Author | Hu
Title map | vision china
Venture capitalists who go to sea are experiencing a cruel and realistic choice: whether to advance or retreat in overseas markets.
Both BAT, which took the lead in betting overseas, and VC, which has been deployed overseas for several years and achieved initial results, are facing the same problem at the moment. According to an industry insider close to Ali's sea business, Ali will not set foot in the Indian market in the short term. He learned the fact that in addition to the giants, several small and medium-sized venture capitalists have decided not to look at the Indian and American markets for two years.
India-Europe and America-Southeast Asia-Africa and other regions are the most common road maps for most institutions to invest in the sea. But now this composition is changing.
"Of course, it is the Indian and American markets that have a greater impact on VC." An overseas investment practitioner who did not want to be named said that when the Indian government issued the ban for the first time in June this year, the Indian company they invested in laid off 80% of the company's employees at the first time to reduce expenses, which is only a small microcosm of the current living conditions of overseas troops.
Faced with the current predicament, venture capitalists seem to be more pessimistic than entrepreneurs who rush to the front line. "Because of the epidemic, there is no way to go to the local area to make all the adjustments, and it is impossible to inspect the market." Meng Deyang, vice president of Song Qing Fund, said that the return on Indian projects in the past was lower than expected, which forced the team to turn its attention back to China.
Wait and see, confused, unknown, whether losing enthusiasm for overseas markets or continuing to work hard in the local area, VC began to show its various forms when it went out to sea.
Rebirth by changing shells
"It is indeed more difficult than before (the epidemic)." Wu You, founder of Jinghu Capital, said.
20 17 Jinghu Capital, which mainly invests in the American medical market, raised its first fund with an amount of 280 million US dollars. In the past investment cases, American projects accounted for the majority, but at this stage, this regional dividend no longer exists.
"Some dollar funds have begun to adopt strategies for the China market. Previously invested projects, such as drugs related to breast cancer, have been difficult to enter the China market. " Wu You said helplessly that under such circumstances, the layout of Jinghu Capital's "global investment, landing in China" was gradually challenged. "Even if the second shareholder is an American, it is useless, and according to some US dollar funds we have learned, some of their LPs hope that GP can fire China employees."
In this case, the current situation of the American projects that Jinghu Capital once bet on is not optimistic. According to Wu You, in addition to the fact that some US dollar funds have begun to adopt strategies for the China market and have risen to the resistance to talents, even American local projects have begun to be cautious about VC with China background, and they will think twice about whether to pay this money.
The confrontation between different types of funds is being staged.
Chen Nengjie, founder and CEO of Parent Fund Weekly, expressed a similar situation. The general practitioners they serve have also become more cautious. The institutions of the first echelon began to take money from Southeast Asia, as well as money from Europe and the Middle East. The institutions of the second echelon and the third echelon are facing financing problems. "The investment is slower, the consideration is more detailed, and the consideration of policies is beginning to be placed in a more important position."
However, some venture capitalists who are unwilling to quit and ready to continue to defend the original market began to try their best to "package" themselves. For venture capitalists, the next round of financing will be smooth only if the project returns well. If the income in other markets is not good before, you can only empty your previous plate and start over with another identity.
Dai Yi, a researcher on China-India relations, said that some venture capitalists who are unwilling to give up the Indian market began to change their shells to become the background of Singapore in order to continue to realize their investment in India.
There is also the fact that some venture capitalists are reluctant to quit India. Although American venture capitalists are secretly competing with China venture capitalists, American venture capitalists cannot completely replace entrepreneurs and business models with China characteristics excavated by China venture capitalists in a short time. "American VC invests more in Indian entrepreneurs, and China VC invests in entrepreneurs with China gene. There is a difference between the two. "
In addition to changing their names, transforming themselves and raising new funds, some venture capitalists have begun to change places and continue to invest in another battlefield.
Bottom-hunting mentality
"Everyone has a bargain-hunting mentality." As an early VC who went to sea in Southeast Asia, Shi, a partner of Deep Sea Capital, described the reality faced by VC who went to sea after the epidemic.
In June this year, some VCS people asked him about his investment in Southeast Asia. "Before these institutions were betting on the European and American markets and the Indian market, they basically did not look at the Southeast Asian market." Stone said to. "In the eyes of these venture capitalists, the population of the Indian market is large enough, and the technology and consumption power of the European and American markets are strong enough. They have always thought that Southeast Asia is relatively discrete and mysterious, and the temperature is almost interesting. "
Although the vast majority of venture capitalists looking for him don't understand this field, they still won't stop their enthusiasm for laying out Southeast Asia, just like when they first entered the Indian market. "A little nasty, want to take out the money quickly. Even for very general projects, they are willing to gamble. "
But what makes Shi feel incredible is that some of the projects they invested in, and some teams even in China, only stay in the data and feelings about the Southeast Asian market, not to mention the local culture and policies. At this time, the spillover value of China's supply chain has also been promoted to a new height.
At present, Southeast Asia has become the darling of venture capital.
Shi gave an example. A China team, known as the "local beauty group", quickly formed a team of 100 people after completing the tens of millions of dollars of Series A financing, and recruited the talents of domestic giants. However, after going to the local area, the data is bleak and amazing. "There are only about 20 orders on the platform every day."
Historically, VC has been transformed in a hurry, and it is impossible to deeply understand different local cultures and their fragmentation when choosing projects. For example, in China's view, ordering takeout has become a habit. Although people in Southeast Asia are generally lazy, they like to have dinner. They are rich in family culture, friends culture and party sharing culture, and are more willing to spend time enjoying life.
"If you can't understand the local dining habits, entrepreneurs just copy China products, and investors judge projects with limited experience in the past, then it is likely that haste makes waste."
For deep-sea capital, it also costs a lot of money to invest in Southeast Asia, but in history, VC entering the market now wants to arrive soon. "Many teams think they know the local people very well, and finally they are planted in localization." Shi said that the pace of investment has gradually slowed down, and investment in Southeast Asia is not as simple as expected.
The mentality of "finding projects with good cash flow and high returns quickly and throwing money out quickly" began to spread in a large number of VCS.
The imagination of "new world"
Although Indian and American markets have dealt a great blow to China's Internet going to sea, only a few venture capitalists have slowed down like Shi, and most venture capitalists still believe in the imagination of new markets.
Li Tao, the founder of APUS, said that nearly 10 products have been removed from the local market, but he and his team continue to be optimistic about overseas markets and actively deploy them in other regions.
Lou Yun, the founder of ——Club Factory, who was in the same situation as Li Tao and was banned by India as the first batch of enterprises, said in an interview that they had left India and were looking for new market opportunities after shifting their focus to other regions.
More importantly, in their view, the potential of many other markets has yet to be tapped, especially in the field of games. Even if the American market is abandoned, the rest of the world still firmly controls nearly 90% of the market.
Indian street
As entrepreneurs pay attention to new markets, the venture capital behind them also follows closely.
Bertelsmann Asia Investment Fund, which made an early bet on the club factory, has begun to turn its attention from India to Europe, especially after the geopolitical challenges faced by Indian e-commerce.
It can be said that VCS, which has been hit hard in other markets, urgently needs to find a new land for reclamation. The transformation from online to offline, looking for the invisible champion in the offline field, is the biggest driving force for many VCS to transfer to new markets.
Wu Shichun, a plum blossom venture capital, said that there are still many untapped dividends in the Middle East, Africa and other regions. For entrepreneurs in China, the supply chain advantages of starting a business abroad are also increasing, and opportunities in trade, brand, consumption, games and other fields still exist when investing.
When more and more venture capitalists flock to new markets, a magical scene begins to appear. In these areas, the past situation of chasing investors in projects began to change to investors looking for good projects.
Perhaps for venture capitalists, there is still a market to see and vote for, which is already something to be thankful for.
Here comes the shuffle?
When there are systemic problems, it can be said that every individual cannot escape. The emergence of the epidemic black swan has not only changed the sea market dramatically, but also disrupted the investment rhythm of VCS.
According to the research of 10 overseas investment institutions in which IT Oranges are actively deployed, including GGV ggv capital, SAIF partner of Safran Fund, Phoenix Investment Vertex, Shunwei Capital and Sequoia Capital China, it is found that only two investment events occurred from 2020 to April 13-TaniHub, an Indonesian B2B agricultural platform with Xiangfeng Investment, and Eureka, a software developer of Singapore AI enterprise with Gobi Venture Capital.
Before the outbreak, eight institutions in the 10 sample studied participated in overseas projects, including EpiFi, a new generation Indian bank invested by Sequoia Capital China, and Simsim, an Indian female audio-visual e-commerce platform invested by Shunwei Capital.
After the outbreak of the epidemic, China's capital investment in Southeast Asia also decreased significantly.
As for investment in Africa and South America, in 2020, Q 1 fell into a "freezing point". In the first quarter, nearly 80% of China's overseas investment cases occurred in North America and Asia. In the past, those venture capitalists who went to sea in Aauto Quicker and had high morale did not create the myth of capital, but entered the "cold winter" period ahead of schedule.
Regarding whether venture capitalists will shuffle their cards when they go out to sea, a considerable number of venture capitalists said they would not. "For venture capitalists who have formed their own unique style of play, even if they miss the investment opportunities in China in the past few decades and miss the prosperity dividends of the Internet and mobile Internet, they may seize this opportunity. This' get up' refers to leaders who focus on overseas subdivision of the track. " Although some venture capitalists will fall and some will rise again, this does not mean that the big pattern will change.
But some venture capitalists said that shuffling will definitely happen. On the one hand, the strong attack of the US dollar fund on the global market at this node will eliminate some backward venture capitalists. On the other hand, venture capitalists in the original market will start to target blank markets such as the Middle East and Africa. Under the same conditions, all venture capitalists stand on the same starting line, which is the time to shuffle.
And after the risk, what are the characteristics of VC that can continue to stand abroad? They also gave their own suggestions:
First of all, this is a compulsory course in the study of policy environment and localization.
Secondly, it needs strong support from the middle and back offices, a complete operating system in terms of strategic layout and investment portfolio, and a global investment layout, rather than just betting on a single market.
Thirdly, when choosing a project, the founder team must be the China team. When judging the project, we must pay attention to whether the point established in China is still established locally. Only in this way can we bring the China model overseas.
This article comes from Tiger Sniffing Network.