Text | Ren Qian
36氪 was informed that on July 1, Joy Capital announced that the newly raised dual currency fund had completed its first closing, and the target amount of this fundraising was nearly 4 billion yuan. The core LPs are all institutional investors, and the existing LPs will continue to support. So far, the asset management scale of Joy Capital is equivalent to nearly RMB 15 billion.
Joy Capital’s last fundraising was in July 2019. At that time, Joy raised a total of more than 700 million US dollars (including two funds in the early stage and growth stage). At that time, the LP composition not only included a number of sovereign wealth funds, funds of funds, education endowment funds and family funds, but also increased several funds for the first time. Investors in top public pension funds and large insurance companies.
Halfway through 2022, the fundraising market continues to be low, and it is not easy to successfully raise a scale of 4 billion. For Joy, this figure represents 40% of its total AUM over the past six years, representing a big leap forward.
Born in 2015 when a new generation of VC fission, Joy Capital only took three years to have an eye-catching investment portfolio: NIO, Mobike, Tuhu, Ruixing Coffee, Energy Chain and other projects. But after the Ruixing turmoil in early 2020, Joy fell silent for a while. A number of FA people told 36氪, “They have been investing normally, but they are very low-key.”
Liu Erhai has a well-known investment strategy: the base area theory. Over the past six years, Joy Capital has fully demonstrated the feasibility of this theory in the fields of automobiles and travel. Since investing in Yiche.com in 2005, Liu Erhai has successively invested in Shenzhou Car Rental, Uxin Used Car, Weilai Automobile, Tuhu Yangche, Mobike, Energy Chain and other projects: almost every project has opened up a new field of travel. In the direction of the company, many companies have grown into tens of billions of market value.
Especially Mobike and NIO. In 2018, Mobike was acquired by Meituan for $2.7 billion, and Joy, the sole investor in the A round, received a 15-fold return on investment. NIO, which also invested in the A round, is another story: since investing in NIO in 2015, Joy has invested in NIO many times with multiple funds. Especially in January 2020, which was almost the most difficult period for Weilai, Joy led its $100 million debt financing.
If it is said that before 2020, the pleasant start is more concentrated in the fields of travel, food, consumption, etc., then, with the rapid rotation of the wind, the rarer and rarer new investment opportunities, and the violent shock of the VC industry itself, the pleasant “base area” approach Although it is still used, the battlefield will inevitably switch.
Around 2018, Joy Capital began to deploy in the field of hard technology and new infrastructure built by hard technology. After 2021, Joyous will expand to smart hardware, AIoT and robotics, enterprise services, healthcare, food and other fields in addition to automobile transportation. In January 2018, Joyce invested in the A round of investment in the life science intelligent company Meijia Technology, which has recently completed a financing of 300 million US dollars.
In the two years after the Ruixing turmoil, Joy and Liu Erhai remained silent. But two years later, the second half of Ruixing’s story is really surprising: Ruixing Coffee announced the unaudited first quarter financial report of 2022, showing that for the first time, the net profit under the two accounting standards has turned positive. Luckin Coffee achieved a net profit of 16.1 million yuan (GAAP). Luckin also announced on June 6 that the number of stores nationwide exceeded 7,000.
According to 36 Krypton, for four full years since the A round of investment, Joy Capital has invested in Ruixing three times, and has not yet sold Ruixing Coffee shares.
According to IT Orange data, Joy Capital will invest 21 times in 2021, involving an amount of 3.6 billion yuan. Objectively speaking, if you compare funds established at the same time horizontally, this data is not outstanding. But at least from the current results, in 2021 when project valuations are skyrocketing, this may be a more rational choice: with online education falling; consumption slowing down; community group buying, corporate services and other tracks are getting colder, as An FA agency source said, “It may be better to vote less than to vote more.”
Regarding the future investment direction, Liu Erhai, founding partner of Joy Capital, said, “The new fund will continue the ‘base’ strategy, deeply cultivate the fields of automobile and travel, AIoT and robotics, food and health, and develop the theme of the metaverse. “It is particularly important that, The company will continue to incorporate ESG concepts into all aspects of its investment activities. “
In the past two years, China’s primary market has experienced several springs and autumns. Under the two main themes of the weakening of the US dollar, the strengthening of the renminbi, and the shift of the industrial wind direction, many changes have taken place in the ranking and strategies of VC funds. Liu Erhai once said that he is more concerned about the overall return to LPs than the size of the fund.
At present, Liu Erhai is still practicing this. Joy’s current team basically remains in the early 30s, and the size of the single-phase fund has not expanded significantly. But in the face of an increasingly volatile market and peers with larger scale and team, Liu Erhai faces a more challenging journey.
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36Kr Investment Community Investment Network
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