Science and Technology Innovation Board Daily, November 25th (Reporter Chen Mei) Alibaba has made a move and invested in Fengrui Capital.
Recently, Fengrui Capital underwent a business change. According to data from Cailian Society Venture Capital Communication - Zhizhong, Shanghai Fengrui Ruijia Investment Center (Limited Partnership) under Fengrui Capital has added new partners, including Zibo Huahan Dingsheng Equity Investment Partnership (Limited Partnership), Shanghai Xingjia Equity Investment Partnership (Limited Partnership), Alibaba (China) Co., Ltd., and Ant Group's subsidiary Yunyong Industry Win Win Win (Beijing) Venture Capital Co., Ltd.
As a result, the investment amount of the investment center increased from 1 million RMB to 820 million RMB, an increase of 81900%. In response, a reporter from the Science and Technology Innovation Board Daily called Fengrui Capital, and the latter's source stated that this fundraising is an internal matter of Fengrui Capital. "We do not make official announcements or publish any information."
Alibaba Capital Increase Fengrui Capital
Fengrui Capital was established in December 2015, focusing on seed round, angel, and A-round investments. It is controlled by founder Li Feng through Shanghai Ziyou Investment Management Co., Ltd. and manages a total of 21 funds. The Shanghai Fengrui Ruijia Investment Center, which was increased by Alibaba, is one of them.
As of now, the scale of 21 funds is nearly 6 billion yuan. Since the beginning of this year, under the severe fundraising environment, Fengrui Capital has also moved towards the west. On October 19th, Angel Mother Fund of Chengdu High tech Zone signed a contract with a group of early investment institutions, including Fengrui Capital. Previously, Fengrui Capital also completed a fundraising of 500 million yuan from Zhongxin Group.
This time, Alibaba's capital increase in Fengrui Capital is the latest fundraising by this institution.
Why Alibaba Investment? Market participants generally associate Chen Shi, one of the investment partners of Fengrui Capital. He used to be an Alibaba executive. Before joining Fengrui Capital, Chen Shi had 5 years of experience in Alibaba's management, serving as Vice President of Alibaba's Mobile Business Group, Executive of Alibaba's Culture and Entertainment Group, and Class Committee Member of Youku and UC International.
But investors familiar with Fengrui Capital told the Sci Tech Innovation Board Daily that the underlying logic should be Fengrui Capital's layout in the semiconductor field in recent years.
It is worth noting that in the third quarter financial report of 2023, Alibaba stated that due to the impact of US chip export controls, the complete spin off of Cloud Intelligence Group may not increase shareholder value as expected, so the spin off was suspended. This means that Alibaba Cloud's plan to go public within a year will also be cancelled.
Fengrui Capital has made layout in areas such as optical chips and domestic semiconductor materials.
According to data from Caixin Venture Capital - Zhizhong, in the semiconductor and chip fields, Fengrui Capital has invested in 20 semiconductor chip companies, including Xinyi Information Technology, Gatlan Microelectronics, Xinshijie, Xizhi Technology, Feixin Electronics, Luowei Technology, Elfa Optoelectronics, and Duogan Technology. And it is believed that in the process of refining chip materials in China, domestic materials will gradually gain an advantage.
From the positioning of Alibaba CEO Wu Yongming as a "technology platform enterprise", there should be no doubt that Alibaba will focus on hard technology in the future.
Early investments also require exit
From the perspective of exit, due to being an early investment, only one of the 241 companies invested by Fengrui Capital has achieved VIE listing, namely Qifu Technology-S; The other one is listed on the A-share market - Three Squirrels.
Before the IPO of Three Squirrels, Shanghai Ziyou, the parent company of Fengrui Capital, invested 300 million yuan in Series D financing, holding approximately 5% of the shares. As of the third quarter report, Shanghai Ziyou Investment only holds 1.04% of the shares.
Regarding the exit of early funds, Li Feng, founder of Fengrui Capital, has conducted a review. He stated that at the end of February 2019, the return multiple of the first phase fund was 3.08 times, with an IRR of approximately 70%. At the same time, the DPI of the first phase of the fund is quite impressive, with 7 projects fully or partially exited, and one project in the process of exit delivery, the cumulative exit amount will be close to 300 million.
The essence of venture capital lies in the ability to exit with real money and silver in the end. An investor once stated that investing in cannot be refunded, valuation cannot be sold, and all book returns are fake. "So, especially for localized RMB funds, they should make solid investments and invest in long-term growth companies."
As of now, out of the 241 companies invested by Fengrui Capital, 80 have achieved subsequent rounds of financing, accounting for 33%, including Blue Crystal Microorganisms, Qingtao New Energy, etc.
In addition, Ant Group's subsidiary Yunyong Industry Win Win Win (Beijing) Venture Capital Co., Ltd. has also invested in a number of early-stage technology institutions, including Zhongke Chuangxing and Infinite Fund SEE Fund**
The reporter from the Science and Technology Innovation Board Daily learned that the unlimited fund SEE Fund comes from Tsinghua University and is one of the first members of the "Scientist Fund" in Zhongguancun Science City, focusing on hard technology investment.