On November 17th, N5Capital’s 2017 Annual General Meeting was held at the Mandarin Oriental in Hong Kong. Attendees include founders of N5Capital’s portfolio companies, N5capital’s existing investors and a number of new investors.

Keynote Speech – The Application of Smart Data and Business Model Development

By TalkingData founder Mr. Leo Cui

In 2013, N5Capital became TalkingData’s first-round investor. Four years later, TalkingData has become China’s largest third-party mobile big data company and a leader in the application of data intelligence in finance, retail and real estate etc. As the number of smart devices surpasses 15 billion, data is transforming the decision-making of the enterprises and improving the quality of human life at a greater pace. Leo Cui shared the success story of TalkingData. So far, TalkingData has connected over 6 billion devices, hereby gathering huge data repositories concerning the mobile behavior of the users on all its telecommunications networks. TalkingData carried out an in-depth exploration in data-based businesses, transforming data into valuable assets.

CONSUMER & FINTECH Panel

New Opportunities from Technology Upgrading and Globalization under B&R

The next session, “Consumer and Fin Tech Panel”, was moderated by Mr. Junchen Pu, Partner of N5Capital. Mr. Junchen Pu shared the investment philosophy of N5Capital when investing in Hot & Hot, Soup Town and TransferEasy and the driving role of technology in the process. He was joined on stage by the three founders and discussed the improvement of supply chain management though technology and the expansion of the Internet-driven businesses.

Hot & Hot is an online crayfish delivery service provider. Relying on a world-wide supply chain and an online-to-offline model, Hot & Hot has achieved rapid growth and become a leader in the industry within a short time. It took Hot & Hot a little about one year to accomplish the goals that could have been fulfilled by the conventional enterprises in 6 to 8 years. The company’s founder Mr. Dong Han believes that this was achieved through integrating industry chain and process, adopting technology and the Internet intelligently.

SoupTown is a newly founded SKU innovative enterprise focusing on standardized soup products. “With the support of N5Capital, Soup Town has invested tremendously in the supply chain and e-business, achieving positive results”, said founder Mr. Chufeng Zhan. The cost of sales of Soup Town has been reduced by 50%-70% compared to its competitors because of mass production and standardized operations. Mr. Chufeng Zhan said that supply chain reconstruction and the Internet have played a decisive role in the development of SoupTown. The operation of SoupTown is boosted by information technology and high degrees of standardization. In addition, 60% of the sales are completed online.

In June 2017, when N5Capital invested in the company, Soup Town had merely 9 stores. So far, it has established 40 stores. Mr. Chufeng Zhan believed that the preference of N5Capital for technology-driven strategies have catapulted SoupTown into the stage of rapid growth. That is the most important reason for the company to decide to cooperate with N5Capital in this phase of financing.

Transfereasy is a fintech company that is an infrastructure builder in the field of cross-border payment settlement. “Against the backdrop of the ‘Belt and the Road’ and RMB internationalization, the financial exchanges between China and foreign countries have reached an unprecedented peak”, said founder Mr. Bin Liu. According to Mr. Bin Liu, the company is building an RMB-centered global settlement infrastructure network which aims to improve compliance efficiency at lower cost, making fund circulation more convenient, transparent and easily monitored. The company has obtained financial licenses in 12 major countries and has set up a massive anti-money laundering data system.

“TransferEasy will generate tremendous business value through its supply-side infrastructure built worldwide, through improving compliance efficiency and channeling fund circulation by means of technology and the Internet”, said Mr. Bin Liu. However, the investment cycle is relatively long. Mr. Bin Liu felt that it is fortunate that N5Capital helped TransferEasy recognize the value of investment in technology and supply side to TransferEasy.

NEW SPORTS Panel

Commercial Opportunities with the Millennials

N5Capital Partner Mr. Eason Liu moderated a session of New Sports Forum and carried out discussion with three founders of N5Capital portfolio companies. They discussed topics such as business model barriers, target crowd profile and future business prospect.

As a well-known brand in e-sports, LGD boasts professional combat teams of Dota2, LoL, OW, and other popular international competitions. The teams rank highly in domestic and international competitions. Ruru says that young eSports enthusiasts between the ages 16-35 constitute the ideal demographic. The company is also seizing the unparalleled opportunity in eSports and real estate. The newly built eSports gaming ground is an impressive 20,000 square meter commercial property. In the future, LGD will expand more into commercial real estate, building eSports towns, eSports youth training bases and eSports experience centers.

Ms. Lynn Zhong, a young female entrepreneur in the field of new sports, founded Fast4ward. Lynn shared her experience of entrepreneurship with the audience backed by stunning data. For example, when the signup quota was published online, it was taken up in seconds. The number of onsite audience has reached 10,000 and over 10 million people have watched the live-streamed races.

In 2017, the Federation of Automobile and Motorcycle Sports of China authorized Fast4ward to organize China Drag Racing Championship (CDRC), the No. 1 drag racing event of the country. The championship has gained cooperation and sponsorship of numerous globally well-known automobile brands and FMCG brands. Lynn Zhong believes that in the future, the Internet game speculation competition based on data-based operation and venue operation will be indispensable and central to the business’s success.

The founder of Rent2Play, Mr. Victor Yang, shared his mission to democratize gaming and make expensive equipment easily accessible to the general public. With this vision in mind, Victor and his partners built the start-up Rent2Play, which leases game accounts to the average game enthusiasts. As a transaction platform, the users’ asset must be 100% secure. Equipped with an in-depth understanding of the security infrastructure, Rent2Play built an anti-bot system, an automated transaction system and a password-free login system. Victor believes that these technological advancements are the most important assets of Rent2Play.

Keynote Speech by N5Capital Founding Partner Will Jiang

To conclude the conference, N5Capital Partner Mr. Will Jiang gave a yearly summary and shared his vision for the future.

The 2017 market is still active, with keywords focusing on AI, cash loans and new retail, as capital continues to stream into these fields. Another phenomenon is that numerous investment institutions are seeking the support of BATJ and other large companies and that “getting Tencent & Alibaba on board” has become the priority of many GPs. In this investment landscape, N5Capital faces both temptations and challenges. However, N5Capital has been adhering to its investment philosophy established since its founding:

• do not chase hot trends/buzz words;
• make judgment independently;
• hold on to long-term value investing.

Consumption has become a major factor that drives the growth of China’s GDP. N5Capital continues to explore investment opportunities in the segment fields of consumption. Compared with “consumption upgrade”, N5Capital attaches greater importance to the enterprise’s reconstruction capacity on the supply-side and Internet driven efficiency on the demand-side. This includes upstream potential, monopoly capacity, technological barriers, industrialization capacity as well as the ability to apply the Internet infrastructure in sales and operation. In addition, against the backdrop of the “Belt and the Road”, the “going global” of Chinese enterprises registers new connotations. The RMB-centered and capital-export focused financial, trade and technological exchanges will bring about tremendous opportunities of entrepreneurship and investment.

In 2018, RMB will become long-term vehicle of investment as the secondary market faces the risk of a bubble burst. Meanwhile, with the wild fluctuation of US stocks in 2017, USD investments will become popular again. In the VC market of 2018, opportunities and challenges will co-exist side by side. N5Capital will forge ahead relentlessly, following its investment philosophy and exploring the new frontier of venture capital.