The pioneers who came from the road felt that the opportunity for the rise of a huge market economy was brewing. For these US dollar VCs, capturing the next Ctrip, Shanda and Baidu is their investment mission to China.
Stepping on the localization journey, The road to self-improvement without interruption
As with many imported items in history, the entry of US dollar funds into China is also a challenge of acclimatization. Independence has become the goal set by some US dollar funds when they entered China.
This past event, Shen Nanpeng was impressed. According to the China Entrepreneur Magazine, in 2005, Sequoia Capital found Shen Nanpeng. “When we met with Sequoia’s US partners in San Francisco, the two executive partners of Sequoia Capital told me that each place can only play the role of independent decision-making. The greatest ability to ensure the accuracy of decision-making.” Shen Nanpeng recalled that in addition to the global perspective, Sequoia China’s operations have been branded as local operations and local decisions from the very beginning.
In 2008, the only requirement that Qi Qun made when he joined the speed of light in the United States was to make the decision-making and operation of China Lightspeed completely independent. In the end, he spent three years achieving this goal.
Yu’s many years of work experience at Google has led him to anticipate the need to localize the US dollar fund early. “When we are the chief representative of Google China, every time we implement a product strategy in China, we need to discuss with the US headquarters. This communication process requires a high cost.”
Even when you first entered China, you did not choose to operate independently. With the continuous development of the Chinese market, exploring the effective path of localization of US dollar funds in China has gradually become a topic facing all US dollar funds.
In 2015, Red Dot Ventures entered China for a full decade and finally chose to separate the Chinese team. “China’s innovation and entrepreneurial environment has undergone tremendous changes, more and more local innovations have emerged, and the nature of China’s entrepreneurial ecology has changed.” Yuan Wenda said, “We need to adapt to this change.”
In fact, the early independent dollar funds are still actively pursuing self-improvement. After the establishment of the GEM in 2009, local RMB funds rose rapidly, and the US dollar funds began to explore the RMB fund business collectively.
According to Guo Weifeng, a partner of Beijing Deheng Law Firm, “At that time, foreign investment institutions asked each other when they met. Do you have a RMB fund? At that time, the GEM was just opened, and the price-earnings ratio was very high. Everyone thought about listing as soon as possible. And having foreign capital will be very troublesome.”
The US dollar fund represented by Sequoia has successively established the RMB fund team, which directly promoted the outbreak of RMB funds. Since then, the RMB funds have been crushing the US dollar funds in terms of size and quantity for many years.
Since then, the Dual Currency Fund has become an irreversible trend in the Chinese venture capital industry, and the main body of the US dollar fund has become more diversified. In 2010, local VC/PE developed to a versatile type.The net bonus will also be staged in India. Many VCs tend to choose Chinese teams who go out to sea when they choose projects overseas. These teams have experienced baptism in the country and have their own style of play, making it easier to win in an emerging market.
In 2018, Qi Pei Venture Partners Huang Peihua set foot on the land of India three times and talked about two projects: a cross-border e-commerce company and an online reading platform. “China has a lot of products that imitate the US Internet. We have the Chinese version of Quora (known) and the Chinese version of Youtube. After that, we saw the amazing growth of China; when the PC Internet gradually developed into the mobile Internet, we also participated. This process. Now that we are in India, I have found some Indian products copied from China,” she said in an interview with the media.
For the US dollar fund, one of the biggest challenges in the future is whether it can capture the next “Chinese market.”
The dollar LP that wants to invest in China is very much, but the domestic 90% GP still can’t meet the requirements
The development of the US dollar fund in China has not always been smooth. Once upon a time, the voice of RMB funds crushing US dollar funds has come and gone. But history has always been spiraling, and in the last year or two, the dollar fund has been rekindled.
Under the winter of 2018, the fundraising of the US dollar fund can be said to be a double-fired day compared with the RMB fund. The investment community has previously reported that local venture capital has been enthusiastic about US dollar funds since last year. “Many organizations want to set up the company’s first dollar fund, and some FAs are starting to make dollar funds.”
In the first half of this year, the continued booming of US dollar funds has become a special landscape for the domestic VC/PE market:
On January 3, China Everbloc announced the completion of a new $560 million fundraising plan, including a $360 million US dollar fund for the fourth phase and a $200 million select fund for the first phase, which is its 2011 The largest fund since the independent operation; on January 22, Red Dot China completed the recruitment of the $400 million Red Dot China Dollar II Fund;
On April 8, the source code capital completed a new fund raising of 570 million US dollars; on April 16, Dehong Capital announced its fund-raising completion of the first phase of the US dollar fund “Dehong Capital Phase I” in Dahua District. More than 2 billion US dollars; on May 17, Shengjing Jiacheng US parent fund completed a new phase of fund collection of 100 million US dollars……
2019 is considered a year of the dollar fund explosion. Although the overall size is still lower than the RMB fund, the participants of the US dollar fund are constantly diversifying. Not long ago, Zhongding Capital completed the fundraising of the first US dollar fund, with a capital of 365 million yuan. So far, Zhongding Capital has crossed from a single-currency fund to a dual-currency fund.
