Lanchi Ventures has decided to change its English name to Lanchi — a move the firm says better captures its spirit of "returning to where it came from."

By Qian Ren

"An Yong Waves" has learned that Lanchi Ventures has officially announced a change to its English brand name, becoming "Lanchi Ventures" and no longer sharing the name with Silicon Valley venture fund BlueRun Ventures.

Although Lanchi Ventures has operated independently for many years, it had continued to use the name BlueRun Ventures China until now. Managing Partner David Chen explained to us: "Out of shared investment philosophy and deep friendship."

Regarding the 2023 decision to rebrand, Chen said: because the global nature of technology gives Chinese entrepreneurs worldwide opportunities, and Lanchi's portfolio companies are increasingly showing global characteristics, "an independent English brand helps us better serve entrepreneurs."

To date, Lanchi Ventures manages over RMB 15 billion in assets and has invested in nearly 200 companies across hard tech and innovative interaction, enterprise technology, consumer technology, and biotech — making it one of the largest early-stage funds.

What is a "new species that redefines the future"? Most funds today shout about "investing early, investing small, investing in technology," but Lanchi has been practicing this philosophy for years.

This may be attributable to Chen's background. A tech-minded engineer who loves underlying technology, when he came to China in 2005, he wanted to invest in innovative technology projects. But at the time, the country was full of internet opportunities, with little innovative technology to invest in. Chen judged that China's growth over the past decade-plus had relied on demographic and traffic dividends, but these would gradually fade. What followed would be the dividend of engineers and technological innovation. This would be the driving factor for development over the next decade, and also the reason Lanchi began laying out early-stage technology innovation projects years ago.

But it may also come down to a somewhat abstract reason: mission. Chen told "An Yong Waves" that Lanchi once reviewed all its previous portfolio companies and found that what truly excited them wasn't "successful" projects, but rather "new species that go from zero to one, redefining future life and technology." Such new species have two traits: first, not micro-innovation, but innovation with the potential to redefine the future; second, positive value to society.

So starting in 2012, while many funds that started alongside Lanchi were still betting on internet model innovation, Lanchi began laying out artificial intelligence, cloud computing, and big data. Around 2016, when O2O was hot, Lanchi turned its attention to new energy, robotics, smart hardware, and other industries. By 2018, hard tech had become a major theme for Lanchi Ventures. And today, Lanchi focuses on frontier technologies that can still redefine the future, such as next-generation AI, fourth-generation semiconductors, and controlled nuclear fusion.

Going from zero to one determines that Lanchi consistently stays "early-stage." How early? Managing Partner Terry Zhu once explained: early enough that entrepreneurs are still in the trial-and-error and exploration phase of going from zero to one in their business — meaning the business prototype may not have fully formed yet, and they're still searching for the entry point. "How to select people, how to select opportunities, how to manage risk at this stage — the required skill set is different. This is where we focus and feel a real sense of accomplishment."

If moving earlier was going with the flow for Lanchi, which already had early-stage DNA, then identifying new species ahead of time and getting in early was another major decision Lanchi made in recent years.

His work experience in Silicon Valley convinced Chen that "disruptive change often starts from the most marginal places," with the key being the identification of real demand. Lanchi summarized its hard tech investment methodology early on: hard tech, soft landing — seeking investment opportunities that combine high-barrier frontier technology with differentiated scenario deployment capabilities. "Only this way can we foresee inflection points in demand change ahead of time, position ourselves on the eve of commercial scale-up of technology applications, and connect technology with market demand changes earlier," Chen said.

This investment methodology drove Lanchi to invest in a batch of projects that seemed "non-mainstream" at the time but later exploded into the mainstream.

Chen still remembers around 2015, when Lanchi was most often questioned by outsiders: "At this point in time, why are you investing in cloud-native, in robotics, in new energy vehicles?" As early as 2013-2014, when researching the new energy vehicle track, Chen found experts from European and American car brands and asked if they thought new energy vehicles had a chance. Their answer: impossible, very difficult, market too small.

But ultimately, Lanchi chose to support Li Auto for five consecutive rounds. Terry Zhu once mentioned the reason: "Because Li Xiang kept seeing the future landscape more clearly, including figuring out the technology path pointing to the endgame — vehicle models, product pricing, user needs, how the technology path iterates, the key points of autonomous driving, and so on."

This approach to deduction is precisely analogous to making hard tech investments. In Chen's view, traditional investing focuses more on current revenue and profit, but tech investing requires deduction. "The current demand may be marginal or even unnoticed by anyone. The key is whether this demand will evolve in five or ten years."

China Advantage and Globalization

If finding new species is why Lanchi set out, then this rebranding largely answers where Lanchi wants to go.

When discussing the rebranding decision, Chen mentioned "globalization" twice, which can actually be understood as pointing to two groups of entrepreneurs: first, Chinese entrepreneurs worldwide whom Lanchi has not yet invested in; second, among Lanchi's existing portfolio companies, those expanding the scope of their innovation to the entire world. In a more open investment environment, Lanchi clearly needs an independent English name to better serve entrepreneurs.

And both depart from the same starting point: China's comparative advantage. Terry Zhu once stated: "China has leading competitive advantages in deep technologies such as robotics, new energy, AI infrastructure and applications, consumer technology, and semiconductors. These technologies are welcomed around the world." That is, based on talent and industrial advantages, Chinese entrepreneurs have already encountered the opportunity to build world-class brands.

However, Chen also admits that building a world-class brand is no small test for any entrepreneur: "When competing for a big opportunity, you're competing with the whole world, with relatively more and stronger opponents. The intensity of competition and demands on the team are different. If you can't achieve world-class status, it's hard to have a chance of winning."

This is exactly where Lanchi hopes to make a difference. Zhu said: "Before formulating a global strategy, entrepreneurs need to figure out how to leverage the comparative advantages of the domestic market and the policy influence of different markets, so they can strike out more focused to achieve success. Lanchi wants to help Chinese entrepreneurs achieve this goal."

"An Yong Waves" learned that among Lanchi's portfolio companies, over 50% have overseas market presence. Among them, Gaussian Robotics entered 50 countries and regions over six years, including 27 European countries such as France and Germany; while Yimai Auto has become one of China's largest new energy vehicle export platforms. Meanwhile, UniUni, which Lanchi invested in this year, is a last-mile delivery platform that, after covering Canada, has successfully entered the US logistics market.

Beyond globalization, deeper industry engagement is also an important direction for Lanchi. In China's current primary market, the investment mainline has already evolved from pure financial purposes toward an industrial path. The world of industrial capital is completely different from pure market-driven funds, with different players and approaches.

"When an industrial ecosystem is very clear and can quickly create upstream and downstream connections, industrial funds built around this ecosystem play a more significant role," Chen told us. The value-adding capacity of pure financial funds is, in many ways, not on the same magnitude as theirs. And as an early-stage fund, Lanchi's solution is: close cooperation with industrial funds, and finding "new species" at industry intersection points.

As for the fund size question that all partners consider, Chen's answer remains "restraint": you can't blindly pursue scale, but you also need to ensure at least the scale of a large VC fund — so you have sufficient capital to continue supporting new species companies in later stages. Chen believes that expansion presupposes more diversified asset management capabilities, and facts have proven that not every institution can succeed.

Image source | IC Photo

Layout | Meng Du