To B investment is not a “bottom bargain”, but requires patience and in-depth.
Editor’s note: This article from the public micro-channel number ” Triumph Ventures “(ID: keytonevc) , author: Jun participate.
* This article originated from an interview with Tao Ye, a partner of Triumph Ventures, which mainly talked about the business and investment of To B, and shared some views with you.
Partner of Triumph Venture Partners
Triumph Ventures, founded in 2008, has maintained a low-key and focused style, and is not blind to investment and has never followed the trend. Make a long-term investment, maverick can be seen.
Although well-known To C companies such as Southeast Asian Internet giant SEA have also voted in, To B is the “strategic all-in” of Triumph Ventures, regardless of the team ’s genes or the enrichment of the project coverage. Core areas of concern.
From Qi’anxin to Huifu World, from Jiahe Meikang to Derby Software, Triumph has layouts in leading enterprise service companies in major vertical fields such as network security, financial services, healthcare, and travel.
Today, investment in the To B field is becoming a kind of “outlet”, and the rapidly increasing attention has caused a lot of “noise” in this circle. However, investing in the To B business requires a deeper grasp of the industry chain, and a clearer and more comprehensive judgment on technical solutions and team comprehensive capabilities. The establishment of this “comprehensive competitive advantage” is a long-term process, taking the leadTravelers’ Triumph Ventures has sufficient preparation and confidence.
As early as more than ten years ago, they began to make strategic investments in the mobile communications industry, which witnessed the continued rapid development of the global To B market. He believes that entrepreneurship and investment in the domestic To B field have always been “difficult”. This was the case in the past, and it is still the case today.
Of course, today’s market fundamentals are indeed undergoing substantial changes: demographic dividends are gradually disappearing, automation and intelligence are imperative for the transformation and upgrading of various industries, and rigid requirements for efficiency, compliance, safety, and control The outbreak of is stimulating growth potential in different areas.
In Tao Ye ’s view, at this stage, investment and professionalism and patience are indispensable. To put it more simply, it is necessary to “deep dig”: “In the search for the direction of the big market, everyone’s basic judgment will not be too biased. The difference is that after determining that the matter itself is large enough, can it drill Deep enough to be more accurate than others? Today, only by digging deeper can we seize the long-term opportunities. “
To B investment can not talk about “undercut”
Participating Jun: Since its establishment in 2008, Triumph Ventures has always taken To B as its core investment direction. What are your specific areas of concern?
Cultivation: We have been cultivating in this field for the past ten years. This is an area where we are better at and prefer. We understand very well what the hypothetical basis of each of our investments in this area is, what is expected, how much risk, and how much potential.
From a specific direction, our investment is mainly in two aspects:
First, products and solutions developed around core enterprise needs such as efficiency, intelligence, security, and compliance. Despite the differences between industries, these major trends are consistent.
The second is import substitution, mainly with key devices, components, and upstream and downstream materials and service providers, especially in the field of semiconductor and IoT ecological chain, and there are a large number of emerging treatment methods and R & D processes in the medical field , Equipment and other opportunities emerged. We especially hope to support some world-class innovative companies that may have disruptive breakthroughs for a long time.
Participant Jun: To B is the main investment field of Triumph Ventures. How did the invested company perform during this crisis? What have you done?
Cultivation: Compared with retail, consumption, tourism and other fields, many To B companies have not suffered much in the short term. The epidemic situation is at most to make the project implementation speed and acquisition of new customers slower. For projects that have been implemented and are runningAt present, the income impact is limited. Especially when more and more enterprises are accustomed to working online because of the epidemic situation, on the contrary, the promotion efficiency and income of many businesses have been significantly improved, which is a rare opportunity for some enterprises.
For the Triumph family, ensuring the health of the team, family and friends is the top priority in the early stages of the outbreak. Recognizing that the epidemic cannot be eliminated in a short period of time, we began to conduct targeted macro-analysis and corresponding strategic adjustments. We have not stopped investing. We have invested in two projects in the past two months. For the invested companies, we also urge everyone to “pull the pulse” for the first time, formulate plans to deal with unconventional risks and changes, and encourage companies to seize opportunities and make use of external capital resources to overcome difficulties.
At present, our company not only overcomes various difficulties, but also adjusts the company’s status in a timely manner, many of them are also active in the front line of “anti-epidemic”: Jiahe Meikang, wayz, Dali Technology, and lead genes Other companies have made their own contributions to fight the epidemic in their respective fields.
Participating Jun: When it comes to the rhythm of investment, some investment institutions will think that the epidemic crisis is an opportunity, it is easier to see the strength of some projects, and the project price is also more advantageous, thus increasing investment efforts Venture capital seems to be more cautious. What do you think of this difference?
Tao Ye: Each fund ’s investment strategy is different, which determines that everyone ’s investment rhythm is different, which is normal. Triumph’s style has always been more robust.
On the one hand, we believe that due to the impact of domestic and foreign epidemics, the mid-to-long term economic fundamentals may undergo major changes. In other words, some of the previous basic assumptions may no longer hold. On the other hand, Because of To B ’s own characteristics, whether it is possible to “find a bargain” today may not be so important. Choosing the right company investment and long-term company will not affect the valuation.
To B field is relatively slow, and its development curve and rhythm are completely different from To C field. A company met 10 customers today who are all interested in the product, but it is actually a year since the contract was signed and delivered. This is still an optimistic situation. Large customers may be slower.
But there is no doubt that as domestic companies become more sensitive to cost and have higher demands for improving efficiency and safety, the scale of the domestic To B market will definitely go all the way up and the speed will be significantly accelerated in the future.
To B has no other investment, only dig deeper
Participating Jun: What is the development status of To B in China over the years?
Ceramics: In the past, it was difficult for To B companies to develop in China. Many To B businesses are selling software. At that time, large enterprise customers were mostly state-owned enterprises. For them, spending millions of dollars to buy a software has potential risks. Large enough companies often choose to develop by themselves; SMEs often buy free and pirated ones. software.
Now, as the demographic dividend disappears and the economy enters the stock era, the needs of enterprises for automation, intelligence, and security compliance are all increasing. To B business will undoubtedly grow. These are all facts, but To B is still It is a difficult business.
As mentioned earlier, On the one hand, this is an asymmetric and slow market. In addition, our technical level is relatively weak overall. From the perspective of effectively improving the operational efficiency and safety of the enterprise, the product performance of domestic To B companies is still relatively large compared with the foreign benchmarking companies and the expectations of enterprise customers themselves. difference.
These factors restrict the development speed and scale of the To B field.
However, because To B is a slow job, Long-term investment is required to establish real technical barriers and truly gain the favor of customers , so once the company has built a sufficiently high barrier, even In the event of an epidemic, revenue will not suddenly disappear. Even if a large number of new companies are suddenly poured into their own fields, the original companies will still be there, and no one can change the existing by simply smashing hundreds of millions of dollars in a short time. Industry pattern.
Participating Jun: Based on your years of experience, what is the key to To B investment?
Ceramics: The most important thing is to dig deep. Everyone ’s basic judgment will not be too biased. The difference is that after determining that the matter itself is large enough, whether it is drilled deep enough, only by digging deep, can you have the opportunity to seize sustainability Opportunity.
In addition, To B is relatively long-term. To really make money, you need to have enough patience and long-term companionship. As an investor, many times I am most afraid of entrepreneurs telling me “how to make money”. Some entrepreneurs will say, how much is their next valuation, then the next round of industrial investment will come in, and then the next round of government investment will come in, at this time the shares or companies can be sold, how much ROI can be achieved, etc. . We are particularly afraid of the lack of long-term thinking of the founders, and they will sell the company by staring at a random opportunity in the process.
Unlike To C, To B investment basically does not require gambling . The reason for this is that the company we invest in must already have customers, business, and sales, and the model has been verified, and we will not invest in it without reliable orders. For our Triumph Ventures, an institution that mainly invests in A rounds, the premise of our entry is to see exports.
Participant Jun: Since the premise of To B investment is to be able to see some explicit indicators such as customers and sales, what is the real test for investors?
Ceramics: The test is for investors Do you really understand the industry? Different industries have different depths of understanding. In the face of the same facts, different investors will make different judgments.
For example, if two investors go to a software company that prevents financial fraud, the opinions formed may be completely different. I may think that the bank will not use this product at all, but you may think that the bank will use it. . This is the difference. Even if a company says that it has signed a contract with a certain branch of a certain bank, is testing it, and even the other party has paid 1 million, I may still not vote, but in the eyes of others, this may have been verified. Too.
In addition, the To B field has a more obvious winner-take-all feature . For any one thing, the last ones that really get bigger are a few. Because To B products are things that companies make decisions to pay for. After judging that a product is a real demand, the company will compare the performance and professionalism of the product. For the same type of corporate customers, it can stand out from the competition .
Ca n’t think about China with a small country mentality
Participating Jun: Triumph Ventures also has investment in the To B field abroad. The To B market in China and the United States is very different in terms of maturity, what do you think?
Ceramics: Most US vertical markets are relatively mature and stable. The trillion-dollar market has been developing steadily for decades. Because US labor costs and compliance requirements have always been relatively high, US companies have always cared more about cost performance and efficiency.
The To B market in the United States is in a benign state of orderly development. Continued demand exists, new startups continue to emerge, and large companies have always been willing to acquire, and mergers and acquisitions have beenAre very active. In the past, there were many mergers and acquisitions by database and marketing management companies, but now the field has transformed into big data and artificial intelligence. For example, many traditional car manufacturers in Detroit will now buy software companies that do autonomous driving, relying on mergers and acquisitions to improve their capabilities.
There are not many domestic M & As in this area, because not many powerful companies rely on M & A to develop their main businesses. To B companies with a market value of tens of billions and hundreds of billions in the United States abound. Most domestic investment companies To B are still on the road to independent listing. However, this is also in line with the current market structure. The number of listed companies in private technology companies is far from enough, and it is no problem to double or double.
Participating Jun: Recently there have been more debates on globalization or de-globalization. Triumph Ventures immediately became a U.S. dollar fund from its creation, and now it is a dual currency fund. How do you view the crisis on the future global competition and cooperation Impact?
Tao Ye: First of all, we always think that China is a big country . We are not Singapore or Israel. We can never expect to “rely on the help of other countries” to do our own good. Therefore, many things must eventually be done by themselves. We cannot rely on others to survive and develop well. So our agriculture is stronger, the industry is stronger, and the technology service industry is also stronger. This is a big premise.
Taking the United States as an example, today it is okay to make masks and tanks. It’s not without this ability, it’s just that it can’t be counted as an economic account, and chooses to find someone else to do it. Even if something is really strategic, they will do it themselves even if they lose money. For example, oil is so cheap now that the United States still uses its own shale gas and shale oil, and will never let its own energy production shrink its core functions.
China is continuously increasing its investment in technological innovation, and we particularly support it. No matter how many risks and difficulties, and how many setbacks and failures, as long as they can achieve a part of the technology innovation company with global leadership, it is a victory and a success.
Finally, the general trend of economic globalization cannot be changed. This is determined by the basic laws of economics. From the first day of technology investment, We have always believed in global market demand and global asset allocation. There are excellent entrepreneurs and scientists all over the world. New technologies and new models require us to absorb and learn with open mind. This is one of the important reasons why China has developed rapidly for 40 years since reform and opening up. Losing this humble attitude and changing the mechanism of cooperation, we lose the possibility of progress and building a better future.
Triumph Ventures
Founded in 2008, China ’s domestic dual-currency private equity investment agency focuses on early-stage technology companies. Committed to long-term investment in national strategic emerging industries, including the Internet of Things, high-end manufacturing, artificial intelligence, advanced medical treatment, high-performance materials and other fields.