This may be the most shocking early-stage funding round of the year.
According to the investment community, Shanghai Hejian Industrial Software Group Co., Ltd. (hejian Industrial Software for short) will complete the previous round of financing of more than 1.1 billion yuan.
So far, the two-year-old joint software company has received nearly 3 billion yuan in angel rounds and Pre-A rounds alone, and has gathered a luxurious investor team behind it——
National Integrated Circuit Industry Investment Fund Phase II, China Internet Investment Fund, Wu Yuefeng Science and Technology, Sequoia China, Weihao Innovation, Shenzhen Venture Capital, SAIC Group's Shangying Capital, IDG Capital, Guoke Investment, China Automotive Chip Alliance , Feixiang Capital, GAC Capital and many other well-known institutions, as well as Wentai Technology, Vail
Behind him is Pan Jianyue, the founding partner of Wu Yuefeng Capital, the VC boss.
After graduating from Tsinghua University in his early years, he and his alumni founded Wu Yuefeng Capital, which spanned the semiconductor industry.
In 2020, he formed a team to formally establish Hejian Industrial Software and began the incubation journey.
At this point, well-known VCs began to incubate a new trend in venture capital.
Sequoia China, Hillhouse Ventures, IDG Capital, Legend Capital, Aurora Ventures, Sinovation Ventures... not only intensively invest in seed rounds and angel rounds, but also spend their energy to personally participate in incubation projects.
The lessons from the late valuation bubble are still fresh in our minds, and everyone is pursuing faster and faster.
This is the first act in the history of Chinese venture capital.
VC big shot incubation
Tsinghua people created unicorns
Who is Pan Jianyue?
Pan Jianyue, who was born in 1967, graduated from Tsinghua University with a bachelor's degree and served as the president of China and the Asia-Pacific region of New Thinking Technology, the world's largest EDA company.
In 2011, he founded Wu Yuefeng Capital with Tsinghua alumni Wu Ping and Li Feng, focusing on investment in high-tech emerging industries. The core areas include integrated circuits, mobile Internet, energy-saving and environmental protection technology, clean energy, biomedicine, etc.
During this period, Pan Jianyue invested in many well-known companies such as Spreadtrum, GigaDevice, Kuaike, Rockchip, Guangli Micro, Weijie Chuangxin, Saiwei, Jihe New Materials, Huaqin Technology, etc. A listed chip company also participated in the restructuring of Beijing Junzheng.
Pan Jianyue has rich experience in cross-border mergers and acquisitions. He invested in OmniVision Technology, promoted the integration of OmniVision Technology and Weill Holdings, and led the completion of the privatization of Shanghai Angbao Electronics.
Pan Jianyue has always been active in the semiconductor field, but he did not invest in EDA projects in his early years.
Pan Jianyue said in a public interview: "Compared with the imagination space of Chinese chips, the market space of the EDA track is not enough.
"
By May 2020, Pan Jianyue changed his mind.
At that time, when he communicated with an industry expert, he learned that the three most important links in the future development of China's chip industry are equipment, materials, and EDA.
"You know so much about EDA, you should bear this responsibility.
" This sentence deeply touched Pan Jianyue.
In the same year, Pan Jianyue found the original New Thinking Technology Fellow, Vice President of R&D Guo Lifu, and Xu Yun, the "female head" of Cadence in China, another international EDA giant, and formally founded a domestic EDA company - a joint venture. See the work soft.
Based on application scenarios, the use of EDA tools is mainly divided into design, verification, packaging, manufacturing, etc. Among them, verification is the weakest link of domestic EDA tools.
To this end, Pan Jianyue’s team decided to use verification as the starting point to start a business.
At the beginning of its establishment, Pan Jianyue gave full play to the advantages of the investment circle.
In 2023, Hejian Industrial Software successively invested in Shanghai Akasi, an EDA company, and Shanghai Gubo Technology, a domestic chip testing and R&D collaborative process tool supplier.
After that, Hejiangong Software’s employees quickly expanded to 300, and the research and development team exceeded 220.
More than half a year after its establishment, Hejian Industrial Software launched China’s first commercial-grade digital verification simulator (UVS) with independent intellectual property rights in October 2023. It has received support from China’s leading customers and helped The product is polished repeatedly.
During the Shanghai epidemic, the software development progress of United Company was not greatly affected.
Recently, the company launched 5 EDA products and solutions in one go to solve the challenges of different tasks in chip development, such as functional verification, debugging and large-scale test management, and advanced packaging system-level design cooperation.
As Shanghai returns to normal life, Hejian Industrial Software announced a blockbuster financing of more than 1.1 billion yuan.
This financing includes not only well-known VCs such as IDG Capital, Guoke Investment, and Wu Yuefeng Capital, but also industrial capitals such as SAIC Group's Shangqi Capital, China Automotive Chip Alliance, and GAC Capital, with a luxurious lineup.
It is worth mentioning that the last financing of United Company Software was as high as 1.7 billion yuan, which was the largest single round of financing in the domestic EDA field.
So far, the two rounds of financing of M&A Datingsoft have accumulated nearly 3 billion yuan, which is particularly rare in the context of the VC/PE brake.
The mother of chips, EDA ignited
Behind the financing of Hejian Industrial Software is a high-profile track - EDA.
EDA is electronic design automation, that is, the automation of electronic design. It is a design tool that uses computer software to complete large-scale integrated circuit design, simulation, verification and other processes, and is mastered by chip engineers
How important is EDA? It runs through the design, manufacturing, and block testing of integrated circuits. It is one of the strategic foundation pillars of the integrated circuit industry and is also known as the "mother of chips."
It is often said in the semiconductor circle: "Those who have the say in EDA and the lifeline of IC can attack latecomers in the chip industry."
"In the alternative of domestic semiconductors In this great journey, it is no exaggeration to say that EDA is a 'stuck' link that cannot be bypassed.
In recent years, the EDA industry, which has been forgotten by many people, has ushered in a small peak of entrepreneurship. With the arrival of VC/PE, many well-known start-up companies have emerged.
For example, Xinhua Zhang.
Established in March 2020, Wang Libin, the founder of Xinhuazhang, works for a leading international EDA company and has more than 30 years of experience in technology development and company operation management in the electronics industry.
Since its establishment, Xinhuazhang has completed the independent research and development of 4 verification EDA products in less than two years, and has obtained orders from well-known domestic chip customers.
Huazhang is even more popular in the VC/PE circle.
In the first year of its establishment, Xinhuazhang completed four rounds of financing, as well as well-known investment institutions such as Hillhouse Venture Capital, Wuyuan Capital, Center Juyuan, and Songhe Capital. In 2023, Xinhua Chapter will also be a must-discuss item for the investment committees of various investment institutions, with well-known investment institutions such as Sequoia Broadband Digital Industry Fund, Cloud Fund, Matrix Partners, Gaorong Capital, and China Capital investing in the company.
In January this year, Xinhuazhang received hundreds of millions of Pre-B rounds of financing invested by China Development Bank Manufacturing Transformation and Upgrading Fund.
It is reported that Xinhuazhang is launching new financing, and the competition is also very fierce.
In addition, emerging companies such as Banxin Technology, Xinxingji, Xinhe Semiconductor, Robei, Weixin Technology, Innoda, and Peifengtunan have sprung up like mushrooms after a rain, and various VC/PEs have resorted to Every effort was made and the competition was fierce.
At the same time, Huawei Hubble also rushed into the EDA track and invested in many companies such as Jiutongfang Microelectronics, Lixin Software, Wuxi Feipu Electronics, and Asuka.
Among them, Lixin Software, founded by Fudan professor Chen Jianli, and Asuka, founded by industry veteran Yuan Jun, were selected as Huawei within two years of their establishment.
However, there are also investors who are skeptical about the VC/PE layout of EDA.
“Huawei’s investment in EDA software can be understood as considering it from the perspective of its own business.
However, when VC/PE enters the EDA course, whether they can obtain the ideal return on investment must be questioned.
“Shanghai’s early VC partners frankly expressed their concerns.
“Throwing out is the friend of time.
Investors who are concerned about South China Semiconductor bluntly say that EDA is too difficult to overtake in corners, and there are too many patent barriers for domestic substitution.
“But from the perspective of national security and enterprise supply chain, we must have EDA. This is a rigid need.
”
The strategic position of EDA, It has become the most popular knowledge in the circle.
The global EDA market size in 2020 is US$11.467 billion, a year-on-year increase of 11.63%.
Although the EDA industry accounts for a small proportion of the overall market size of the integrated circuit industry, it supports and affects the integrated circuit industry worth hundreds of billions of dollars by leveraging the entire integrated circuit industry.
Therefore, in the deserted year of 2022, when EDA officially announced its financing of over 100 million yuan - in February, the large EDA company "Xingxin" officially announced the completion of Series B financing of more than 100 million yuan, SMIC's source of financing Received investment, it can be seen that Huaye Tiancheng Capital and other institutions participated in the investment in March. Xinsiwei tens of millions of yuan in angel round financing, Huiyou Capital led the investment, Meihua Venture Capital and...
In order to find EDA Project, VC/PE went to Shanghai like crazy at the beginning of the year.
Tianyan testing shows that there are about 30 domestic EDA companies, mainly concentrated in Shanghai, Beijing, Jiangsu and other places.
Among them, 80% of EDA companies come from the Yangtze River Delta region with Shanghai as the core, such as Guowei Silxin, Xinhe Semiconductor, Prolan Electronics, Lixin Software, Akasi Microelectronics, and Instant Star Representative companies such as Electronics, Hejian Industrial Software, Banxin Technology, and Jiukong Intelligence.
In addition, Guanlun Electronics, the first domestic EDA company, also comes from Zhangjiang, Shanghai.
At the end of 2023, Banlun Electronics was successfully listed on the Science and Technology Innovation Board of the Shanghai Stock Exchange, becoming the first domestic EDA company with a current market value of more than US$12 billion.
BGI Jiuji, which is going to the IPO issuance registration stage, and Guowei Sierxin, which has suspended its review due to the epidemic, are both from Shanghai.
Based on the semiconductor industry ecology accumulated over many years, Shanghai has successfully "opened" many EDA companies.
“Semiconductors, the Pearl River Delta really can’t compete with Shanghai at present.
A hard technology investor in Shenzhen invested in an EDA company last year and tried to persuade it to settle in Shenzhen. Entrepreneur He made a detailed comparison of the industrial status and policy strength of the Pearl River Delta and the Yangtze River Delta, and described the case of Shanghai.
“We have encountered this situation many times and there is nothing we can do.
”
The later stage is too complicated, and VC will be replaced in the early stage
End of incubation
From EDA to semiconductors, to new energy and synthesis High-tech fields with extremely high thresholds, such as biology, are now a battlefield where various VC/PE companies are fighting against each other.
After going around the institutions, the investment community heard the same voice about good projects. It’s getting harder and harder to get robbed. “Either the valuation is too high, or it doesn’t work, or you can’t squeeze in.”
“Instead of looking around and worrying, it’s better to just incubate.
“A veteran Beijing technology VC partner said frankly that if the project is always in your hands through FA, the valuation will rise and investors will easily fall into vicious competition.
“VC is An industry that tests cognition and judgment very much. From my experience, incubation - actively conceiving projects, identifying teams, and filling gaps in the industry is the most effective and safest early investment.
”
This is not an isolated case. End-of-life incubation has swept the VC circle.
In July 2020, Sequoia Capital opened its first domestic industry incubation center—— The "Sequoia Digital Intelligence Industry Incubation Center" announced its official launch in Shanghai Zhangjiang Artificial Intelligence Island.
As of July 2023, Sequoia Capital has 4 incubators in Beijing and Shanghai, covering digital technology. and smart medical field
Hurry up, hurry up.
Today’s Sequoia China invests in early stages “earlier” – incubating companies from the very beginning, providing incubation capability services for start-up companies after investing in one-stop companies, and actively going to the source.” Gather here the shining stars in the starry sky.”
Here is a typical case - Wei Ling Technology.
This is a company settled in the Sequoia Digital Intelligent Industry Incubation Center. It was established in December 2020. From entering the incubator to July 2023, with the support of Sequoia China, Wei Ling Technology has gone from A team of 5 people has grown to a team size of more than 60 people, achieving sustainable growth in performance.
Nothing is unique. In May 2023, the Roche China Accelerator was officially launched at the Shanghai Zhangjiang Hi-Tech Roche Park.
At the launch ceremony, Hillhouse Ventures and Roche signed a strategic cooperation agreement.
Yi Nuoqing, Hillhouse's co-chief investment officer and partner, said in his speech that Hillhouse Ventures will launch the Roche China Accelerator to jointly incubate and support the growth of local medical innovation companies.
There is also IDG Capital. Since 2015, projects such as Fengwu Technology, Decibeitong, and Hengxuan Technology have been incubated one after another. Among them, Hengxuan Technology will be listed on the Science and Technology Innovation Board in 2020.
In 2023, IDG Capital’s Innovation Investment Research Institute, MGI and Lanhong Life Sciences Accelerator jointly hosted an acceleration camp for start-ups and entrepreneurial teams in the field of life sciences.
In addition, well-known investment institutions such as Legend Capital, Sinovation Ventures, and Aurora Venture Capital have also begun incubation.
In 2023, Innovation Qizhi, an AI company personally incubated by Kai-fu Lee, was listed on the main board of the Hong Kong Stock Exchange, with a latest market value of approximately US$12 billion. In recent years, Aurora Venture Capital has incubated well-known projects such as Hechuan Technology, Black Sesame Intelligence, Denglin Technology, and Qingfeng Technology. Legend Capital has invested in nearly 10 medical projects through the "Greenfield Investment Plan". Ecological incubation has also become an important aspect of Legend Capital. One of the early investment strategies.
So, why do well-known VCs start to incubate one after another?
On the one hand, leading institutions have accumulated rich incubation experience and strength with the development and growth of many well-known companies; on the other hand, the current project valuations are getting higher and higher, and they are more likely to make money in the future. .
More importantly, in the era of high-tech venture capital, post-investment value growth is very important.
“We are facing more and more ‘imperfect’ entrepreneurs - China’s education system and the experience of most overseas returnees determine that they are technology and product giants, but they are likely to be sales market and manpower giants. The dwarves in fields such as resource management and legal patents will systematically help investors fill the shortcomings of entrepreneurs
"Investors who have incubated multiple hard technology projects are deeply moved.
By participating in business operations in the early stages, it is easier for entrepreneurs and investors to establish trust, which provides a very good foundation for post-investment management and guidance support for future investors.
In addition, due to "invest less, invest faster, invest again", such projects often achieve the greatest returns.
Go early - it has become common knowledge in the VC circle and an indispensable part of the head organization.
This is the next battlefield for Chinese VCs.
This article comes from the investment community
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