Jingwei breaks through new energy

In the era of mobile Internet, the style of "fierce" longitude and latitude has iterated a new set of investment methods.

Header image** Visual China

In October 2023, one day after the autumn strategy meeting of Li Auto, Wang Huadong of Jingwei sent an excerpt to Li Tie, CFO of Li Auto: "I have always believed that the plan should be big, but I always find out afterwards that our original plan is not big enough. ”

This quote comes from Alfred Sloan's autobiography "My Years at General Motors", the legendary CEO who led GM for more than 30 years and single-handedly propelled the latter to the throne of the world's largest car company - in Wang Huadong's view, the current industry environment and competition situation of new energy vehicles are very similar to the era of Sloan. So will the next "General Motors" rise in the field of new energy?Would the ideal be a possibility?

Six years ago, such an assumption would have sounded ridiculous. It was 2017, and Wang Huadong, who had been looking for a "new terminal", finally aimed at new energy vehicles and put his chips on the ideal. This does not seem to be a wise choice: the ideal of adopting the extended-range route was regarded as the "most unpromising" new power car company at that time, and Jingwei not only invested, but also invested three rounds in a row, with a cumulative investment of nearly 1 billion yuanThis unprecedented "big deal" has become the "most controversial" project in Wang Huadong's investment careerZhang Ying and Wang Huadong received "a lot of ridicule" because of this, and an LP later talked to Wang Huadong about this matter, bluntly saying, "I thought you were brain-dead at the time."

Fortunately, his credit account is rich enoughIn the 7 years since joining Matrix, Wang Huadong has made many achievements, including the mobile developer service platform Umeng, which was acquired by Alibaba in 2013, and Momo, whose market value has soared to $10 billion (renamed Zhiwen Group in 2021), and thus became the youngest partner of Matrix Partners. But in 2016, mobile Internet investment is approaching twilight, whether it is Wang Huadong, or Jingwei, need a new fire for the future, in other words, even if the ideal investment is a risky move, Jingwei must also break through.

The evolutionary law of the natural world applies to the world of venture capitalists, yes, there is an unfathomable fog, but the seeds of magic are also born in it. The ideal was once a seed that few people were optimistic about, but Jingwei followed the vines it later extracted, extended the investment into the ecosystem of new energy vehicles, and carried out a systematic layout in multiple directions such as intelligence, electrification, and lightweight.

In addition, he has taken on more and more day-to-day management tasks, and at the beginning of 2023, Wang Huadong was officially promoted to the managing partner of Matrix Partners.

Wang Huadong. **IntervieweePreviously, Jingwei had two founding managing partners - Zhang Ying (D**ID Zhang) and Xu Chuancheng (D**ID Su), the "two D**IDs" have very different personalities, and LPs or business founders who have been in contact with the two will obviously feel: the former is always courageous, and the latter will sometimes step on the brakes, and the two sides complement each other.

But for Wang Huadong, who has worked together for 13 years, Zhang Ying is a "difficult to summarize" person. "If he thinks about something, he will do it immediately - a lot of people will also think about the feelings of the team, he doesn't think much about it, so at least it can push the change forward. ”

The internal changes that began in 2020 are such a "big change". According to Wang Huadong, Matrix Partners has made "very big adjustments to the composition of the entire team, investment decision-making process, project promotion methods, and post-investment management". This also means that the transformation of Jingwei has evolved from a single soldier and a small range of exploration that began in 2014 to the stage of system reloading, and it is still evolving.

We have chosen new energy as a speculum to observe this change, as we all knowThis is one of the most important investment themes today, and it is also one of the most difficult areas for investment institutions to transform and land. At the end of 2015, the investment in new technologies represented by new energy may only be hidden in the investment territory of Jingwei accounted for 57% of the "other", but by the end of 2023, the investment in new energy, new technology and industrial chain accounted for more than 60%, in the middle of the 8 years, there were initial hesitations, anxious pursuits, there were luck in the investment, and there were regrets of misses, which were finally slowly transformed and precipitated into Jingwei's investment logic, special play methods and system models in the field of new energy.

A History of Venture Capital outlines a 70-year history of the evolution of the modern venture capital industry in the United States, validating an academic thesis that "the reputation of venture capital institutions is important, but it does not guarantee eternal success, and each generation must achieve its own success." "From the earliest mobile Internet, to enterprise services, medical care, new consumption, and then to today's new energy and new technology, the drumbeat of the times is constantly changing

Wang Huadong's answer is, "We are willing to change, and we can change." ”

When the change suddenly smashes in front of you, people's first state is confused, and their first reaction is chaotic.

In 2015, China's smartphone penetration rate exceeded 90% - the penetration of the mobile Internet to this extent, and the probability of investing in some innovative applications is actually extremely low. Although Wang Huadong has realized this, he still "holds illusions" and invests in some new companies, and the results are naturally not ideal;Later, he saw that some technical projects in the United States came out, and he invested two of them, which were not satisfactory. All in all, those two years "did a lot of stupid things".

People who are good at self-deprecation will never fall into stubborn conceitThis makes "change", which already requires self-denial, a lot less psychological resistance, "We don't have too strong ego, and we don't have such a strong obsession with the so-called successful experience before." In Wang Huadong's view, this is a very important point, because the investment logic of new energy is completely different from that of the mobile Internet, "we must often remind ourselves to completely abandon the past experience."

This is the hardest part. According to Xu Chuanchen's recollection, since 2016, Jingwei has been focusing on scientific and technological innovation, and gradually shifted from the theme of mobile Internet to scientific and technological innovation. But he also stressed that "investing in scientific and technological innovation is not just a slogan or a few popular projects, but requires a more systematic and low-level transformation." ”

Yes, it's like a different 'brain'. Wang Huadong agrees with this metaphor, thinking about it like this, the process will not be easy. But his answer was understated, "I didn't have much anxiety, I just read more." "It's like I've told the team countless times," he saidIf you read more books on the history of the industry, you will have a different view of the project. I often wonder if I had read this book a few years earlier, I might have made fewer mistakes. ”

In fact, after a short period of aimless "strafing", Wang Huadong spent a long time studying the history of the development of the mobile phone industry and the history of the development of the European and American automobile industries. In the process, the industrial picture in front of him gradually took shape from the chaos, and finally invested in Li Auto.

Starting from this seed, Jingwei new energy and new technology investment has gradually evolved into an increasingly rich ecological garden, where there are Xinchi for intelligent cockpit, Daoyuan Electronics for autonomous driving, Nasen Technology in the field of automobile chassis, Rongbai Technology, a battery materials company, Yihong Intelligence, a battery equipment company, and Haichen ......, an energy storage cell companyThis is also the "investment ecology" often mentioned by Jingwei later - find anchor companies to understand the industry, form an ecological layout up and down, and play a cohesive effect. For example, from the investment node companies Ideal, Xiaopeng, etc., along with electrification and intelligence, it is extended to various subdivisions of the new energy industry chain.

Of course, this is a story for later, for Jingwei in 2017, the story of the new track has just begun.

In 2017, when Liu Zhuang (managing director of Matrix Partners) joined Matrix Partners, no one internally looked at new energy, he had been in contact with several new energy projects in his previous institutions, and was optimistic about the future prospects of the track, but he also muttered - "When it will explode, no one knows". After all, at that time, domestic new energy vehicles were just emerging, and Tesla, which was red and purple, was once on the verge of bankruptcy.

For the sake of insurance, he chose to try to launch a project with a high safety cushion - ground railway, which is a company focusing on the intensive operation of new energy logistics vehicles. The project was officially closed in about 3 months – a slow deal compared to TMT's projectHowever, in order to further control the risk, Jingwei made two payments.

In the field of new energy, especially in the growth period of investment, do not pursue excessively high returns, the safest range is 3 5 times the return, otherwise you will lose it accidentally. Liu Zhuang said that he is a "relatively conservative" investor, especially in new energy projects, and it takes a long time to make up his mind to invest.

The company's co-founder Zhang Quan's deepest impression of Liu Zhuang is that he is rational and cautious, very sensitive to business data, "even a little 'picky'", which is completely unexpected by him, "Liu Zhuang is not the typical warp and weft style I understand."

Typical Jingwei, the most significant label is "fierce", this investment institution established in 2008 entered the mobile Internet era with a fierce style, and thus entered the head VC camp. Wang Huadong confessed, "In 2018, the speed of our investment was relatively slow, and there were only two companies, which were still in the process of accumulating cognition. ”

These are two different worlds of investing, with different investment rules. In Wang Huadong's view, the essence of the mobile Internet industry is the network effect, and the survivors will become giant enterprises, so the investment pursues the law of the index - 10 out of 100 invested companies finally run out is victory, "fighting for odds".

But in the era of technology investment such as new energy, the logic is completely reversed. On the one hand, except for a few companies, such as Ideal, Xpeng, CATL, etc., the scale of most industrial companies is not too large, and the "winning rate" has become particularly criticalBut at the same time, it is very difficult to judge high-quality companies, and there are many dimensions to judge - what is the position of the product in the industrial chain?What exactly is the real value?Where are the barriers to competition ......Any one lapse in oversight can lead to the failure of the entire investment. Therefore,In the new energy battlefield where the terrain is unfamiliar and the depth is unknown, rashly "fierce" will only result in a disastrous situation. "Investing in new energy projects with the logic of the mobile Internet era is bound to die. Wang Huadong emphasized.

Therefore, unlike other investment areas - the hotter the place, the more opportunities, the investment in the new energy field tends to another "safety law" - the hotter the track, the calmer the capital. If the mobile Internet era needs to be fierce, what is more needed in the new energy era is to stop firmly, hold down the anxious heart and blind pursuit.

Liu Zhuang has a very vivid analogy, "Sometimes looking at a project is like falling in love, at the beginning it is a period of love - how good the project is, the more others oppose it, the stronger the desire to invest".However, new energy investment especially needs a "cooling-off period" - to lengthen the cycle, and when the love period is over, the project is 'disenchanted', and you can look at it more objectively. ”At this time, many problems that were hidden but not revealed before emerged, such as some founders who could make a profit of 200 million at the beginning of the year, and only 80 million in OctoberSome founders encounter a little market turmoil, and they begin to mess up ......The observation of these dynamics will constantly revise the early judgment of investment institutions on the company. Therefore, sometimes some projects have even passed the "pass" of internal risk control, but Liu Zhuang still insists on "slowing down".

*: Respondents are not worried about missing out on quality opportunities?

Of course, there will be a lot of helplessness, and the missed ones are all due to the lack of awareness at the time. Wang Huadong made no secret of it. But his later experience also proved another truth:Sometimes, it's a blessing to miss out.

In 2022, the energy crisis in Europe has pushed up the popularity of overseas household storage, Wang Huadong and his team have held no less than 10 special seminars on overseas household storage and portable energy storage, and the final decision is "no investment". Later, the overseas household storage track was unprecedentedly hot, Jingwei internal "once felt missed", and then "hot" became a "crisis", many companies had to carry out product recalls due to quality and safety issues, and even faced bankruptcy, market sentiment is just like Wang Huadong sighed, "It's good not to invest in this industry";Up to now, overseas household savings have undergone a round of industry reshuffle, and the opportunities and risks will be another world.

In this era, we really have to figure out what is going on in the industry and do a good job of every investment, which is the responsible approach. Wang Huadong said, "Because the longer you stay in this field, you will find that there are too many pits inside." ”

In fact, if you haven't personally experienced the pit of the cycle, it is difficult to truly appreciate the pain of falling into the pit.

In 2018, Jingwei entered the C round of financing of Rongbai Technology. At that time, the investment heat of the power battery track has risen, and more and more irrational factors have been superimposed on the valuation of the enterprise - Rongbai is the same, the valuation has risen a lot compared with a few months ago, but it is still a rare opportunity: Rongbai, which was established in 2014, is already the industry leader;It ranks first in the market share of subdivided ternary cathode materials, and is the first leading supplier of ternary materials in CATL.

But then Liu Zhuang realized that the market was at the top of the upward cycle at that time, and a sharp turn was followed - due to the decline of policy subsidies and structural surplus of products, the entire industry fell into a violent reshuffle, and the stock price of Rongbai Technology fell, and this process lasted for more than a year.

It was also Liu Zhuang's most torturous year. On the one hand, the pressure comes from the stock price of old projects, and on the other hand, it becomes impossible to sell new projects, so even if there are many good projects in the market at that time, and the valuation is not high, he can only watch the "** opportunity rush by."

Not only Liu Zhuang, but also all investors in the TMT era have never seen a "sudden change". As Wang Huadong said, "People who invest in TMT don't know what the cycle is before, because there is only one cycle - that is, up." "AndIn the new energy era, even if you understand the concept of cycle, it is difficult to grasp the law of cycle, and the sudden and drastic cycle rotation far exceeds expectationsWang Huadong often mentions a case internally: in 2022, everyone has a hunch that lithium carbonate** will decline, but who would have thought that it would fall from 600,000 to 150,000 all at once?

Therefore, many adventurous companies will be tripped up by the cycle, and some investors known by Liu Zhuang will slump after the cycle in 2019 and 2020, or completely leave new energy investment;He also prepared for the worst at that time, "The future of new energy is certain, but in a certain period, can an investor survive it?"Can an institution survive?is unknown. ”

In fact,At that time, Jingwei was at such a "crossroads". The signal from the market is extremely poor: the stock price of new energy vehicles listed in the United States continues to be the best, and Ideal and Xiaopeng have not even been listedCan you still break through?

Jingwei's answer fell on action: in September 2020, Jingwei changed the original practice of dividing the team according to the investment stage, and replaced it with a clearer track division, Liu Zhuang, who was previously in the growth team, joined the new energy team led by Wang Huadong, when the team was still only one investor, and by the end of 2020, the new energy cycle picked up, and the team lineup also grew, and there are currently more than 10 people.

Nowadays, the "pass" of Jingwei is in the past, but the awe of the cycle is deeply imprinted in the strategy of new energy investmentAs a result, they have put together a few "pitfall avoidance guidelines".For example, for those founders who have not experienced the industry cycle, they must be cautious;Another example is "don't invest at the peak, or invest in the best of them". Cheng Zi, who is also in the new energy investment team, explained that this strategy "retreats and can be defended", because when the market is down, the head company has the best chance to survive to the end;It is also "attackable", because after a round of cycles and tail clearances, the head company will usher in an outbreak and earn enough profits in the next wave.

The same is true for investment institutions, only by stepping on the pit of the cycle can they make money from the cycle. In the era of new energy investment, the ups and downs of the cycle undoubtedly increase the risk, but on the other hand, it also increases the opportunity:It's not a gust of wind, just blow it, but wave after wave of tidesIf you miss this wave, the next one may already be on your way. Investors who understand the law will be more calm, Wang Huadong said frankly that the current state is much better than the TMT era, "will not be like the mobile Internet era to grab the project period, there is a very strong sense of anxiety, because the industry has to evolve slowly, will not feel that they will really miss anything."

For example, back to overseas household savings, now that the market has fallen, the mentality of the founders of the company has also returned from inflation to calm, and the valuation will be more reasonable. Liu Zhuang revealed that he is now starting to look back at this track and reorganize the companies he has learned about before, "New energy is a cyclical track, so it can be reviewed periodically."

2020 In 2021, Jingwei launched a special "recruitment project", mainly for cross-border talents who have not invested before.

The first and second phases entered the warp and weft.

At that time, we were tasked with finding a new one, which no one paid attention to, but which had the potential to become a big track in the future, the so-called edge track. Yu Xiaoyi recalled that new employees would "rotate" in each partner's team, and finally decide to stay based on the results of two-way selection. In the end, Yu Xiaoyi, who had previously done artificial intelligence at JD.com, became one of the first investors to bet on the "dual carbon" and circular economy opportunitiesCheng Shi, who came in a little later than him, majored in history and worked in a consulting company for 3 years, mainly in the field of new energy.

This is a new attempt made by Jingwei in team building under the new investment ecology. The earliest adjustments began in 2018, and the problems targeted began in 2016. At that time, Jingwei's investment path was top-down directive - partners asked the investment manager what theme they wanted to invest in, but in fact, the former was not sure whether the latter had the ability to do well, but they did not have the energy to fully invest in every industry, and the end result was that many teams were operating ineffectively;In 2018, Jingwei began to slowly transition to a "bottom-up" approach, for projects within a certain investment amount, investment managers can propose their own themes, make breakthroughs in research, and partners play the role of advice and auxiliary judgment in the process - handing over a certain percentage of investment initiative to the front-line team.

Perhaps you can imagine the funny scene mentioned in "Out of Control": in December 1990, after 10 years of hard work, NASA finally assembled a "behemoth" named "Rambler", but the robot that was originally expected to explore Mars faltered even if it walked 100 feet in the yard. Later, they adjusted the scheme and redeveloped the microrobots, once released in groups, they will be out of control, without continuous management, but can complete the detection tasks that the robots with centralized control and clear instructions cannot do.

The same is true for the detection of new tracks, where the efficiency and results of individual advances are better than centralized deployment, but on the other hand, the risk of losing control must be avoided. Wang Huadong was deeply touched by this, "This is much more difficult to manage than if I directly recruit someone and give an instruction, you have to fully believe in his ability, and you have to consider how to communicate with him in the process and how to help him correct ......."It's hard. Therefore,Investment institutions must not only dare to release, but also manage well, in order to take into account the agility and security of investment.

Zhang Ying once described Jingwei as "precision instruments, there are many flywheels" - a flywheel is a track, in the past it was a main wheel of the mobile Internet, and then the flywheel of digital economy, medical care, and consumption began to relay, and now, the flywheel of new energy and new technology has entered the acceleration stage after a difficult start. The high-speed rotation of each flywheel is indispensable to the "precision" device at the back end, which is also an important direction of Jingwei's internal transformation from 2020, that is, to establish system capabilities - lower industrial cognition, more mature echelon, more scientific indicators, and more rigorous judgment.

For example, in the field of hard technology investment such as new energy, through continuous projects and reviews, Jingwei is also constantly iterating on the underlying cognition of industrial investmentFor example, how to determine the investment direction based on the industry penetration index, how to determine the investment time point according to the industry cycle, and how to judge the impact of the industry iteration speed on investment - this point has just been summarized in recent years. Among them, the judgment of people is particularly crucial.

The portrait of the founder of the TMT era is relatively vague, as long as a person is strong enough in a certain aspect, he can bring users up, and other shortcomings can be supplemented later;But if the founders in the technology era have any shortcomings, it will be difficult for the company to do it, so the human factor is more important. Wang Huadong said.

When Jingwei's internal projects are reviewed, they often mention that "this project is not made because people can't do it, and that project is made because people can't do it", but Wang Huadong believes that they need to really figure out what this "line" is. Therefore, in the past three years, he and his team have anchored several standards for founders in several industries such as hard technology and new energy, such as "the founder of upstream companies in the industrial chain must have a technical background", etc., and the standards of "line" are constantly updated with industrial iteration.

"The only time that the development of new investment projects in the past three years has been lower than expected is the only time that it has not been invested according to the standards. ”Now that he mentions it, Wang Huadong is still very annoyed, "The points that will be agreed upon in the future cannot be violated casually." ”

If new energy investors also have so-called portrait characteristics, Wang Huadong should be a typical one: colleagues in the team commented that he "sees very carefully", "only after more verification such as data analysis, can make judgments on people", "can be deeply refined based on front-line interviews", and even Zhang Ying appreciates his "good at thinking" characteristic;On the other hand, from the mobile Internet, new consumption investment smoke all the way to the new energy era, Wang Huadong's "murderous spirit" has not diminished at all, "In the past three years, there are almost no companies that want to invest in that cannot be invested."

In 2022, the investment quota of Haichen Energy Storage Series B was "grabbed" back by Wang Huadong at the last moment - it only took 15 minutes. Wang Huadong stated various conditions to impress the other party and promised to make a decision in the fastest timeAt this time, Wang Pengcheng, co-founder of Haichen Energy Storage, must have had an idea - but there was still one step away, and finally he asked about the projects that Jingwei had invested in before, one of which he happened to know, so he gave the other party a ** in front of the Jingwei investment team, and after hanging up, Wang Pengcheng immediately decided to add Jingwei to the financing list.

There is a very important point in the History of Venture CapitalMuch of the success of venture capital is due to networking. In the field of new energy, a highly cohesive industrial chain means that the nodes of the relationship network are also tighter and denser. A group enterprise will be an LP of an investment institution, and it will also penetrate into the upstream and downstream of the industrial chain and become an industrial investor of start-ups.

Yihong Intelligence came into contact with Jingwei along such a chain - C&D Xinxing Investment, the lead investor of this company's B round, is the LP of Jingwei, so when Yihong Intelligent Series D financing in 2022, C&D Xinxing Investment vigorously introduced Jingwei, the reason is, "Jingwei has done a good job after investment, and everyone can work together to complete Yihong's business in the future."

If the fierce front-line fight of Jingwei is compared to "the wind sweeping the leaves", then on the other hand, the post-investment of Jingwei is "moisturizing things silently".But it is also a weapon for project competition. Since 2014, Jingwei has fully established a post-investment value-added service team, led by Zhang Ying and Xu Chuanchen, and now the post-investment team has nearly 100 people, providing services that not only cover the capacity building required by enterprises at all stages of growth, such as public relations, recruitment, ** relations, legal affairs, equity structure and other more than a dozen professional services, and even emergency medical services for invested companies and founders. Zhang Ying likes to say, "The same investment, different help." ”

Zhang Quan personally felt the "difference" in Zhang Ying's mouth, which was in this year's (2023) Jingweichuang Ronghui and Jingweichuang Huihui activities, in his impression, there were thousands of investors who participated in each event at that time, and more than 100 people added WeChat to him, asked for BP (business plan), and exchanged financing opportunities - this kind of scene was unimaginable for him before. It is conceivable that when another "Wang Pengcheng" ** called Zhang Quan one day, what kind of answer would he hear.

It's not always a harmonious melody, especially in the new energy sector with turbulent cycles, where the valuation of a company soars one moment and may fall to the bottom the nextThe valuation game and see-saw between investors and enterprises will also continue to be staged.

The two sides have been in contact since 2019, but for various reasons, it will not be really delivered until the end of 2022.

I think the most important thing is attitude, from the beginning to the end, we have been objectively communicating with him about the trend of the cycle, explaining our concerns and giving feasible advice - attitude is very important in order to build mutual recognition and mutual trust. In Liu Zhuang's view, only companies that can establish this consensus are worth "grabbing", because in cyclical industries, no company can avoid a decline in performance in a certain periodIf you don't, you may fall into mutual suspicion."

Once, an entrepreneur asked Zhang Ying, "How to establish a comfortable and trusting relationship with investors?"Zhang Ying said bluntly, "This problem is idealistic, and it is difficult for most interpersonal relationships to achieve this, not to mention interests." But he still gave a possible answer"Sincerity is probably a good premise. ”This is also what he asks of himself and the Jingwei investment team.

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