-wheeled car brand Niu Electric is also an investment project of Sequoia China.
So, Sequoia China invests in supporting Star Airlines Capital, which is also using another form to promote the development of the entire electric vehicle industry chain.
Investment Sequoia's former partner and a new fund founded by the industry giant
On November 26, 2021, Cao Xi, former partner of Sequoia Capital China Fund, officially announced that he would jointly establish an investment management institution - Monolith Management, with former Boyu Capital's secondary market partner Tim Wang.
Monolith Management is a technology hedge fund . It follows the research-driven investment philosophy and will deepen the secondary market investment in technology, software, life sciences and consumption driven by technology and innovation, as well as some primary market growth projects.
Monolith's initial fund size has exceeded US$500 million, and it has received oversubscribed beyond the original target size. It is understood that four top domestic first-tier venture capital institutions, including Sequoia China, , three 100 billion US dollars in US dollars and their founders, 12 100 billion US dollars in new economy and their founders, as well as some famous family offices and university endowment fund , all of which provide investments for Monolith.
Cao Xi has worked in Tencent and Kingsoft Software . In 2013, he joined Sequoia Capital as a partner of Sequoia China Fund, and led the investment in well-known projects such as Kuaishou, Hero Entertainment, Douyu , Dongqiudi, Super Orangutan , Quantum Sports, etc.
Currently public information shows that Monolith has only taken action once in the past six months, and is involved in the B round of Yitai Pharmaceuticals financing of US$150 million.
Technology early investment fund founded by big names in the investment industry
In March 2021, SEE Fund Unlimited Fund completed the first fund fund fund fundraising of 200 million yuan. The LP lineup includes Sequoia China, Hillhouse , Jingwei China , CPE, Zhen Fund, etc., as well as Tsinghua-based institutions and industrial institutions with industrial backgrounds, such as Tsinghua Holdings and ByteDance.
SEE Fund was founded in 2020 and focuses on the field of hard-core technology. The fund focuses on the fields related to Tsinghua electronic information, and aims at early projects in the three sub-tracks of "semiconductors, pan-electronic information technology and industrial Internet". Each period of the fund will invest in about 10-15 high-quality projects before the Pre-A round, with the goal of building a ecology of hundreds of companies within five years.
Unlike other institutions, SEE Fund was initiated by Yao Song , the former founder and CEO of "Shenjian Technology". Shenjian Technology focuses on deep learning processor solutions, and is provided by Tsinghua University and the Department of Electronic Engineering. During his time at school, Yao Song started his business in the form of co-creation of teachers and students, and received in-depth incubation and support from Tsinghua University .
founding partners have an industry background and experience accumulation, which is one of their major advantages. In addition, they have also received support from Tsinghua Capital. It is not surprising that Sequoia China can enter such a new fund.
Similar situations are Qijichuangtan and Qingshuiwan Capital. The founders of these two institutions, , Lu Qi and Li Zexiang, are both industry celebrities, and their operating model is the relatively incubated angel investment service.
In August 2022, Dongguan Qingshuiwan Phase II Venture Capital Partnership (Limited Partnership) was officially established. The executive partner is Zhuhai Yuewan Huasheng Fund Management Co., Ltd., and is jointly held by Shenzhen Tencent Industrial Investment Fund Co., Ltd., , Sequoia Jingyao (Xiamen) Equity Investment Partnership (Limited Partnership), Dongguan Industrial Investment Fund Co., Ltd., Li Zexiang and others, with a registered capital of RMB 536 million. Zhuhai Yuewan Huasheng Fund Management Co., Ltd. is also the executive partner of XBOT PARK Fund.
Li Zexiang's famous case is the unicorn DJI. In addition, it has also invested in incubated robot unicorns such as Yunjing Intelligence and Hairou Innovation.
According to industrial and commercial information, on March 13, 2020, Beijing Qiji Chuangtan Phase I Venture Capital Center was officially registered and established; on June 9, the entity added several new shareholders, including Suqian Xindongteng Business Service Co., Ltd., Suqian Tianqiang Equity Investment Partnership (Limited Partnership); and two investment entities of Sequoia Capital - Shenzhen Sequoia Jiatai Equity Investment Partnership and Sequoia Jingshi (Xiamen) Equity Investment Partnership.
Qijichuangtan's predecessor was YC China, founded by Dr. Lu Qi in 2018.Lu Qi is also a professional manager of . He has served as the global executive vice president of Microsoft and the president of Baidu Group. He has many years of management and practical experience in well-known companies.
In 2018, Lu Qi left Baidu and turned to his investment career, joined YC as the founder of China, and then established an independent brand Qiji Chuangtan. Lu Qi's influence and the early investment model of Qijichuangtan's re-incubation are both points that hit Sequoia China.
In fact, according to IT Orange data, in more than a year after becoming an LP, Sequoia China (including Sequoia China Seed Fund ) is also becoming one of the most frequent partners of Qijichuangtan. They have invested in projects as many as 7 times. For example, the seed rounds of the company "Beteng Bio" in the synthetic biology field are Sequoia China Seed Fund and Qijichuangtan Investment, and Sequoia China then invested in its angel round; Zion's Pre-A round is also jointly invested in Sequoia China Seed Fund and Qijichuangtan.
Invest in a well-known early-stage venture capital institution
On March 31, 2021, Qingsong Fund announced the completion of the "Qingsong Phase IV Fund" fundraising, with a scale of 1 billion yuan. The LP mainly includes Shenzhen Guidance Fund, Times Publishing Media Co., Ltd., Sequoia China, Tencent, etc. The new fund will continue to focus on early and mid-term venture capital in new technologies and new consumption fields.
Qingsong Fund was established in 2012, and its main investment directions are big consumption and technology. As of now, Qingsong Fund has managed 6 funds with a total amount of over 3 billion yuan.
Consumption investment may be a sector where Sequoia China invests relatively little, while Qingsong Fund still has some achievements in this regard. The DaDa English it invested in was acquired, and the unicorns that were invested in in the early stages include Wedding Ji, Squirrel AI, etc.
Overall, Sequoia China, as an LP investing in these funds, mainly early-stage investment institutions, and some even just started, Sequoia China participated in the fundraising of the first phase of funds.
Becoming an early angel investment institution’s LP is a good strategic supplement to Sequoia China. Sequoia China’s brand and financial strength can better reflect its value in mid- and late investment. Investing in some early GPs can better promote cooperation and lock in some high-quality projects in advance.
In addition, these institutions invested by Sequoia China are more or less related to themselves, such as those invested projects, funds initiated by former partners, institutions that have jointly invested in and sold, or some of the reputation and strength of the institutions themselves have been recognized by Sequoia China.
