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vc industry is currently performing a "wilderness survival".
went from writing letters of apology and guarantees to LP, to requiring entrepreneurs to sign repurchase agreements and dividend agreements, and then to investors becoming investment managers. After withdrawing from the barrier lake, the trust between LP and GP collapsed, and VC investment still needed to continue. VC began to show its unique skills and find its own rhythm of survival.
Titanium Media Venture Capitalists learned that Huo Zhongyan, the former founding partner of Hewhale Capital, bucked the trend and started a new business, establishing Cangyuan Capital. The initial fundraising scale was nearly 300 million. It was the first "wear" industry fund in China. Most of the LPs were in the wear industry. companies in the chain.
What is the "wear" industry fund?
's "wearing industry" covers clothing, accessories, shoes, bags and other categories. This fund invests in new materials in the upstream, including high-tech innovative fibers and fabrics; in new tools in the midstream, including intelligent manufacturing and AI digital applications in the textile and apparel industry; in the downstream Invest in new brands.
Practitioner of "Industrial Venture Capital"
was born in industrial investment. He has managed strategic investments in listed companies and done mergers and acquisitions. He found that strategic synergy and financial return are incompatible goals, and choosing one will hurt the other. So, Huo Zhongyan “Industrial venture capital” was proposed.
He said, "Industrial venture capital is the third type, called meso investment. Meso investment, compared to the macro perspective, does not directly invest in disruptive innovation, but invests in applied innovation of disruptive innovation in the industry. For example, when investing in new material companies, we will invest in the application of new material technology in the field of oils and fabrics and fibers. "Compared with microscopic CVC,
will expand the investment scope from a single company to the entire industry, such as from a certain company. A catering company is enlarged to the whole food, and from a certain clothing brand to the whole clothing, so that there is room to use VC standards to screen out projects with IPO opportunities.
"The industrial venture capital model not only takes into account strategic synergy at the industrial level, but also has solid financial returns." In Huo Zhongyan's view. The core of the
industrial venture capital model is to focus on vertical industries, take old money, invest in new people, and use one fund to solve two problems at the same time: the innovation problem of industry leaders and the development problem of innovative enterprises. In this way, the industrial resources of fund LPs and allies can effectively assist the development of invested projects; conversely, the innovation of invested projects can also feed back to leading companies, becoming their new business partners or even M&A targets.
"Based on this model, we will invest in industries with huge and relatively stable demands such as food and clothing. We hope that in such a vast track, we can assist in industrial upgrading and nurture rich innovations. The specific investment direction is vertically in the industrial chain. Throughout, it includes new materials in the upstream of the industry, intelligent manufacturing and AI digitization in the midstream, and brands and channels in the downstream." Huo Zhongyan said.
Image source: Cangyuan Capital
’s “vertical industry, vertical penetration” investment strategy stems from Huo Zhongyan’s practical experience. He once worked as a financial reporter. In 2006, he was transferred to the investment department by his media group, where he was deeply involved in the actual strategic upgrading of traditional leading enterprises. After the group reorganized a listed company, he was responsible for the latter's strategic investment, including the preparation of company strategies, External investment and mergers and acquisitions, post-merger business integration and preparation of industrial funds, etc. The initial investment training received was all centered around the strategic needs of the industrial group, the core of which was to use capital means to achieve industrial upgrading goals.
later went to work with the senior leaders of listed companies to assist a brand marketing company in listing in Hong Kong, and presided over the entire process of its listing plan, internal compliance, preipo investment, intermediary selection, listing review, and issuance and fundraising; after listing, assisted in its mergers and acquisitions Digital marketing business and industrial park business, exploring the second curve; finally, based on the needs of shareholders, we assisted them in selling the listed company to a consortium to achieve exit.
After leaving the state-owned enterprise, Huo Zhongyan founded an equity investment institution with his old colleagues. In the early days, it focused on mergers and acquisitions and reorganization projects, including Brand China, Huawen Media, etc. Later, it focused on early-stage VC investments, investing in Rongxin Culture (301231.sz), Himalaya, Fandeng Reading, Mei One, Yitiao, and Ban Fish and other projects, and expanded to consumption areas such as food and clothing, covering the entire industry chain such as supply chain, brand, and channel.
's investment career has exceeded 18 years so far, covering various investment types such as industrial incubation, mergers and acquisitions, and VC investments.
Cangyuan Capital’s team is also composed of a group of venture capital and industry veterans. For example, Zhou Xuewen, a veteran industrialist, started out in knitting manufacturing. He was authorized by Septwolves to operate socks and other knitted categories, reaching a scale of 1 billion. Later, he invested in well-known brands such as Jiao Nei and Almod Socks using a "cash + supply chain empowerment" approach. . Today, Zhou Xuewen joins Cangyuan Capital as an industrial partner.
’s industrial investment experience has shaped Huo Zhongyan’s investment worldview: “Capital should serve the development of the industry, not the other way around. Coming from the industry and going to the industry has become a firm practice in the wave of capital serving the industry and moving away from virtual reality to reality. Walker.”
