The Last "FreeS Fund Family Update" of 2017 | FreeS Fund Bulletin · December
After a year of trudging forward, may you find more fellow travelers here.
Building a company is like stepping into the ring. No matter how well you fought the last round, you have to come out swinging again. Take a hit, and you only get a moment to feel the pain before the next round begins.
The entrepreneurial journey demands courage, wisdom, and perseverance in equal measure. Investing is no different. Fortunately, we're each other's most steadfast companions.
2017 marked our second year together at FreeS Fund. Over the course of the year, we remained unwavering in our conviction around technology innovation, placing our bets across four major directions: artificial intelligence, chips and smart sensors, novel composite materials applied to environmental protection and energy, and the domestic production of global new drug R&D and medical consumables technology. We believe technology can transform the business world from the ground up in profoundly deeper ways.
We also focused on shifts in the consumer sector, seeking opportunities in brand, category, and channel upgrades, as well as in logistics, supply chain, and industrial chain improvements. We believe China will produce many world-class brands over the next two decades.
This is the final "FreeS Fund Blackboard" post of 2017. Here's the latest on our fund in December:
- FreeS Fund was named to Zero2IPO's "2017 China Venture Capital Firms Ranking," recognized by 36Kr as the "Most LP-Friendly VC Firm," by China Renaissance as "Angel Investment Firm of the Year," and by Beijing News's China Maker search as "2017 Emerging Investment Firm of the Year," among other honors.
We also have good news from the FreeS family:
- Consumer: Office unmanned retail shelf startup Guoxiaomei closed its Series C1 round; same-city express delivery platform Kuaifuwu doubled down on "internet + logistics."
- Awards: Guoxiaomei, Xinliangji, Club Factory, Shima Finance, Baichanghui, VPhoto, PingCAP, and others were selected for "2017 iHeima TOP100 — China's Most Promising Startups" and "2017 China Top 100 Innovative Growth Enterprises"; Moka founder and CEO Oulun Zhao was named to the "Under-30 New Entrepreneurs" list; Yifei Automation CEO Sai Zhang was recognized as a "2017 CCTV China Entrepreneur Role Model."
It's been a pleasure walking this path with you this year. Happy New Year!
FreeS Fund Awards
▍FreeS Fund named "Angel Investment Firm of the Year TOP10"; FreeS Fund founding partner Feng Li named "2017 Angel Investor of the Year"; FreeS Fund executive director Li Tian named "Elite VC Investor of the Year"
On December 20, China Renaissance unveiled its "VC/PE Impact Investment Rankings" in Beijing. The shortlist drew on three years of comparative data across fundraising, investment, portfolio management, and exits. FreeS Fund was selected as one of the "TOP10 Angel Investment Firms of the Year," Feng Li as "2017 Angel Investor of the Year," and Li Tian as "Elite VC Investor of the Year." At the event, China Renaissance Alpha and Zhulu X jointly launched "Xingqi," a new data-driven investment and financing product. (Full coverage: China Renaissance 2017 "VC/PE Impact Investment Rankings" Unveiled)
▍FreeS Fund named "Most LP-Friendly VC Firm"; FreeS Fund founding partner Feng Li named "Most Entrepreneur-Friendly VC Investor"
On December 13, 36Kr released its "Remarkable Investors" series at the WISE Investor Summit, honoring investment firms and individuals with outstanding track records, strong growth momentum, deep industry influence, and — above all — positive impact on entrepreneurs. FreeS Fund was recognized as the "Most LP-Friendly VC Firm," and Feng Li was named "Most Entrepreneur-Friendly VC Investor." (Full coverage: 2017 "Remarkable Investors" Rankings Unveiled)
▍FreeS Fund named "2017 Emerging Investment Firm of the Year"
On December 14, the third season of Beijing News's "China Maker" search concluded in Wuzhen. FreeS Fund was named "2017 Emerging Investment Firm of the Year." The organizers' citation read: "An open mindset, an innovative structure. They focus on deep tech and consumer upgrades. In just two years, they've invested in nearly 100 companies, close to half of which have already raised follow-on rounds. Veteran investors at the helm, with unlimited potential ahead." This marked FreeS Fund's third consecutive year receiving this award. (Full coverage: Beijing News China Maker Awards Ceremony Held in Wuzhen)
▍FreeS Fund named to "2017 China Venture Capital Firms Ranking"
On December 8, the 17th China Equity Investment Forum, hosted by Zero2IPO and PEDaily, opened in Beijing, with the "2017 China Equity Investment Annual Rankings" announced simultaneously. FreeS Fund was named to the "2017 China Venture Capital Firms Ranking," its second consecutive year on the list. (Full coverage: Zero2IPO 2017 China Equity Investment Annual Rankings Announced)
FreeS Perspectives
▍Chinese VCs at the vertex of a V-shaped curve
On December 13, at 36Kr's "WISE 2017 Investor Summit," Feng Li joined a roundtable on "The Rational Era of VC: Shakeout and Upgrade." He argued that with fewer business model innovation opportunities and technology innovation requiring long-term accumulation, Chinese VCs found themselves at the vertex of a V-shaped curve during 2016–2017, with attention fragmented across disparate sectors. VCs cannot simply chase short-lived trends; they must create lasting value. Going forward, FreeS Fund will continue building positions in technology innovation and consumer sectors.
▍Opportunities in core technology domesticization
On December 8, at the "17th China Equity Investment Annual Forum" hosted by Zero2IPO and PEDaily, Feng Li spoke on a panel titled "2018: Where Is the Wind Blowing?" He noted that equity investment must ultimately serve economic structure. Over the next 5–10 years, China must solve core technology domesticization and the accompanying issue of pricing power across industrial chains. Accordingly, FreeS Fund will continue focusing on chip and sensor modules, biomedicine, energy and environmental protection, decision intelligence in AI, and vertical applications of AI.
▍Companies with deep industrial chain experience grow faster
On December 16, at the "10th Annual Entrepreneur Conference" hosted by iHeima, Feng Li delivered a keynote on "The Investment Logic of Industrial Upgrading." He observed that the fastest-growing companies in recent years share common traits: rich industrial chain experience, and the ability to digitize both supply and demand in previously under-digitized industries — improving efficiency, meeting user needs, and cultivating user habits in the process.
▍Consumer finance firms cannot do risk control without scene
On December 12, at the "2017 China Venture Capital Winter Summit" hosted by the Guangzhou SASAC and others, Feng Li gave a keynote on "The Future Development and Trends of Fintech." He explained that financial innovation begins with asset accumulation, then moves to asset securitization and big data-driven risk assessment for systemic stability and security. Practices that violate risk pricing principles or seek arbitrage far above average returns do not constitute genuine financial innovation. The current round of regulatory and policy guidance will push licensed financial institutions to further digitize and internet-ify their operations. Consumer finance companies must control the scene — they absolutely cannot do risk control or credit extension divorced from real scenarios.
▍Automotive innovation demands deep technical accumulation
On December 15, at the final round of the "2017 Audi Innovation Lab" competition, Feng Li noted that the automotive industry has high barriers and requires long-term technical buildup. Over the past two years, FreeS Fund has built positions across core components for intelligent vehicles, including visual processing chips, LiDAR chips, millimeter-wave radar, GPS, and all-solid-state lithium batteries.
▍Digitization of supply and demand creates platform opportunities
On December 22, at the "2017 Yibang Future Retail Conference" hosted by Yibang Power, Feng Li delivered a keynote on "Technological Revolution, Industrial Upgrading: Where Is the Path Forward for Brands?" He argued that over the past decade, the digitization of supply and demand has created opportunities for intermediary platforms that improve efficiency — giving rise to DiDi in mobility and explosive growth in logistics services. Now, office unmanned retail shelves like Guoxiaomei are continuously closing the distance between people and products, improving efficiency in retail.
FreeS Family Updates
1
Consumer | Guoxiaomei closes Series C1 round
On December 13, Guoxiaomei founder and CEO Limin Yan announced at 36Kr's "WISE 2017 New Business Conference" that the company had completed its Series C1 round, raising over $50 million. This marked the company's first new financing following its merger with Fanqie Bianli. The round was led by Vertex Ventures China, with continued pro-rata participation from existing shareholders IDG Capital and BlueRun Ventures, and follow-on investment from Hongdao, Yijing, Deshang, and others. Since its founding in June 2017, Guoxiaomei has completed four financing rounds and one strategic merger, with total funds raised exceeding RMB 500 million.
Yan stated: "Going forward, Guoxiaomei's terminals will encompass shelves, smart vending machines, and mini-stores in multiple formats, meeting user demand for fresh products, fruit, bento boxes, and three daily meals — comprehensively covering white-collar life and work scenarios, becoming a low-cost, high-quality customer acquisition traffic entry point, and building an innovative hybrid e-commerce model." (Full coverage: Guoxiaomei Closes $50 Million Financing Round)
2
Consumer | Kuaifuwu doubles down on "internet + logistics" as two former Quanfeng Group executives join
Recently, former Quanfeng Group VP Yulong Zhao and former Quanfeng Express Beijing regional general manager Maohong Xu joined same-city express delivery platform Kuaifuwu as VP and Beijing branch general manager, respectively. Kuaifuwu recently launched a same-city four-hour delivery service. With the addition of the Quanfeng executives, Kuaifuwu will gain access to more express network resources, outlet resources, and station resources, accelerating its "internet + logistics" expansion. (Full coverage: Two Quanfeng Executives Join Kuaifuwu)
3
FreeS Family Awards
▍Guoxiaomei, Xinliangji, Club Factory, Shima Finance, Baichanghui, and VPhoto selected for "2017 iHeima TOP100 — China's Most Promising Startups"
On December 16, the "2017 iHeima TOP100 — China's Most Promising Startups" list, jointly initiated by iHeima and Analysys and co-published by NetEase Technology, was officially released. Guoxiaomei, Xinliangji, Club Factory, Shima Finance, Baichanghui, and VPhoto stood out from 485 projects across new consumption, e-commerce, finance and insurance, enterprise services, and other sectors to make the list. (Full coverage: 2017 iHeima TOP100 Rankings Released)
▍Baichanghui, Shima Finance, PingCAP, and Xinliangji selected for "2017 China Top 100 Innovative Growth Enterprises"
On December 1, the "Cyzone 100 Future Leaders Summit & 2017 Cyzone Annual Conference" was held in Beijing, with the "Cyzone 100 — 2017 China Top 100 Innovative Growth Enterprises" list announced concurrently. The selection spanned more than four months and received over a thousand company submissions and survey responses. Baichanghui, Shima Finance, PingCAP, and Xinliangji made the list on the strength of their strong business growth and positive user reputation over the past year.
▍Moka founder and CEO Oulun Zhao named to "Under-30 New Entrepreneurs"
On December 7, Cyzone released its "Under-30 New Entrepreneurs" list, with Oulun Zhao, founder and CEO of intelligent recruitment management system Moka, selected. Zhao graduated from UC Berkeley with a degree in computer science, then worked at Citibank in Hong Kong and at a Silicon Valley startup, winning the Facebook Hackathon championship among other honors. In 2015, Zhao returned to China to found Moka, aiming to help companies dramatically improve their recruiting capabilities. Moka currently serves over a hundred paying clients including Xiaomi, Momo, and ZhongAn Insurance. (Full coverage: Under-30 New Entrepreneurs List Unveiled)
▍Yifei Automation CEO Sai Zhang named "2017 CCTV China Entrepreneur Role Model"
On December 22, CCTV announced the winners of its "2017 CCTV China Entrepreneur Role Model" awards. Sai Zhang, CEO of Yifei Automation, was selected. Yifei Automation completed its Series B round in October 2017 and released its new "Cheetah" parallel robot product, continuing to pursue its vision of building a world-class Chinese robotics company. The judges' citation for Zhang read: "He thrives against the headwinds, turning hardship into brilliance. He built from nothing, through three generations of iteration, to create an indigenous industrial robot brand. On the production line, he wins with speed — competing against himself." (Full coverage: 2017 CCTV China Entrepreneur Role Model Winners Announced)
