Exclusive | Source Code Capital, ZhenFund Confirmed to Join In — Wang Huiwen's "Chinese OpenAI" Is Being Scrambled For
China's investment world seems to have gone back to 2016 overnight.
By Lili Yu
Edited by Jing Liu
The first investment spectacle of 2023 arrived without warning.
On February 13, Wang Huiwen, former co-founder of Meituan, announced on social media that he was entering the AI space, establishing Beijing Lightyear Beyond Technology Co. with $50 million in capital and a $200 million valuation. Wang also revealed that "top-tier VCs have already committed $230 million for the next round."
According to multiple sources at Dark Waves, the "top-tier VCs" Wang Huiwen referenced include at least Source Code Capital and ZhenFund.
At one point, rumors circulated that Source Code was prepared to invest $100 million. Source Code Capital founder Yi Cao's WeChat Moments appeared to confirm this: "Congratulations to Lao Wang for the wait, and the industry for finally getting Lao Wang back." But according to our understanding, no one has yet signed formal investment documents with Wang Huiwen's new company, and the (Series B) valuation remains undetermined.
As one of the mobile internet era's most prominent figures, "Wang Huiwen's AI entry" undoubtedly sent ripples through the investment world. For instance, we learned of a photo showing ZhenFund partners Yusen Dai and Yuan Liu, along with Mobvoi founder Zhifei Li, sharing dinner with Wang Huiwen at an izakaya. Yuan Liu noted that Wang's widely circulated "hero's call" post was published during this very meal.
From left to right: Yusen Dai, Wang Huiwen, Zhifei Li, Yuan Liu
According to legend, Yuan Liu was discussing with Yusen Dai that "ZhenFund should really issue a hero's call for this," when Wang Huiwen, sitting nearby, immediately responded: "Then I'll post it right now!" And thus was born that widely shared WeChat screenshot.
Yusen Dai of ZhenFund told Dark Waves that over the past few years, he had "been continuously discussing future directions with Lao Wang, deeply moved by his vision and ideals."
While Source Code Capital declined to comment on the investment itself, partner Yungang Huang expressed strong interest in AI during our interview. He said ChatGPT represents the starting point of a new wave of AI technology — the industrialization of generative AI, or AIGC. It will noticeably drive up investment and participation in this space, which in turn will pull R&D forward to form a new technological wave.
But the path to a Chinese OpenAI will inevitably be long.
Chen Yu, partner at Yunqi Capital, noted that foundation-layer large model investments in particular, given their high technical barriers, long R&D cycles, and substantial capital requirements, are fundamentally resource-intensive (in technology and data) and capital-intensive endeavors — "a business built on money." "Without $200-300 million, you can't even get a seat at the table," so it may ultimately resemble autonomous driving L4: "There won't be many excellent targets, just a handful of companies."
To some extent, this creates difficulties for VCs looking to enter. Yungang Huang also believes that launching Chinese-language large models faces numerous challenges: "Technically, for instance, Chinese training data is harder to acquire than English and exists in smaller volumes; on the application side, the immaturity of China's SaaS market makes it harder for application companies to monetize, which slows platform development at the upper layers; from a broader perspective, domestic efforts currently focus mainly on replicating foreign models, with algorithm innovation largely led abroad. And 'algorithm innovation and replication may look similar, but they're fundamentally different types of work with entirely different demands on team capabilities.'"
We understand that Source Code first connected with Wang Huiwen, then still at Meituan, through their "Code Community" program. Source Code Capital's assessment of him: "As an entrepreneur, he possesses the mental fortitude, intellectual capacity, and physical stamina that Source Code deeply admires."
China's VC industry hasn't seen this kind of excitement in quite some time — there's even an illusion of returning to 2016. Perhaps ChatGPT will eventually become another "trend" that gets debated and even questioned, but for now, it has at least delivered a shot of adrenaline to the investment world, particularly dollar funds.
Image source: Visual China Layout: Du Meng
