Text丨Li Jiahui
Editor丨Zhang Rui
On October 12, 2019, Eliud Kipchoge ran a marathon in Vienna, Austria in 1 hour, 59 minutes and 40 seconds, improving the human marathon time to less than 2 hours for the first time. In addition to Kipchoge's amazing skills and abilities, the Nike Air Zoom Alphafly Next% running shoes he wore at the time were credited with it.
Over the past 30 years, material innovations such as EVA, TPU, and PEBA have led to revolutions in the footwear industry. Among them, EVA has become the main choice of Volkswagen sports shoes with good resilience, light material, easy processing and high cost performance, and in the process of EVA performance improvement, if POE is added, the resilience of the sole can usually be increased to 50-55%, or even higher.
POE (polyolefin elastomer) and EVA are more widely used in auto parts, photovoltaic films, wires and cables, etc., and the demand generated by the development of new energy vehicles and photovoltaic industries in recent years is driving the R&D and production of these materials into the fast lane.
In October 2022, Zhongke Kele, which takes POE R&D as its core technology, obtained a Pre-A round of financing, with investors such as IDG Capital, Hefei Innovation Investment, Hefei High-tech Investment, etc., and its new round of financing will also be completed in the near future.
Capital has set its sights on new material companies, and Zhongke Kele is not an exception. IT orange data shows that so far in 2023, a total of 200 investment and financing events have occurred in the field of new materials, with a total amount of 185600 million yuan.
Zhou Liang, general manager of the investment banking department of Huaxing Capital, believes that from the logic of the industrial chain, it is inevitable that new materials will become a hot spot for investment and financing: the manufacturing industry is experiencing the process from the very beginning of "roll products" to "roll equipment" and then to "roll materials". The eyes of capital have shifted upward from the saturated product side, and the era of "investing in materials" has arrived.
So, in the investment and financing of new materials, what kind of enterprises stand on the cusp?
The era of "throwing materials" has arrived
New materials refer to some materials with excellent properties and special functions, or materials that have obvious performance improvement after being improved by traditional materials. New materials are not one industry, nor do they exist in the same industry. There is often a network of intersecting relationships between upstream materials and downstream applications. For example, polyolefin materials can be used in the aerospace field, as well as in the field of new energy and electronic productsIn these fields, countless other materials such as high-temperature insulation tiles, aerogels, and monocrystalline silicon are also needed.
According to the primary market temperature index report released by Huaxing Capital after surveying more than 150 investors, in the first quarter of 2023, the field of new energy & new materials will continue to be hot in the primary market after continuing to rise in the heat of 2022, becoming the only track where investors score more than 8 points (out of 10 points).
In the third quarter of 2023, the popularity of new energy & new materials in the primary market has dropped slightly, but compared with advanced manufacturing, new energy vehicle industry chain, B2B & industrial technology and other tracks, they are still at a high point.
Message**: China Renaissance Capital.
The person in charge of Huaxing Capital also mentioned, "Usually we have a higher reading volume for large-scale investment and financing events, but at the end of 2022, we issued a new material financing event with a small amount of money, which has received very high attention, and even many investors took the initiative to find our PR colleagues and wanted to get to know this company." ”
Specifically,New energy-related materials, semiconductor-related materials, aerospace-related materials and environmentally friendly biomass materials have received the most attention from the capital marketZhou Liang said that most of these fields have the characteristics of strong certainty and fast market growth, and the demand for materials grows fast and has a large volume, so the investment and financing events of new material companies in these fields are more concentrated.
In January 2023, Ningxia Hanyao, which specializes in the research of high-energy-density lithium-rich manganese-based cathode materials, completed the B+ round of financing, with a total of more than 500 million yuan in the B round of financing in September 2022, with CITIC Jinshi, Hongtai**, Shenyin Wanguo Investment, Zhongke Guangrong and Dongfang Jiangxia.
In January 2023, Hebei Kuntian New Energy, an artificial graphite anode material company, completed a pre-IPO round of financing totaling more than 2 billion yuan, which was completed in two rounds by industrial investors and financial investors, including SK China, Sinopec Capital, Fosun Chuangfu, Sany Group, etc., and financial investors including Broadband Capital, Asiana Investment, SITC Investment, Xiamen C&D, etc.
In April 2023, the head R&D company of sodium-ion batteries, Zhongke Haina, completed Series B financing. Since 2018, Zhongke Haina has maintained a high frequency of annual round of financing, and its investors include more than 10 institutions such as mixed reform**, Temasek, Three Gorges Capital, China Development Bank Science and Technology Innovation, Hubble Investment, Oceanpine Capital, Shenzhen Aggregation Capital, Sycamore Tree Capital, Oceanpine Capital, Guoke Jiahe, and Zhongke Chuangxing.
With the blessing of technology and market demand, the track is heating up
In December 2023, Tiancheng Aviation Materials, a R&D manufacturer of titanium alloy materials, announced the completion of a pre-IPO round of financing of more than 600 million yuan, which was jointly invested by CNBM New Materials, CCB Investment, ABC Capital and other companies.
In December 2023, Puli Materials, a carbon dioxide-based material R&D manufacturer, completed nearly 200 million yuan in Series B financing, which was led by Hefei Industrial Investment and followed by PetroChina's Kunlun Trust, Zhongan Capital, Zhishu Capital, and old shareholder Bohuiyuan.
So, what factors have accelerated the heating up of the field of new materials investment and financing?The answer is that technology and market demand are indispensable.
The opportunity for new material enterprises comes from the stock substitution or incremental market: stock substitution refers to the original material production by adopting a new technical path to achieve the purpose of reducing costs or improving production efficiency;The incremental market is a market brought about by the rapid expansion of the scale of material applications, resulting in a growing demand for materials.
Looking at a new material company from the perspective of capital, a key point is to see whether the company's technology has a breakthrough. Zhou Liang said.
Taking Zhongke Kele as an example, its technological breakthrough lies in solving the "stuck neck" problem of domestic high-end polyolefins that have long relied on imports. According to the "China Chemical New Materials Industry Development Report (2022)", high-end polyolefin is the new chemical material with the lowest self-sufficiency rate in China, with a self-sufficiency rate of about 58%, especially in the field of polyolefin elastomers, with an import dependence of 100%.
Foreign polyolefin elastomer is mainly made of ethylene and -olefin polymerization, the process is complex, the cost is high, the performance of polyolefin elastomer prepared by one-step method only with ethylene as a single raw material can also meet the needs of photovoltaic or automotive plastic modification, its technical route is completely different from foreign technology, while simplifying the preparation process, the cost is only about 50% of that of foreign countries.
Polyolefin elastomer application scenario: photovoltaics.
Founded in 2022, relying on the technical support of Professor Chen Changle's research group from the School of Chemistry and Materials Science of the University of Science and Technology of China, Zhongke Kele continues to deepen the research and technology industrialization in the field of polyolefins. The breakthrough of polyolefin elastomer technology of Zhongke Kele has allowed the capital market to see the dawn of "corner overtaking" of domestic materials. At the mass production level, the company already has a ten-ton polyolefin elastomer continuous line production unit, which has been running stably for one year since the beginning of 2023. In the next step, the company is ready to build a 10,000-ton production line for mass production.
Another new material company, Zhongke Baiyijin, has seized the increase in demand for bio-based materials in the low-carbon economy, and traditional chemical companies, daily cosmetics and international brands of food and beverage have joined the ranks of commercial applications of bio-based materials, and some bio-based products are gradually replacing the original petroleum-based products.
Zheng Mingyuan, the core technology leader of Zhongke Baiyijin, said that the biomass ethylene glycol technology has undergone nearly 10 years of research and development process in the laboratory, and with the deepening of the concept of sustainability and the proposal of carbon neutrality goals, the use scenarios of bio-based materials have been further expanded. Based on this demand, biomass ethylene glycol technology has ushered in an opportunity for large-scale industrialization.
Bio-based ethylene glycol can be used in food and beverage packaging.
Founded in 2019 by the Dalian Institute of Chemical Physics of the Chinese Academy of Sciences and Henan Keyuan Industry**, Zhongke Baiyi Gold has received a pre-A round of investment from the Chinese Academy of Sciences. The core technical leader is Academician Zhang Tao of the Chinese Academy of Sciences, and the general manager and technical leader are the leader of the biomass ethylene glycol research group of the Dalian Institute of Chemical Physics, Chinese Academy of Sciences, and the main inventor of biomass catalytic ethylene glycol technology.
Ebang Power has learned that the world's first 1,000-ton straw sugar-to-ethylene glycol pilot project jointly developed by Zhongke Baiyijin, Henan Energy Research Institute, Zhongyuan Dahua and Donghua Engineering Company has completed the verification of the pilot production line and realized the sales of finished products. Zhongke Baiyijin Company plans to land a 10,000-ton biomass ethylene glycol project next yearAt the same time, it will build and operate a 1,000-ton biomass 1,3-propanediol industrial demonstration plant to open up a new field of the company's bio-based diol products.
On the contrary, when the upstream and downstream of some fields expand at the same time, the downstream speed is often faster than the upstream, and the demand pull leads to inflated profits, and when the supply and demand relationship returns to normal, companies without real technical barriers will be eliminated. Another investor shared an interesting phenomenon that some new material companies in the market in the past had good revenues, but they would still disappear after a market cycle. The reason for this is that these companies are only making money from the mismatch between supply and demand under the guise of new materials.
Zhou Liang believes that good technology is a necessary but not sufficient condition for investment and financing. Investors are more concerned about whether a new material has a blue ocean-level market. Whether it is to meet the emerging new needs or alternative needs in the market, new material projects that have passed the market verification are more favored by investors.
Tall technologies have been emerging, from research to industrialization, demand is the biggest driving force. On the contrary, some early-stage companies that "hold a hammer to find a nail" and do not have a clear demand positioning are difficult to attract the attention of investors.
If an early-stage new materials project covers more than 5 applications, we will simply pass it. Zhou Liang said that the industry called this kind of project a pan-material project, and such a project did not think clearly in which field can take the lead in achieving a first-class breakthrough, so it is impossible to answer who will pay, who will use, and there is no clear verification path for customers. From the perspective of investment banks, it is more desirable to see that new material companies have one or two application fields that can be deeply cultivated, and after these fields are verified, they will be extended to more fields.
From R&D to industrialization, the road is long and difficult
Materials are a track with an extremely long cycle, and many technologies are often "sharpened in ten years". Behind the glamour of the new material track is the difficult road from R&D to industrialization.
First of all, scientific research is a threshold, and most of the founding teams of the new material projects that have been invested and financed have strong university backgrounds, and secondly, there is a huge gap between technology and application.
In May 2020, the Ministry of Science and Technology and other nine departments issued the "Pilot Implementation Plan for Giving Scientific Research Personnel the Ownership or Long-term Use Right of Scientific and Technological Achievements", which further stimulated the innovation enthusiasm of scientific researchers.
Chen Changle, the founder of Zhongke Kele and a professor at the University of Science and Technology of China, said that many university teachers have good technology in their hands, but good technology alone is not enough to make entrepreneurship successful. The most important thing for university teachers to start a business is to form a team, and the team should include talents who play various roles in the process of industrialization, including finance, industrial resources, relationships, etc., so that professional people can do professional things in order to improve the probability of success.
Under the leadership of Academician Chen Liquan, based on more than 30 years of experience in lithium-ion battery research and development, the head enterprise of sodium-ion batteries was born from the Institute of Physics of the Chinese Academy of Sciences, and the earliest research and development of sodium-ion batteries in China has been completed. In the face of comparison with lithium batteries, on the one hand, Zhongke Haina adheres to R&D iteration to improve material performance and cell energy density and reduce costsOn the other hand, it also identifies the rigid demand scenarios that are "indispensable" and takes the lead in making commercial breakthroughs.
Ding Runqiang, deputy general manager of Zhongke Haina, said that the origin of Zhongke Haina started from the exploration of the underlying material system of sodium-ion batteries, and has been looking for and researching electrochemical systems that have continuously improved performance but can be mass-produced at the same time.
In 2022, Zhongke Haina will invest in the construction of the world's first 1GWh sodium-ion battery cell production line, and achieve continuous production and shipment in 2023. In terms of short- and medium-distance power, the JAC yttrium equipped with Zhongke Hai sodium sodium-ion battery has been mass-produced and rolled off the assembly line on December 27, 2023, and will start batch delivery after New Year's Day. In the field of energy storage, in 2023, the company has won the bid for a number of sodium electric energy storage projects to achieve large-scale application shipments.
From the perspective of investment, in addition to examining technical barriers and demand rigidity, investors are most concerned about how far the project is from scientific research to industrialization. From the perspective of scientific research, the theoretical performance indicators of many materials are very superior, but in the process of large-scale mass production, issues such as technology maturity, process maturity, industrial chain maturity, and cyclical changes in the application market will continue to challenge the founding team.
The change of the downstream market cycle is a headache for many new material companies. However, companies with continuous iteration of underlying innovation capabilities and differentiated products will still be recognized by downstream customers and continue to receive the attention of the capital market. Zhou Liang said.
Zhou Liang said that the materials industry itself is an industry with a long capitalization cycle, which requires a long cycle of research and development, production and verification, which to a certain extent contradicts the needs of investors to pursue investment exit and high returns. Therefore, in the changing market environment, startups should still focus on business fundamentals, identify product positioning and downstream markets, clarify the underlying genes and core capabilities, smooth the development path, and achieve steady business development.