Hillhouse, ZTE, and Shenzhen Venture Capital collectively went to Qingdao

ZTE is an LP and Shenzhen Venture Capital is a GP. These two companies have recently jointly established a new fund in Qingdao.

According to Tianyancha information, on September 20, Qingdao Hongtu Zhanlu Phase II Private Equity Investment Fund Partnership (Limited Partnership) was established. The executive partner is Huizhou Hongtu Investment Management Co., Ltd., with a registered capital of 300 million yuan. The business scope includes Engaged in equity investment, investment management, asset management and other activities with private funds.

At a glance, the shareholders behind this fund are: Huizhou Hongtu Investment Management Co., Ltd., ZTE Corporation, and Shenzhen Hongtu Yuechuan Equity Investment Fund Partnership. Among them, Huizhou Hongtu is a company indirectly 100% controlled by Shenzhen Innovation Investment Group Co., Ltd. (Shenzhen Venture Capital). The largest shareholder of Shenzhen Hongtu Yuechuan Equity Investment Fund Partnership is also Shenzhen Venture Capital. Other shareholders of this entity include Shenzhen Longhua District Guidance Fund, Zhuhai Da Hengqin Group, Zhuhai Jinhang Industrial Investment Group, Shenzhen Yantian Port Capital and other state-owned assets, as well as industrial capital such as Guoguang Electric, and Guosen Capital under Guosen Securities.

Both ZTE and Shenzhen Venture Capital have Shenzhen backgrounds, and joint investment is not new. But the two teamed up to go to Qingdao, which sounds a bit new. It is not only Shenzhen institutions that are targeting Qingdao. Not long ago, Hillhouse also went to Qingdao and invested in a company that does aviation temperature control.

In addition, Qingdao also released a “Virtual Reality Seed Fund” this week. The target size of this group of virtual reality industry guidance funds is 2.5 billion yuan, which is divided into two parts in structure, including a seed fund of 500 million yuan and an industrial investment fund of 2 billion yuan, which is operated and managed by Qingdao Jufeng Chuangying Equity Investment Co., Ltd. Investments are all virtual reality projects in the region, and market-oriented operations.

The Qingdao venture capital circle is still heating up.

ZTE makes investment: also LP and GP

The cooperation between ZTE and Shenzhen Venture Capital is not the first time.

On April 26 this year, ZTE announced that ZTE plans to invest no more than 400 million yuan as a limited partner to subscribe for Shenzhen Hongtu Zhanlu Phase II Equity Investment Partnership (Limited Partnership). Hongtu Zhanlu Phase II Fund mainly invests in growing ICT companies. The size of the fund shall not exceed RMB 1 billion, and the initial fund raised is RMB 300 million.

Among them, Shenzhen Venture Capital and ZTE Corporation jointly contributed 300 million yuan, Huizhou Hongtu Investment Management Co., Ltd. as a GP subscribed 20 million yuan; Shenzhen Innovation Investment Group Co., Ltd. as a limited partner subscribed 180 million yuan; ZTE Corporation Co., Ltd. as a limited partner subscribed for 100 million yuan.

ZTE also has experience in LP and local government funding.

On November 21, 2019, ZTE issued an announcement about Xi’an. ZTE and three local Shaanxi investment institutions jointly launched the “Shaanxi ZTE Innovation Investment Fund Partnership (Limited Partnership)”. Among them, “ZTE Zhongchuang (Xi’an)”, a wholly-owned subsidiary of ZTE, plans to initiate and invest 1 million yuan as a GP, while the listed company plans to invest 39 million yuan as an LP to subscribe for the ZTE Innovation Fund. The overall expected size of this fund is 10 billion.

ZTE and Xi’an have a long history. The founder of ZTE, Hou Weigui, came from the 771 Institute (Xi’an Institute of Microelectronics Technology) of the Ministry of Aeronautics and Astronautics in Xi’an. As early as 2014, ZTE assigned the smart terminal production base project to Xi’an Hi-Tech. Today, the project has an annual production capacity of 30 million units and is the largest intelligent terminal production base in western my country. In 2017, ZTE launched the ZTE Maker Space in Xi’an, focusing on 5G communications, smart terminals, artificial intelligence + and other major directions.

The case of ZTE’s establishment of a fund in Xi’an was written into the annual event of Shaanxi’s capital market by the local financial media. According to local financial observers, this is the first time that ZTE has intervened in Xi’an hard technology in the form of “province, city and enterprise”.

According to the announcement, the ZTE Innovation Fund invests in projects in the fields of ICT and TMT, focusing on early-stage and early-stage companies, as well as mid-stage and late-stage companies. According to Tianyancha, the latest investment case of this fund is that it co-invested in a new energy technology service provider to lead the new energy Pre-A round of financing. Lingchong New Energy was founded by Yuan Qingmin, the former vice president of new energy vehicle charging leader Tedian and general manager of Xi’an R&D Center.

ZTE’s large-scale investment layout began in 2010. This year, it established ZTE Ventures, with ZTE as the controlling shareholder. Zhonghe Chunsheng No. 1 Equity Fund is the first equity investment fund established by ZTE Venture Capital. It was established in 2010 with a fund size of RMB 1 billion and a duration of 5+3 years.

According to statistics, this fund focuses on the field of electronic and optoelectronic equipment, and the number of invested projects accounts for 47.62%. layout. Today, more than 8 projects including Zhaoyi Innovation have exited through IPO.

Qingdao venture capital is still hot

Why did ZTE go to Qingdao?

I have previously concluded in “VC/PE is running to Qingdao” that the vast majority of projects in Qingdao are “the type that RMB funds like”. Looking at the track, these companies are biased towards manufacturing, focusing on segments such as home appliances, dual carbon, new energy, and new materials. This is because Qingdao’s light industry system is relatively complete. There are leading companies in the industry such as Haier and Hisense, and an industrial ecology has also been formed. The talent pool is also good.

No, Hillhouse also went to Qingdao recently and invested in a company that does aviation temperature control.

On August 31, Qingdao Honghu Aviation Technology announced the completion of the 10 million yuan RMB Pre-A round of financing. Tianyancha shows that the investor is Hillhouse Capital. Honghu Aviation Technology was established in December 2021. It is worth mentioning that it is a wholly-owned subsidiary of Haier Bio which is responsible for the aviation temperature control business. With the repeated epidemics, the demand for biomedical transportation has expanded, and the demand in the aviation cold chain logistics market has also increased. At present, this company has joined hands with China Southern Airlines Logistics to realize the first flight of aviation temperature-controlled containers, breaking the monopoly of active temperature-controlled containers by foreign brands, and has initially completed the globalization of the aviation temperature-controlled industry.

ZTE has an industrial layout in Qingdao before. In 2016, Qingdao High-tech Zone and ZTE Netcom signed a cooperation agreement, proposing that the two parties will jointly build the Qingdao Science and Technology Industrial Park project. According to the agreement, ZTE Netcom will build ZTE (Qingdao) software base, ZTE (Qingdao) training base, ZTE (Qingdao) Internet + medical base, etc.

This time, ZTE’s involvement in venture capital is related to the capital investment that Qingdao has opened in recent years.

In 2019, Qingdao proposed to take “double recruitment and double introduction” as the “top-ranking project”, and clearly put forward the goal of “learning from Shenzhen and catching up with Shenzhen” – Coincidentally, Shenzhen Venture Capital and ZTE, who set up the fund this time, are from Shenzhen – -Qingdao aims to build a new important strategic fulcrum for countries in the north of the Yangtze River to open up in depth. “Investing in Qingdao is investing in the national strategy.”

In this context, in 2019, Qingdao proposed to build a global venture capital center in Qingdao, and the market became active.

In terms of fundraising, in 2021, the number of newly raised funds in Qingdao will be 458, a year-on-year increase of 137.3%. The raised amount will be 92.616 billion yuan, a year-on-year increase of 71.6%. The average size of a single fund is 200 million yuan.

On the investment side, as of the end of 2021, Qingdao has accepted a total of 1,360 investment projects of equity venture capital private funds, with an investment scale of 103.7 billion yuan, and more than half of them are concentrated in the four new economic fields.

In terms of exit, in 2021, Qingdao will involve a total of 80 exit cases, of which 70 are IPO exits. Judging from the listing situation, in 2021, Qingdao will add 15 domestic and foreign listed companies, a record high.

In addition to consolidating the original advantageous industries, Qingdao is also vigorously developing the new economy. In 2022, the “List of Companies with the Most Investment Potential in Qingdao” will include a total of 156 companies, all of which are innovative technology-driven companies, mainly in the A round and before the A round, mainly in “new generation information technology”, “new energy, new materials”. “, “Integrated Circuit”, “Medical Health” and other popular tracks.

More non-local institutions have begun to invest in Qingdao.

In 2019, Qingdao set up a 50 billion-scale Qingdao Science and Technology Innovation Fund, and established multiple sub-funds in four major fields. VCs such as Tongchuang Weiye and Meihua Venture Capital have entered the market.

Specifically, in the industrial Internet track, Tongchuang Weiye Industrial Zhilian Fund, Haier Venture Capital Haichuang Zhilian Industrial Internet Fund, Wutongshu Industrial Internet Fund, etc. have been established; the new infrastructure track has established Meihua Venture Capital Technology Fund, Yuanhe Yuandian Technology Fund, etc.; Advanced Manufacturing Track established Blue Zone Semiconductor Fund, Qingdao Yingchuang Technology Fund, Qingdao Sino-Israel High-tech Fund, etc.; Life Science Track established CSPC Xiantong New Drug Fund, Zhongjin Shangyuan Fund, CCB Capital Medical Fund, Maggiore Medical Fund, etc.