The capital market has always been turbulent and unpredictable. How to fight for a bloody path in the arena where the masters gather has never depended on luck.
In recent years, Yuanjing Capital has begun to pay attention to the field of hard technology, and seized the opportunities of the times in the ever-changing industry trends. In 2016, it invested in the ideal car that was not favored, and obtained a huge return on investment. Invested in more than 150 projects including Qingzhou Zhihang, Tuya Smart and Jushuitan.
Today, Yuanjing Capital, which is only 7 years old, is already as famous as some established investment institutions in the market.
Xinzhijia talked to Liu Yiran, a partner of Yuanjing Capital, and tried to gain an insight into the current situation of the intelligent driving industry from his ideas of layout in the field of intelligent driving.
grab the cake
On April 16, 2021, surrounded by countless green ribbons, the world’s first autonomous driving stock, TuSimple Future, was listed on Nasdaq.
On the first day of listing, TuSimple opened at US$40.25 per share in the future, with a market value of over 50 billion yuan. With 4 consecutive rounds of investment, Sina Weibo Innovation Fund also achieved an excess investment return of more than 200 times.
Only half a year after Tucson went public, autonomous driving companies Aurora and Cyngn also successfully listed on Nasdaq, and the valuation of autonomous driving companies in the market has been soaring.
Lured by high valuations and high returns, VCs who have been dormant in the market for a long time can no longer hide their ambition to snatch capital dividends.
For a long time, the intelligent driving industry has become a coveted track for capital with huge commercial imagination space. The future listing of TuSimple will only give capital a booster. Since then, major capitals have flocked to the game.
According to incomplete statistics, since 2021, there have been more than 100 financing events in the intelligent driving industry, and the disclosed financing amount is nearly 60 billion. Among them, Waymo and Cruise received large financing of $2.5 billion and $4.75 billion respectively.
In addition to the continuous heating up of the financing market, the battle for the road is also fierce.
“Star” companies in various fields such as Xiaomi, Huawei, 360, and DJI have crossed the line to “grab the road” and build their own product matrix and business model on the intelligent driving track, which is bound to compete on the intelligent driving track.
Also in April, the first new energy vehicles of some models of domestic independent brands appeared at the Shanghai Auto Show. After years of catching up, domestic brands are rising rapidly, and they seem to have “overtaken” foreign brands in terms of capital attention and topicality. The development momentum of domestic intelligent driving is booming.
In this year, policies related to the autonomous driving industry have also begun to be loosened. Shenzhen, Guangzhou and other cities have successively launched policies to support the commercialization of autonomous driving, and the road to commercialization of intelligent driving has gradually become clear.
Under the linkage effect of all parties, the intelligent driving track is very lively.
squeeze foam
In the past two years, the field of intelligent driving has continued to grow, but at the same time, the bubble is also getting bigger and bigger.
The study of technology requires huge manpower and time costs, and the field of autonomous driving is considered to be an out-and-out money-burning machine.
It is understood that almost all players in this field are in a state of loss. Even leading companies such as TuSimple and Cruise can hardly bear the high R&D costs themselves. Intelligent driving companies can only continue to build momentum and attract money from the market.
Due to its good development prospects and the influence of high-valued self-driving companies, the intelligent driving industry continues to raise funds even in the capital winter affected by the epidemic.
However, the autonomous driving industry still has problems such as insufficient openness of relevant policies and difficult breakthroughs in technical bottlenecks. Large-scale mass production of L4-level autonomous driving cannot be achieved in a short period of time, and the bubble in the intelligent driving industry has been propaganda by capital.
In recent days, the development of intelligent driving has frequently attracted controversy.
In the past period of time, the intelligent driving industry has been mired in layoffs. According to foreign media reports, Argo AI, an autonomous driving company invested by Ford and Volkswagen, is laying off 150 people. AI chief Andrej Karpathy is leaving after Tesla was caught up in layoffs in its self-driving division. In the domestic market, Li Auto and Xiaopeng Motors have also been rumored to lay off employees and break contracts with a large number of fresh graduates.
In addition, the Tesla Model X car accident of Taiwanese star Lin Zhiying and the recently discussed Xiaopeng P7 assisted driving accident once again brought the public’s most concerned intelligent driving safety issue to the forefront. The National Highway Administration released information that from last year to this year , received a total of 367 reports of traffic accidents caused by autonomous driving.
These events aroused public discussions on the development of intelligent driving, and at the same time clearly signaled to the market that the intelligent driving industry should return to rational management and stop advocating bubbles.
In 2022, the capital investment in the intelligent driving industry will be significantly more cautious, and the future market valuation of Tucson, which has the title of “Number One Player in Intelligent Driving”, will also drop again and again.
But Liu Yiran believes that,
The development of the intelligent driving industry has suffered a certain setback, and it has not completely entered the cold winter period. The intelligent driving market is squeezing the bubble.
The so-called bubble squeeze is to exchange time for space, and to achieve market follicles by extending the front.
At present, the commercialization path of intelligent driving is mainly divided into three types:
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The first Tesla model, which collects data and trains models by selling cars and making blood, still emphasizes that the driver is the main driver and is ready to take over the steering wheel at any time. It is relatively flexible. It has certain advantages. It can sell cars and return blood while tempering the technology. It has an unparalleled advantage in cost. The ideal car for Yuanjing Capital to invest in is the Tesla model.
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The second is the Waymo mode, which uses the L4 technology path to achieve unmanned driving. Compared with the Tesla mode, the Waymo mode is more intelligent and relies more on algorithms. Currently, the Waymo mode collects data by building its own fleet. , at a stage where it has not yet been able to get out of the laboratory. Relatively speaking, the Waymo model burns more money.
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The third is the L2 mode, which focuses on assisted driving. The technology in the current market is relatively mature, and the commercialization is early.
Intelligent driving companies on these three tracks are playing hot, and with their own influence, they continue to attract new capital to enter the game. The smart driving track is currently in a state of blooming.
However, it is clear that the development of intelligent driving is a protracted battle, and a little splash in the market is still difficult to stir up the rivers and lakes dominated by leading intelligent driving enterprises for the time being.
Intelligent driving companies headed by Waymo have always been in a high position with technical level advantages and operation models, and have certain advantages in long-term development. If the front line is extended for a longer time, it will only become the future of three or five intelligent driving companies. world.
win with stability
How to obtain greater return on investment with less risk in the crowded intelligent driving industry, the role of investors is particularly important.
Whether it is the previous investment in the Internet field or the layout of the intelligent driving track after joining Yuanjing Capital, Liu Yiran has formed his own style characteristics.
Looking at his investment career, it can be clearly seen that his investment is very cost-effective, and his investment in the middle and late stages is clearly marked.
In Liu Yiran’s view, although Yuanjing Capital is in the early stage of investment, it has a certain error tolerance rate for the founder’s approach, but the founder’s ideas and vision must not be underestimated. Landing is the most direct way to get a return on investment.
Based on this logic, Liu Yiran’s investment has several characteristics:
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Stable layout
Because of the pursuit of higher cost performance, Liu Yiran’s investment layout is slightly stable. Even Liu Yiran himself admitted that in the hot smart driving track, investment cannot be arbitrary.
Before laying out the intelligent driving track, Liu Yiran and the team did a series of industrial research and deductions, summed up the three main commercialization paths in the intelligent driving market, and then compared the advantages of various intelligent driving companies in the market.
Liu Yiran said to Xinzhijia, “Because it’s difficult to tell which direction has the greatest chance, and which one can hit with a single blow, I will make up for it with multiple shots.”
As a result, Yuanjing Capital laid out the three routes of autonomous driving and fully occupied the road.
The commercialization path of the L4-level technology path is not yet clear, and the final implementation lacks certain certainty. Liu Yiran decided to achieve high return on investment by preempting the road.
In April 2020, Yuanjing Capital invested in Qingzhou Zhihang.
Qingzhou Zhihang has a self-developed simulation system. Using simulation to replace a certain degree of road testing can greatly improve code efficiency and capital efficiency, thereby greatly reducing costs. In addition, the core team members of Qingzhou Zhihang are all from the world’s top autonomous driving teams, and they are the first demos of unmanned minibuses in China, and their commercialization prospects are promising.
With a strong technical team and strength, Qingzhou Zhihang is undoubtedly Liu Yiran’s favorite investment target.
Compared with L3 and L4, Liu Yiran was more cautious in choosing the direction of L2, in order to win with stability. L2 is currently at the highest level of commercialization and has more market options. To obtain a higher return on investment, it is necessary to find the most commercialized company in the market. Liu Yiran and his team chose MINIEYE in this way of thinking.
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Pursue market prospects
Investments in the capital market are clearly priced. For investors, commercial realization and return on investment are undoubtedly an important part.
Enterprises with clear business landing plans and realisation capabilities are often favored by capital.
Liu Yiran had a conversation with Li Xiang before investing in Lixiang Auto. Liu Yiran commented that Li Xiang has obvious characteristics as a product manager. His keen market sense and user thinking will definitely win the market for him. In addition, compared with other car companies , Li Auto has a clear commercial landing plan, which is exactly what Yuanjing Capital needs.
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final thought
In addition, Liu Yiran likes to watch the end game.
As an investor, it is best not to be led by the market trend. Only by realizing the final trend of an investment or a thing can you aim at the investment trend. In general, investors need to have a final mindset.
The so-called endgame thinking is reverse thinking. Look to the present from the future.
In the turbulent intelligent driving investment market, Liu Yiran’s steady pursuit of victory, and the mid-to-late investment logic of cost-effectiveness may give the market new inspiration.
Industry becomes forest
Relying on the investment layout of the market in the past, Yuanjing Capital’s investment trend has gradually become clear.
“The understanding of the intelligent driving industry can not only stay in the perspective of intelligence, but should use ecological investment to create a circle of friends in the intelligent driving industry.”
Liu Yiran said.
In the automotive field, electrification, intelligence, intelligent driving, and domestic substitution are the four directions of Yuanjing’s current capital layout. Recently, Wang Kai, the former CTO of Ideal Auto, joined Yuanjing Capital, also with this consideration in mind, hoping to deepen investment in the intelligent driving industry from a larger industrial perspective.
In recent years, the country has begun to vigorously support the development of new energy vehicles. The application of artificial intelligence, big data, cloud computing and other digital technologies has built a new energy ecosystem, and jointly created a new business chain on both sides of automobile equipment manufacturing and operation management. .
The power of new energy vehicle manufacturers continues to rise, and traditional domestic enterprises focusing on the development of fuel vehicles have also begun to transform.
In addition, the development of pure electric technology and the improvement of charging piles have also empowered the development of automobile electrification, and the development of the automobile industry has entered a new stage.
Technologies such as automatic parking, navigation and intelligent driving, automatic following cars, and automatic lane changing have been applied to automobiles. The hardware technology and software strength of intelligent driving are constantly iterating, and traditional automobiles are gradually transformed into intelligent mobile terminals with new energy vehicles as the carrier. Modernization and intelligent driving are the new trends in the development of the automobile industry.
As far as the market is concerned, there are opportunities for domestic replacement of core components, electric drives, wire controls, and middleware, and automakers have also begun to consciously support domestic component suppliers.
Electrification, intelligence, intelligent driving, and domestic replacement may be the biggest opportunities for future development.
New opportunities will also be accompanied by greater risks, and the layout of the new wind direction will inevitably require stronger determination and a longer-term vision, which coincides with the investment principle that Liu Yiran adheres to.
Liu Yiran left Temasek and joined Yuanjing Capital in 2016. Before joining Yuanjing Capital, he led Internet-related investments, including Didi, Xiaomi, and Meituan Dianping, etc. Soon after joining Yuanjing Capital, he led the development of Ideal Auto and others. Investment, and then focus on autonomous driving and the industry chain.
Liu Yiran told Xinzhijia that in the layout of the investment market, market penetration and intelligence are important considerations for Yuanjing Capital’s choice. With these two points, products will have growth opportunities.
In addition, the choice of entrepreneurs is equally important.
Liu Yiran said frankly that the reason for betting on the ideal car is that Li Xiang has a strong understanding of hardware and the Internet, and is also very capable of supply chain integration. In layman’s terms, he understands products and has certain product technical competitiveness and technical appeal in the market, and the facts also strongly prove Liu Yiran’s choice.
In the face of new market trends, Yuanjing Capital always maintains a keen sense of smell and seeks the next economic growth point in the turbulent capital market.
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