Who Is Horizon Robotics' Most Important Investor?

By Zhiyan Chen

Edited by Jing Liu

A full decade after its founding, Horizon Robotics finally listed on the Hong Kong Stock Exchange. On the morning of October 24, the autonomous driving technology company surged 28.32% on its first trading day, reaching a market cap of over HK$66 billion. It was also the largest tech IPO in Hong Kong this year.

Dark Waves has previously dissected the funding stories of many star companies. At their core, these tales are mostly about regret or sighs brought by wealth effects. Horizon Robotics' funding journey was different. As a star entrepreneur, Kai Yu founded Horizon Robotics at a time when capital and confidence were abundant. Its early fundraising went remarkably smoothly, giving rise to quite a few urban legends of the dollar-fund era. But the story soon progressed to a more arduous and concrete chapter: a phase built on multiple rounds of strategic capital, one purchase order at a time.

According to incomplete statistics from Dark Waves, over the past decade, more than a hundred institutions have invested in Horizon Robotics. Its Series C alone drew dozens of investors and was completed in roughly ten separate tranches — a spectacle virtually unprecedented among Chinese startups.

For investors, returns are of course the gold standard. Judging by Horizon Robotics' current market cap, it's hard to call this a spectacular return. Yet every investor we interviewed said that from day one, they knew what Horizon Robotics set out to do would inevitably be difficult. Even measuring success by IPO standards, they agreed it's still too early to tell.

In an era of explosive growth, a company's rise is typically filled with capital stories of kings and conquerors. But in Horizon Robotics' story, whether financial investors or strategic ones, each played a role of "appropriate positioning": indispensable, yet never stealing the spotlight.

Dark Waves interviewed nearly ten Horizon Robotics investors to unpack one question: In a technology-driven era of entrepreneurship, what role does investment play in the evolution of a company, an industry, and an innovation?

The Age of Legendary Stories

Linear Capital's Harry Wang: The First to Decide to Invest

This investment has a long backstory.

The two first met on November 19, 2013, at the inaugural TechCrunch International Innovation Summit in Shanghai. At the time, Yu was still the Executive Deputy Director of Baidu's Institute of Deep Learning; Wang had already left Facebook, where his book Building Facebook had become a tech-circle bestseller, and was doing some angel investing.

At the TechCrunch event, they each had their own sessions and didn't know each other, only that they were "friends of friends." After exchanging WeChat contacts, they impulsively chatted for hours at a nearby Starbucks, reportedly on "how deep learning could transform the world."

Nothing happened for the next two years. But whenever Wang traveled to Beijing for work, he'd meet up with Yu. During this period, Yu repeatedly talked about how artificial intelligence and deep learning could change the world. Though the direction of "computing power + algorithms" hardware-software integration was still far from clear, Wang's intuition told him this was someone he had to back.

Wang later described his approach to this "technical, visionary, and aspirational" entrepreneur as a subtle "seeding strategy": occasionally discussing "whether we should go do something big together?" or "if you choose to start a company, how could I support you?" So when discussing this investment, Wang said he essentially "talked Yu into" starting a company.

Horizon Robotics became the first project after Wang founded Linear Capital. From this starting point, Linear became one of the few domestic VC firms that "only invests in technology."

Looking at the post-IPO results, for VCs who once routinely saw returns of tens or hundreds of times, Horizon Robotics' returns for early investors are hardly astonishing.

"In tech investing, a tenfold overall return is already top-tier. Our investment in Horizon Robotics far exceeded that," Wang once remarked with some emotion. Tech investing is fundamentally a game of "not playing for odds, but for win rates." What mattered more was Yu's ideal of using technology to change the world.

Hillhouse Capital: "A Very Meaningful Hour and a Half"

Not long after, Wang introduced Yu to Hillhouse Capital. In September 2014, the first Hillhouse person to meet Yu was Liang Li.

Liang Li had been at Hillhouse since 2005 and was one of its founding partners. A graduate of Tsinghua University's Department of Automation, his academic affinity helped him connect with Yu. Soon, Liang brought Yu to meet Lei Zhang at Hillhouse's Beijing office.

Yu once recalled his first meeting with Zhang: an hour and a half that was "very meaningful" and "particularly resonant."

At this point, Horizon Robotics hadn't fully decided on automotive as its landing scenario. But the three discussed automotive industry chains, Mobileye (an Israeli company focused on vision algorithms and chips), and automotive-related industrial and business scenarios. In that early stage of autonomous driving development, few in the investment industry were paying attention to Mobileye. Yet Yu discovered that Zhang and Liang had done vertical research.

Yu had worried that what he wanted to do would be too difficult and time-consuming for investors to understand. Unexpectedly, Hillhouse made its investment decision quickly. Zhang even encouraged him: "Entrepreneurs should enjoy a period of being misunderstood. When everyone thinks you're a fool, that's exactly when you can really get things done."

The investment was finalized swiftly. Thereafter, Hillhouse's significance for Horizon Robotics was partly resource-based — connecting the company with partners like Midea and Belle, helping the early-stage startup find its first major customers and business landing scenarios. More important was perhaps strategic resonance and conceptual inspiration. Yu mentioned that Zhang constantly warned against "short-term behavior," "often citing the strategy that Zhu Sheng, a founding meritorious official of the Ming Dynasty, offered to Zhu Yuanzhang: build high walls, store ample grain, and delay claiming kingship."

These ideas are visible in Yu's later public statements. For instance, when Horizon Robotics reached second place in market share in 2023, Yu explicitly stated that being number two long-term was perfectly fine.

Hillhouse invested in Horizon Robotics across seven rounds total. In 2017, Liang joined the board.

For Hillhouse, Horizon Robotics was certainly an early vintage case. A few years later, Hillhouse not only launched Hillhouse Venture Capital but went on to establish a dedicated "Hillhouse Seed" unit, with Liang as its head.

5Y Capital: Another "Lei Jun Moment"

After deciding to invest, Zhang proactively suggested to Yu that since Hillhouse wasn't primarily focused on early-stage investing at the time, he could introduce a friend who was especially skilled at guiding angel rounds.

Thus, Zhang brought in Qin Liu from 5Y Capital (then still called Morningside Venture Capital).

Yu once shared this experience: when Zhang proposed introducing Liu, he secretly rejoiced: "This is a buy-one-get-one deal." Liu and Yu have both recalled their first meeting on many occasions: the Four Seasons Hotel in Beijing, talking from 9 p.m. to 3 a.m. The hotel restaurants closed one after another, and they were "shooed around" by different waitstaff.

But when Yu laid out his preliminary idea of "building a computing platform for robots," Liu's first reaction was "this vision is too grand."

Yu's entrepreneurial direction lay outside Liu's 16 years of investment experience. Liu had entered investing in 1999. That January, Lei Jun's Joyo.com went live; in February, Pony Ma launched OICQ; in April, Jack Ma founded Alibaba; in September, Wang Zhidong became CEO of Sina. Over the years, "Chinese people excel at business model innovation" had seemingly become an article of faith in primary market investing. Yet Yu was saying he wanted to "build a brain for robots." Liu thought this was too niche, and too difficult — something Chinese people had never accomplished.

But 5Y's characteristic is its sustained attention to and support for cross-industry entrepreneurs with grand visions. A parallel case: before investing in Xiaomi, Liu had also spent 12 hours on a late-night phone call with Lei Jun.

At that moment, the person on the other end of the line was an "outsider" who had never made phones; at this moment, an "outsider" who had never touched hardware. "True innovation often comes from outsiders," Liu told Dark Waves in an interview at the end of 2020.

Ultimately, on the premise of shared belief in AI's future, one sentence from Yu moved Liu: people who don't understand algorithms can't do computing power well.

Liu later broke down the deeper logic behind this "intuition" for Dark Waves: in the computer era, the key to industry-wide transformation lay with Intel and Microsoft — one providing the computing platform, the other the operating system. By comparison, Yu positioned himself at a higher-dimensional starting point, identifying two crucial roles for himself. "If you understand the computer industry, you know that software must depend on hardware computing platforms, and computing architecture must be defined first. He was going straight for the most valuable and hardest thing in the industry."

Then came 5Y's classic "non-consensus and concentrated bets" investment strategy. In July 2015, Horizon Robotics completed its first funding round, with 5Y as the lead investor.

Based on multiple accounts Dark Waves gathered from interviews, Liu was among the financial investors most deeply involved in Horizon Robotics' strategic formulation and adjustment. According to the prospectus, 5Y was Horizon Robotics' largest financial shareholder before listing, with 6.3% ownership.

In October 2020, at 5Y's renaming CEO summit, Yu said with a touch of humor: good investors find young people without experience but with original aspirations and dreams. And one of Liu's strengths is that he also finds "older people with original aspirations but no experience." After Horizon Robotics' listing, Yu stated: 5Y is the true "technology believer" among VC institutions.

After 5Y confirmed its lead investment, GSR Ventures, Sinovation Ventures, and several other institutions joined at the wire. When final terms closed, Horizon Robotics' first-round valuation had risen over 60% from its initial price.

Hongshan: From Betting on the Person to Betting on the Mission

Hongshan's connection with Horizon Robotics dates back to 2014: Yu, still at Baidu, had met with Neil Shen and Kui Zhou.

Zhou recalled for Dark Waves: at the time, Yu was still a "scientist" with dreams and foresight. "Subsequently, in AI, e-commerce, chips, and other major directions, we discussed entrepreneurial opportunities together and hit it off immediately, actively investing in Horizon Robotics' seed round."

Over the decade, Hongshan participated in Horizon Robotics' seed round and Series C. If "investing in people" was its core early logic, the company's increasingly pragmatic development trajectory after converging its business on intelligent driving hardware-software and winning multiple automaker customers strengthened Hongshan's resolve to double down in the Series C.

After Horizon Robotics' successful HKEX listing, Zhou sent out a rare, emotionally charged congratulatory message: Congratulations to Horizon Robotics! Congratulations to Kai Yu! Today Horizon Robotics has reached a new milestone!

ZhenFund: A Curious Fate

ZhenFund's investment story is rather curious.

Xiaoping Xu was one of the donors to the Future Science Prize. In 2015, the organizing committee invited Xu to visit their office, and Anna Fang accompanied him. Unexpectedly, Yu happened to be there that day. They simply met.

At the time, Yu already had entrepreneurial intentions. Thus, ZhenFund invested in Horizon Robotics in two consecutive rounds, September 2015 and July 2016.

Fang later said that investing in Horizon Robotics was ZhenFund's "most curious project sourcing story ever": not from mutual searching, but a chance encounter.

But history's greater curiosity lies in threads of fate that even the participants themselves didn't notice.

At that TechCrunch summit where Wang and Yu met, Xu was actually also present. Less than ten days after the Third Plenum of the 18th CPC Central Committee concluded, the emotionally exuberant Xu played a famous Sally Yeh song, "Walk Gracefully for Once," for the entrepreneurs present. In a booming voice, he told those gathered: "Time doesn't know how much sorrow the world holds, so why not start a company gracefully? The golden decade of entrepreneurship has arrived!"

Qiming Venture Partners, ZWC Partners, and Capital Today: Investments from Nanjing University Alumni

Among Yu's many investors, two were his schoolmates: both graduated from Nanjing University — Kathy Xu and Xiaolu Yu. "Sister Xu" needs little introduction; Capital Today was a Horizon Robotics Series C1 investor. Xiaolu Yu worked at Qiming Venture Partners and later ZWC Partners, investing in Horizon Robotics' Series A and Series C respectively.

At the end of 2015, Yu was still an investment director at Qiming Venture Partners. Qiming had mainly focused on clean technology but was also seeking new opportunities beyond that.

Yu looked at every AI project available on the market. After talking with her senior schoolmate Yu, she pushed Horizon Robotics to the investment committee. Two factors drove the decision: first, Yu's personal appeal, not only his educational and professional background but also Horizon Robotics' hardware-software integration approach, which differed from all other autonomous driving startups at the time; second, Qiming's fund had a longer cycle, which objectively enabled patience in investing in Horizon Robotics.

"Two judgments: first, the direction Horizon Robotics chose was definitely not an easy path; second, Kai Yu was probably the most suitable person to do this," Yu told Dark Waves — a sentiment representative of most early Horizon Robotics investors. Precisely because what Yu wanted to accomplish was so difficult, institutions entering at the Series A all held "long money."

Co-investors in Qiming's round were Wu Capital and Vertex Ventures. The former is the family office of Longfor Properties; the latter is backed by Temasek. All three are relatively evergreen funds.

In 2016, Qiming Venture Partners participated in Horizon Robotics' Series A investment. After Yu later joined ZWC Partners, still optimistic about Horizon Robotics' prospects, she led one tranche of the company's Series C.

By the time Kathy Xu invested in Horizon Robotics, it was already late 2020. After Sister Xu led the round, it officially kicked off what became known in Horizon Robotics history as the "Great Series C."

From late 2020 to June 2021, Horizon Robotics' Series C was divided into numerous tranches over half a year, with Yunfeng Capital, CPE, CICC Capital, IDG Capital, Legend Capital, Huangpu River Capital, and a host of other institutions pouring in — a move that was pioneering in Chinese corporate fundraising history.

As for exactly how many tranches the Series C comprised, there's no unified market figure. Investors' answers vary — some say seven, others say twelve.

DST, Baillie Gifford: The Most Extreme Money Among Dollar Funds

Shortly after launching its Series C, Horizon Robotics announced in early 2021 that it had raised $400 million led by Baillie Gifford and other institutions. Its initial Series C target of $700 million was nearly 80% complete. And five years earlier, Horizon Robotics had also received investment from DST.

Thus, Horizon Robotics had already secured the top-tier global dollar fund money across both VC and asset management dimensions.

These two investments each had their own context. Baillie Gifford is a century-old British asset management firm, a globally renowned long-term fund, and Tesla's largest institutional shareholder. Known for the long-termism in its investments, it is often mentioned alongside Berkshire Hathaway as one of the two peaks of the investment world.

Baillie Gifford has long studied the China market. It launched its first China fund in 2008, established a Shanghai office in 2019, and has invested in over 100 Chinese companies across primary and secondary markets, including NetEase, Tencent, Alibaba, JD.com, Meituan, and Pinduoduo.

DST's investment reflected more of Yuri Milner's personal preference. DST has an unwritten rule: deals under $500 million, Milner invests personally; projects over $500 million, the DST fund handles.

Before Milner met Yu, he had already heard of him. In January 2016, when the Horizon Robotics team dined at his home, Milner told Yu that he knew Horizon Robotics was the world's top deep learning team. The investment also stemmed from Milner's strong interest in artificial intelligence — he holds a degree in physics. Before meeting Yu, Milner had gone with Google CEO Larry Page to watch the AlphaGo match in Korea.

After investing in Horizon Robotics, Milner once asked Yu: "In ten years, how will our lives change because Horizon Robotics exists?"

Yu replied: "By then, you'll be surrounded by all kinds of smart devices: autonomous cars that come to your doorstep to pick you up, air conditioners that know your most comfortable sleeping temperature, refrigerators that know your favorite food is running out and automatically order more for you... The devices around you will have senses like facial features to perceive the environment; feedback for human-machine interaction; and a brain for decision-making and judgment."

The CVCs: Not One Can Be Missing

Horizon Robotics' funding story is of course not limited to the above.

What makes this company special is that it's a technology company founded by a scientist. This meant Horizon Robotics needed not just "indistinguishable money" but also "money that comes with resources."

Cooperation before investment was virtually the entry mode for all of Horizon Robotics' industrial shareholders. Among them, Intel and SAIC deserve special mention.

Intel was the earliest strategic investor to connect with Horizon Robotics. It started with a collaboration where something that normally took two years, the Horizon Robotics team completed in a month and a half — astonishing Intel. It then became the lead investor in the A+ round with "decision speed exceeding many financial investors," securing the largest allocation in that round. Public filings show that in September 2017, Intel invested $20 million in Horizon Robotics, holding 2.1% pre-IPO.

Yu explained his reasons for accepting Intel's investment as follows: first, Intel's years of leadership in the chip industry, with integrated design and manufacturing; second, Intel's powerful CPU resources, which provided excellent support for the extremely complex computing in autonomous driving. At the same time, Horizon Robotics also agreed with Intel on "not taking sides" — processors could be Intel or NVIDIA.

After receiving Intel's investment, Yu confidently told media: "I might also use my own processors, right?"

Beyond Intel, Horizon Robotics' semiconductor strategic investors also included SK and Wehao Chuangxin.

SAIC played a key role in establishing Horizon Robotics in the automotive sector.

Horizon Robotics' prospectus shows SAIC holds 8.78%, the highest proportion among all institutions. According to Dark Waves, SAIC's strategic investment in Horizon Robotics was a "natural result of circumstances."

As early as 2014, SAIC proposed its "New Four Modernizations" strategy of electrification, connectivity, intelligence, and sharing. At that time, Horizon Robotics was also among the first domestic suppliers to propose integrated hardware-software intelligent driving solutions. The two companies in the automotive industry chain thus intersected, and they began preliminary research and cooperation around 2017.

In 2018, SAIC became the first automaker to invest in Horizon Robotics, and their cooperation grew closer.

Multiple financial investors told Dark Waves that in Horizon Robotics' early exploration of China's first automotive-grade AI chip "Journey 2," SAIC devoted "considerable" resources, giving Horizon Robotics many opportunities to try, adjust, and overcome difficulties. For example, providing multiple application scenarios for combining Horizon Robotics' chip-side and vehicle-side solutions, thereby accelerating its pace to achieve the first mass production of automotive-grade chips domestically.

It could almost be said that behind the successful tape-out of "Journey 2" in 2019, SAIC played the role of Horizon Robotics' "guide in the automotive industry" — a role that became even more important after Horizon Robotics fully focused its business on automotive at the end of 2019.

By 2021, Horizon Robotics had completed projects with Changan and Li Auto, and its ability to mass-produce intelligent driving chips was validated by the market. Subsequently, different automakers began actively coming to them. Multiple automakers including GAC, BYD, Great Wall Motor, Changjiang EV, Dongfeng Motor, FAW, Chery, and Volkswagen successively entered Horizon Robotics' shareholder roster.

From the automakers' perspective, investing in Horizon Robotics — the domestic leader in "algorithms + computing power" — made sense for stabilizing suppliers and expanding intelligent driving territory. For Horizon Robotics, an increasingly long list of customers-turned-shareholders was also a critical arrangement for product sales and further R&D iteration.

In recent years, Volkswagen has been another key player among Horizon Robotics' strategic investors.

In October 2022, Horizon Robotics and CARIAD, Volkswagen's intelligent software subsidiary, established a joint venture called CARIZON. Starting in 2023, Horizon Robotics licensed algorithms and software related to advanced driver assistance and autonomous driving solutions to CARIZON. In the first half of this year, Horizon Robotics' licensing revenue from CARIZON reached 351 million yuan, accounting for 37.6% of total first-half revenue of 935 million yuan.

After receiving Volkswagen's investment, Yu also went to Europe with Hillhouse's Liang Li, visiting all major European automakers. This laid groundwork for further industry chain integration and extensive upstream-downstream cooperation.

The Volkswagen cooperation is also seen as a signal of Horizon Robotics' next step in expanding internationally.

Behind the Spectacle of the Great Series C

At this point, it's time to look back at the true protagonist, Kai Yu.

After graduating with a master's from Nanjing University in 2000, Yu earned his Ph.D. in computer science from Ludwig Maximilian University of Munich, then worked on deep learning at Siemens and NEC Research Institute in the U.S. He joined Baidu in 2012 and the following year led the establishment of Baidu's Institute of Deep Learning.

Would a scientist with solid academic credentials make a good entrepreneur?

Early investors were apprehensive about this question. After all, for most of them, investing in hard tech and scientist-entrepreneurs around 2015 was probably a first. Yet almost every investor who became a Horizon Robotics shareholder because of Yu's technical capabilities and vision would later be impressed by his CEO-level execution and sales ability.

Wang evaluated Yu as having both leadership and salesmanship. Liu said: "Among to-B CEOs in sales today, Yu is remarkably outstanding." Legend Capital, meanwhile, believed that under Yu's leadership, the Horizon Robotics team possessed "grand vision and foresight, strong commercial landing capabilities, and rich enterprise management experience."

Yu offered this assessment: "Kai Yu is an entrepreneur with both emotional intelligence and格局. He's tactful yet principled, with bottom lines, able to solve thorny problems in the most acceptable way."

Zhang Yan, founding partner of Wishland Capital, invested in Horizon Robotics when she was at Wu Capital. In her impression, Yu was not a scientist lost in research. Though his chosen algorithms-plus-computing-power path was cutting-edge, the management team always valued application and customer feedback. "Kai Yu is someone who goes with the flow."

Yu's own understanding was clearer. He believed a good to-B company CEO must be extremely tough while also being "flexible in posture." Hence, Horizon Robotics has a reputation in the industry for "nanny-style service" to clients.

The story of Horizon Robotics' Great Series C illustrates from another angle that good tech entrepreneurs need, beyond leadership and salesmanship, acute awareness of the macro environment, confidence in decision-making, and a bit of good luck.

At the end of 2019, Horizon Robotics strategically converged its consumer, security, and automotive businesses to focus on automotive, and laid off 500 employees before the pandemic hit. By 2020, Tesla's rise had galvanized the entire automotive industry. As global monetary easing followed, capital markets became extremely hot.

In late 2020, with "plenty of cash still on the books," Yu launched the Series C. The original plan was a pre-money valuation of $3.5 billion, raising $700 million. After several small tranches raised $800 million, Yu's team realized the capital market was showing "abnormally" high enthusiasm. So while many companies were pushing valuations higher, Horizon Robotics did the opposite — maintaining its original valuation while continuing to raise more tranches, collecting $1.6 billion in one go.

Horizon Robotics' Great Series C included multiple small tranches. Beyond the aforementioned big-name PE firms, semiconductor and automaker strategic capital, numerous existing shareholders, it also attracted Guotai Junan International, Korea's KTB, Hong Kong-based Aspex, hedge fund CloudAlpha Tech Fund, Neumann Advisors, ORIX (Japan's largest non-bank financial institution and largest comprehensive financial services group), Shandong Hi-Speed Capital, Yingcai Yuan Capital, Yuantai Changqing Fund, and CSC Financial, among others.

According to Dark Waves, many of these entrants were betting on Horizon Robotics' dream of a U.S. listing. During that period, Horizon Robotics and ByteDance were also the two names most frequently seen in secondary share purchase demand.

Horizon Robotics announced the completion of its entire Great Series C in June 2021. One month later, Chinese companies' U.S. listings took a sharp turn for the worse.

Yu withstood pressure from shareholders to dilute their stakes, insisting on expanding the Series C financing — a decision that deeply impressed Xiaozhi Xia, partner at Vertex Ventures. Subsequent events proved the correctness of that decision. Horizon Robotics thus gained a better competitive position. Having more ample capital also made Horizon Robotics appear more open, flexible, and calm in subsequent negotiations with Volkswagen, helping it stand out from other companies negotiating simultaneously.

"Don't dance on the edge of a cliff." This is a saying Yu often repeats.

For people in today's primary market, this saying is no less timely.

Image source | Still from Not One Less