Author of Tencent's "Deep Web" Xue Fang
During the Spring Festival, Liu Erhai, the founding and managing partner of Joy Capital, was in Shandong. He has been working since January 26. On the day of
, Joy Capital donated RMB 2 million to Leishenshan Hospital. Ruixing Coffee, the investee company, also donated RMB 10 million to Leishenshan Hospital. Tu Rover Car and Energy Chain Group donated RMB 5 million and RMB 300 respectively. Ten thousand yuan helped Wuhan's epidemic prevention, and also provided free maintenance and refueling services for anti-epidemic vehicles. In Liu Erhai's view, this is a corporate social responsibility and a particularly important matter.
During the Spring Festival, in addition to donations, Liu Erhai also handled many things. On February 2, Ruixing Coffee encountered an anonymous short report issued by Muddy Waters and its stock price plummeted. Then there was a short report saying that Liu Erhai had sold two-thirds of Ruixing Coffee's shares he held. In this regard, Joy Capital issued an official statement: Since investing in Ruixing Coffee in 2018, Joy Capital and its affiliates have never sold any shares of Ruixing Coffee.
In addition to Luckin Coffee, Joy Capital has also invested in Weilai Automobile, Eggshell Apartment, Mobike, Tuhu Car, Greenmi Lianchuang, Energy Chain Group, Le Element, Excellent projects such as Shihui Mission, Healthy io, temi robot, Jingwei Vision, Good Rent, Dream Plus, Angel Orange, Little Pig Short-term Rent, Live Well, Yimeier.
Joy Capital resumed work on February 10, and corresponding changes have taken place in the form of work. Offline is completely online. The entire company has adopted remote office, teleconference, and video conferencing to communicate.
Liu Erhai divides the current work into three categories: The first category is to communicate with invested companies to discuss the short-term and long-term impact of the epidemic on the company’s business and operations. The second category is to continue systematic industry research. The third category is to continue to collect and screen new projects as usual.
"There are some projects that we have known for a long time, and they can basically be completed online, but it is impossible to complete all the work online. For example, you have to go to the warehouse to have a look and have interviews with senior management. From this perspective, in the short term It is indeed affected to a certain extent." Liu Erhai told "Deep Web."
In Liu Erhai’s view, the epidemic will eventually pass. What kind of experience can be learned from it is important:
cash flow is what everyone is talking about, CEOs are very smart, don’t need to remind them, they will consider this as soon as possible problem. At present, the cash flow of our core companies is pretty good, at least 12 months-from the first contact with the invested company, we have repeatedly emphasized that you must not wait until you are really short of money. To raise funds, you will not have any advantage in the negotiation at that time.
Under the force majeure of the epidemic, how can companies actively communicate and negotiate with their own upstream and downstream, and work together to keep the entire system running smoothly? In the long run, when companies make forecasts and sign contracts, they must have sufficient risk thresholds to deal with them calmly. This is also my second suggestion to enterprises.
Through this epidemic, Liu Erhai believes that the outbreak period of some industries will come early, such as unmanned retail, home medical care, and some business models will change. Enterprises can only truly use the power of technology and technical means to transform their business. , It is possible not to be knocked down by emergencies, and to continue to break through.
"VC investment is still a very long-term investment, not a year and a half, we are looking at the opportunity of 5-10 years. Enterprises have some difficulties in a period of time, if the fundamentals of the company are good, we are definitely willing Give support, such as additional investment, and some transitional cash flow support." Liu Erhai explained.
The following is the transcript of the interview with Liu Erhai, the founding and managing partner of Joy Capital:
"Deep Web": What are you up to after the Spring Festival?
Liu Erhai: I am in Shandong during the Spring Festival and have been working since January 26. On that day, Joy Capital donated RMB 2 million to Leishenshan Hospital, the invested company Ruixing Coffee donated RMB 10 million to Leishenshan Hospital, Tuhu Car and Energy Chain Group donated RMB 5 million and RMB 3 million, respectively. Own services and products participate in the front line of fighting the epidemic. This is a corporate social responsibility and a particularly important matter.
Another thing is to attach importance to scientific protection, protect yourself, protect employees and their families, and bestConsider both upstream and downstream. During this period, there has been no interruption in the projects that have been invested and in due diligence. For example, Luckin Coffee was not only short-selling by an anonymous report, but also rumored that I had sold 2/3 of Luckin Coffee stock. As a major shareholder of Luckin, we must of course support the company, and immediately issued an official statement to clarify the rumors.
Eggshell Apartment also encountered a crisis of public opinion in the face of this epidemic. In this case, the company should explain the situation to the user truthfully, and explain the countermeasures clearly. The epidemic is force majeure, and both upstream and downstream must work together to tide over the difficulties. At a deeper level, when companies make predictions and plans, do they need to keep enough risk thresholds? Only in this way can we deal with it calmly. This is like high-rise buildings that have design flexibility to withstand the impact of extreme weather conditions such as typhoons and rains.
"Deep Web": After resuming work, what is the organization up to?
Liu Erhai: After Joy Capital resumed work on February 10th, we adopted telecommuting, teleconference, and video conferencing to communicate. During this period of time, our work has undergone a change, from offline to online. The work of
is divided into several categories. One is to communicate with the invested companies and discuss the impact of the epidemic on the business, because they are very familiar with each other, and there is no problem with the efficiency of communication. The second type of work is to continue the previous systematic research. The third type of work is to look at new projects as usual. We also take the form of video conferencing. Some projects have been known for a long time and can be basically completed online, but it is impossible to complete all the work online, such as going to Take a look at the warehouse and conduct interviews with executives. From this perspective, it is indeed affected in the short term.
"Deep Web": In response to the epidemic, in what ways can investment institutions support invested companies?
Liu Erhai: Cash flow is one thing everyone is talking about. CEOs are very smart, so you don't need to remind them to know. I think the most important thing is to remind the invested companies to use technological or commercial innovation to adapt to the new situation in their business models. For example, the new direction of home medical care can use robotics technology. In response to the trend of "online", you can use technology to change the business model.
We must have an understanding: the virus is a short-term existence, it will definitely pass, but what enlightenment will it bring? What kind of business changes will it trigger?
VC investment is a very long-term investment, not a year and a half of a few months, we are looking at a 5-10 year opportunity. Enterprises have some difficulties for a period of time. If the fundamentals of the enterprise are good, we are definitely willing to provide support, such as additional investment and some transitional cash flow support.
"Deep Web": Will you look at the logistics industry again? Can the future of technology enable logistics to cope with the operation of extraordinary times?
Liu Erhai: I think the technology of the logistics industry is an inevitable trend. We have also invested in a company to automatically sort goods, break an order into several sub-orders, and then automatically sort them. This will definitely be a trend in the future. On the other hand, logistics will also have some technological upgrades in the future. Many of today's transportation still use manpower and drivers to do this. This part of the short-term replacement has some difficulties. So, how to optimize and improve safety? We have invested in an active safety company that uses facial recognition and other technologies to discern whether drivers are driving fatigued, and uses sensors to alert drivers to other risks so that they do not have accidents. In addition, the end delivery also needs some modification.
"Deep Web": After the epidemic, what new investment opportunities will there be?
Liu Erhai: The epidemic not only brings danger, but also brings some new opportunities. What is a new opportunity?
Luckin Coffee started its preparations for unmanned retail last year. It was released in early January this year, and soon caught up with the outbreak of the epidemic. No one could have expected this situation last year. When this happens, we will be more active in promoting unmanned retail, because unmanned retail reduces the chance of people contacting people, basically scanning codes and taking away. Now, Luckin's unmanned coffee machine has entered a key hospital in Wuhan for free use by front-line medical staff. How will
home healthcare be carried out? We invested in a company in Israel, mainly for chronic kidney disease testing and screening. It has passed FDA and CE certification, which can be used as a basis for doctors to prescribe. This kind of home healthcare directly reducesThe pressure on the hospital is reduced, and the problem of insufficient medical resources is greatly eased.
Let's look at the changes that robots bring to the business model. The TEMI we invested in is not a humanoid robot in the traditional sense. It has wheels at the bottom that can move on its own. There is a tablet computer on it to talk to people. It serves as a doctor’s assistant in the hospital to communicate with patients, assist in home care and accompany the elderly and Children have very broad prospects for communication. The
epidemic has developed to this day, and I think startup companies have already carried out systematic inventory and thinking about their own businesses. I have noticed that many analyses compare the impact of SARS on innovation and entrepreneurship in 2003 with this epidemic. Of course, there are lessons to be learned, but there will not be two identical leaves in the world. The current technological development and industry pattern are not It was very different 17 years ago. For example, the maturity of new infrastructures such as mobile Internet, mobile payment, logistics, made in China, and cloud will accelerate the development of new businesses and new models that use technology-in the final analysis, understand the trend and seek benefits from technology.
