Matrix Partners China has long been a Chinese brand.

By Jiaxiang Shi

Edited by Jing Liu

Following Sequoia, BlueRun Ventures, and GGV, Matrix Partners has announced that its China, US, and India operations will adopt independent brands. Similar to Sequoia's renaming logic across its three regions, Matrix Partners India will become DZ47 (inspired by India's vision of becoming a developed nation by 2047), the US arm will keep the Matrix Partners name, and Matrix Partners China will rebrand as MPCi (MPC Investments), while retaining its Chinese name "经纬创投" (Jingwei Venture Capital).

Embracing localization has been the stated priority for dollar-denominated funds undergoing rebranding and spin-offs since last year. A key piece of history here: as local "avatars" of dollar funds that brought venture capital to China, these firms were once tightly knit. Sequoia offers the clearest example — in its early days, it shared operational expertise across regional teams and selectively centralized certain back-office functions globally to ensure consistency. For a long time, Sequoia China and Sequoia US even shared middle and back-office operations.

But "spin-off" isn't the right word for Matrix Partners' rebranding. From day one, each of the three regional teams operated with independent leadership, decision-making, and back offices.

In a response to Anyong Waves, Matrix Partners China stated: "Matrix has been an independent entity and team with independent operations and decision-making from the very beginning — a completely different model from other funds. This logo update doesn't represent any substantive change for us. There's no split. It simply reflects our consistent, independent decision-making and operations. Using the same English name previously created some explanation overhead; the update eliminates that."

Yet perhaps the most significant difference is this: compared to Sequoia or GGV's influence in the US, Matrix Partners' stature in America and Matrix Partners China's standing in China are not even remotely comparable.

In fund strategy, Matrix Partners China has also chosen a path diametrically opposed to its American brand.

In 2008, at the invitation of Matrix Partners partner Tim Barrows, Bo Shao brought together David Zhang and David Su to co-found Matrix Partners China. In its early years, the firm positioned itself as a "fund disruptor": to gain deeper industry understanding, it recruited young talent from internet product management roles; departing from traditional VC "sniper" approaches, it built a nearly 40-person investment team and close to 70-person portfolio services team to achieve broad market coverage — by its tenth anniversary, David Zhang even argued that Matrix Partners China wasn't doing VC at all, "we're building an investment platform."

In September 2019, Matrix Partners China revealed externally that "across PR, government relations, HR, and various other dimensions, we're helping our portfolio companies grow — our approach is completely different. We have close to 120 employees; Matrix Partners US probably has fewer than 20."

Why did Matrix Partners China seek to become a "disruptor"? The answer to that question is also the answer to how it got where it is today. The essence of venture capital lies in capturing that 1% of deals, but when the mobile internet wave arrived, you couldn't just fish with a line — you had to cast wide nets. Following this same logic, the firm managed to land both Li Auto and XPeng in the smart EV space.

At Matrix Partners China's tenth anniversary celebration, partners from Matrix Partners US attended and expressed admiration: "In 30 years in the US, we've backed 500 founders; Matrix Partners China has invested in 500 founders in just 10 years."

In this new market, Matrix Partners China also faced a far more competitive environment. "Investing abroad, you often close a deal over coffee. Can you do that in China? Not necessarily," the firm once observed. In China, not even counting RMB funds, there are at least 20 institutions similar to Matrix Partners China. Simply investing capital might not be enough — "my money needs to be different from other people's money."

Beyond partner track records and expanded portfolio services, what truly sets Matrix Partners China apart is David Zhang himself — "same money, different kind of cool."

Moreover, while many perceive Matrix Partners China as a "foreign-flavored" fund brand, it has in fact been exploring localization for years. The most representative example: it established its first RMB fund as early as 2010. Given their near-total silence on fundraising progress, conservative estimates place their RMB fund count at over 10.

In a previous interview, a Matrix Partners China partner also told Anyong Waves that by end of 2023, new energy, new technology, and industrial chain investments accounted for over 60% of the firm's portfolio.

Beyond this, Matrix Partners China has engaged extensively with local government investment vehicles and municipal governments in recent years. Last year, for instance, they brought several dozen new energy and hard tech companies to Xiamen.

At the 2022 WISE Conference, when asked whether he believed in "Long China," David Zhang responded: "For those of us who have achieved modest success riding the wave of China's economic rise and massive market potential, if we want to reach the pinnacle of our careers, we must remain focused on China. Only by continuing to concentrate on what we do best, right here in China, can we break through the ceiling of our future professional and career trajectories."

Returning to the original topic — "spin-off" is certainly a mischaracterization. For this "fund disruptor," they are simply continuing down the path they originally carved out, only with more resolute steps.

Image source: IC Photo

Layout: Yao Nan