Helping Fight the Pandemic (Updated), Launching Smart Warehouse Robots… Navigating Through Challenges in 2020 | FreeS Chalkboard · January
Do what's right, not what's easy.
FreeS Fund Newsletter — January Issue
In this edition, we share the latest updates from FreeS Fund with our long-standing friends and partners:
- FreeS Fund and its portfolio companies join the fight against the COVID-19 outbreak.
- FreeS Fund hosts two offline events for portfolio CEOs in Shanghai: "FreeS Open Talk" and "FreeS Bistro."
- FreeS Fund ranks 15th on the "TOP 100 Most Promising Funds in the World" list at the Davos Global Fund of Funds Summit, and wins "China's Most Active Industrial Investment Fund TOP 15" at the 4th Golden Bridge Awards. FoodPlus names FreeS Fund a "Chinese Food & Consumer Investment Firm to Watch in 2019."
We also have good news from the FreeS family:
Consumer: Three Squirrels plans to invest 2.06 billion yuan to build 36 alliance factories.
Tech: Covariant.AI launches intelligent warehouse robots, featured in The New York Times, The Wall Street Journal, and Wired; SoundAI releases AI voice textbooks, advancing the industry ecosystem; Unity partners with LekeLi Education on programming courses; JiuZhou Cloud Arrow passes military quality management system certification; Muxing Technology and Nanjing CoreXVision showcase products at CES 2020; modules developed by Nanjing Ruilan and Zhongke Xin based on Xinyi Information Technology chips pass China Telecom's NB-IoT module certification.
Education: Changingedu upgrades from "Changing Tutors" to "Changing Education."
Awards: In January, 10+ portfolio companies received 20+ awards from third-party institutions including ArteryNet, Pharmablock, IT168, DataYuan, B2B Neican, and FoodPlus.
In the year ahead, FreeS Fund will continue to stay grounded and push forward, while staying curious about the unknown — always looking to encounter innovation and the extraordinary.
FreeS Fund News
1
FreeS Fund and Portfolio Companies Join the Fight Against COVID-19
With the COVID-19 outbreak still urgent, FreeS Fund has turned its attention to small and mid-sized hospitals in Hubei — the hardest-hit province with the most complex and severe conditions — providing them with free medical supplies to combat the epidemic.
FreeS Fund contacted 19 local medical and related service organizations in Hubei (16 municipal and county-level designated treatment hospitals, 2 district/county Red Cross societies, and 1 town government), covering Wuhan, Xiaogan, Huanggang, Xianning, Ezhou, Jingzhou, and Enshi. As of 6 PM on January 29, FreeS Fund had procured 100,000 surgical masks, 70,000 medical latex gloves, and 6,500 bottles of disinfectant.
As of January 29, 15+ FreeS portfolio companies had contributed their resources and energy to epidemic areas from multiple angles: medical diagnosis, medical supplies, health insurance services, and online education. (Read more: FreeS Fund's WeChat article)
From January 30 to February 5, we saw even more portfolio companies step up:
- Guancha donates its matcha meal-replacement bottles — convenient, filling, and nutrient-rich — plus matcha snacks to epidemic areas.
- GuoXiaomei offers schools free WeChat-based livestreaming teaching tools, enabling teachers to start broadcasting within 3 minutes to address delayed school openings.
- Haalthy partners with medical staff at Beijing Chest Hospital, Chongqing Daping Hospital, and Peking Union Medical College Hospital to provide free online consultations for people with fever-like symptoms who cannot easily visit hospitals.
- Haifeng Technology donates 60,000 RMB to Wuhan Union Hospital through the Hubei Provincial Charity Federation.
- XtalPi mobilizes massive cloud computing power to conduct molecular-level research on how the virus infects host cells, providing foundational research and open data for virus early warning, prevention, and drug development.
- Bluepha releases a free online science course: The Story of Germs and Viruses. It guides viewers to understand plagues from multiple perspectives — the history of humanity's battle against them, the mechanisms of pathogenic microorganisms, and the latest life science technologies deployed on the front lines.
- As of February 4, LEAP has raised and procured $99,280.79 worth of medical protective supplies for epidemic areas, including 10,556 protective suits and 10,778 other items.
- Momself and YiXinLi launch a public welfare psychological hotline, offering free mental health support to users affected by the pneumonia outbreak.
- Saturnbird donates 1.1 million RMB worth of coffee and thermoses to medical institutions in epidemic areas.
- Shaonian Dedao opens its reading camp free to all children nationwide, and gives Wuhan children free access to 5 selected courses.
- SoundAI urgently allocates and produces 2,000 AI devices worth 1 million+ RMB, donating them directly to frontline medical workers in Hubei.
- Shiyue Hehu organizes its medical staff with nearly 20 community health service centers in Xi'an to provide free online fever consultation services nationwide.
- Unity offers Greater China users an additional 4 months of free Unity Learn Premium access.
- Singleron's single-cell technology helps Fudan University and other institutions discover the mechanism of liver damage caused by the novel coronavirus.
- Yifei Automation makes its automatic mask packaging equipment available free to mask manufacturers during the epidemic.
2
FreeS Fund Hosts Two Offline Events for Portfolio CEOs in Shanghai: "FreeS Open Talk" and "FreeS Bistro"
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"FreeS Open Talk" is an intimate offline gathering for FreeS family CEOs. We invite knowledgeable experts and battle-tested FreeS family CEOs to share insights and practical experience on topics and directions our CEOs care about.
On January 10, "FreeS Open Talk" was held in Shanghai, with 19 founders taking center stage. At the starting point of 2020, the founders spoke candidly about the growth and confusion they experienced in 2019, as well as their reflections on their companies' futures. A group of relentless, determined fellow travelers sparked brilliant ideas through repeated collisions.
After the closed-door session, the FreeS family founders moved to the "FreeS Tavern." "FreeS Tavern" isn't a specific venue — it's a mobile waystation built for FreeS family CEOs, with drinks and stories. The founders gathered around the fire with Feng Shu and other FreeS teammates for late-night drinks and conversation.
3
FreeS Fund ranked 15th on the "TOP 100 Most Promising Funds in the world" list at the Davos Global FOF Summit
On January 21 local time in Switzerland, the "Davos Global FOF Summit" co-hosted by the Global FOF Association and China FOF Alliance, with China FOF Research Center and ChinaVenture as co-organizers, concluded in Davos, Switzerland. The summit released the 2019 Global Best Investment Institutions list, selected by the Global FOF Association through approximately one month of recommendations and scoring. FreeS Fund was named to the "TOP 100 Most Promising Funds in the world" list, ranking 15th. (See coverage from [China FOF Research Center] Major announcement!2019 Global Best Investment Institutions List Released!)
4
FreeS Fund recognized at the 4th Golden Bridge Awards Annual Ceremony
"2019 China's Most Active Industrial Investment Fund TOP 15"
On January 9, the "4th Golden Bridge Awards Annual Ceremony" kicked off in Beijing. The Golden Bridge Awards invited authoritative industry experts, scholars, and third-party data institutions to participate in the judging process, selecting finalists nationwide based on authority, fairness, and impartiality. At the ceremony, six major lists were released, with FreeS Fund named to the "2019 China's Most Active Industrial Investment Fund (TOP 15)." (See coverage from [36Kr] 4th Golden Bridge Awards Released in Beijing: 2019 China Private Equity Fund Rankings)
5
FreeS Fund named by FoodPlus as
"2019 Notable China Food & Consumer Investment Institution"
FoodPlus, which focuses on China food and consumer entrepreneurship and investment, released its "2019 Notable China Food & Consumer Investment Institutions" annual list on January 16. This was the organization's first annual list focused on investment institutions, with 23 investment institutions selected, including FreeS Fund. (See coverage from [FoodPlusHub] 2019 Notable China Food & Consumer Investment Institutions | FoodPlus Annual List)
FreeS Perspectives
▍FreeS Fund's Feng Li: China's Advantages and Opportunities in 2020
Whether you're pessimistic or optimistic today, however you view China's economic trajectory going forward, it's hard to deny that China currently possesses — unprecedentedly and simultaneously — three elements: "the largest and most complete supply chain, the largest consumer market, and upgrading." We've already witnessed the astonishing effects of these three elements叠加 in areas like smartphones.
So, within the next five years, whatever industry manages to aggregate these three elements will produce world-class companies that are both brands and technology. This massive "China dividend" belongs to all industries — various categories will see more than one opportunity, one in the存量 phase and another after entering增量 markets.
Moreover, user needs aren't static. As user needs upgrade, former存量 categories can become增量 categories. At the very least, in the typical存量 market of apparel, we've all seen the rise of the athleisure subcategory, and we've all seen Li-Ning, after years of silence, stage a beautiful comeback. (See coverage from [FreeS Fund] Feng Li's New Year Outlook | One Chart to See 2020 China Opportunities)
▍FreeS Fund's Hai Huang: How to Choose a Differentiated Niche in a Large Industry?
In a large industry, choosing a differentiated niche. How do we put this principle into practice?
First, there are three dimensions for differentiated entry points: price, consumption scenario, and the product itself. For skincare, it might be efficacy design; for food, it might be texture and flavor design.
Second, products that can be purchased repeatedly and have "addictive" qualities usually present good entrepreneurial opportunities. Coffee and tea contain caffeine — the simplest form of addiction — with high repurchase rates and consumption frequency. At the same time, user loyalty to individual brands is also high. Cosmetics are addictive too, because you have to keep buying after using them. However, user loyalty to individual cosmetic brands may not be as high as for coffee and tea — this varies by industry.
Third, if something is closer to a user's lifestyle, they're more willing to share it with others.
Red Bull and Monster Energy advertisements always show someone doing extreme sports or playing rock music while drinking the product. Aspiration toward this lifestyle makes consumers feel that buying the product brings them closer to that lifestyle. For example, Joyboy sponsored music festivals and hip-hop culture to connect its product with youth culture. (See coverage from [New Business Intelligence NBT] FreeS Fund's Hai Huang: Grasping the "Change and Constancy" in the Consumer Industry)
FreeS Family Updates
1
Consumer | Three Squirrels plans to invest 2.06 billion yuan to build 36 alliance factories
At the end of 2019, Three Squirrels announced a partnership with the Wuwei municipal government and major suppliers to jointly invest 2.06 billion yuan in building 36 alliance factories. The alliance factories will be constructed in two phases: Phase 1 will add 11 food alliance enterprises, and Phase 2 will add 25 food alliance enterprises.
Three Squirrels stated: "The Grand Alliance is an innovation in business model, and there is currently no precedent. At its core, it uses an alliance approach to first address the transactional relationship between traditional甲方 and乙方 parties, and second, to transform the relationship between productive forces and production relations."
The "Grand Alliance" enables a shift from simple connection to deep connection. Three Squirrels and its partners are no longer merely an interest-based coalition, but have truly become an industrial community. Through the establishment of "alliance factories" within the same industrial park, retail and manufacturing are integrated. (See [FBIF Food & Beverage Innovation] for more: Will Three Squirrels' 2 Billion Yuan Alliance Factory Be the Future of Snack Companies?)
2
Tech | Covariant.AI Releases Intelligent Warehouse Robot, Featured in The New York Times, The Wall Street Journal, WIRED, and Others
On January 29, top-tier media outlets including The New York Times, The Wall Street Journal, and WIRED reported on the real-world deployment of Covariant.AI's intelligent warehouse robots at German electronics retailer Obeta and Austrian warehouse automation technology provider Knapp. Covariant.AI developed a platform featuring camera-equipped robotic arms, specialized grippers, and ample computing power, excelling at picking items in warehouse environments.
The New York Times reported: "According to Covariant.AI, the robot can pick and sort more than 10,000 different items in the German warehouse with 99% accuracy. This represents significant progress for the online retail and logistics industries." WIRED noted that "Covariant.AI has not yet developed robots as adaptable and flexible as humans, but it has clearly succeeded in applying reinforcement learning research to industrial environments." (See [The New York Times] A Warehouse Robot Learns to Sort Out the Tricky Stuff, [THE WALL STREET JOURNAL] Smarter Delivery Hinges on Smarter Robots, [WIRED] AI Helps Warehouse Robots Pick Up New Tricks)
3
Tech | SoundAI Releases AI Voice Textbook, Advancing Industry Ecosystem
On January 19, SoundAI released the AI voice textbook Intelligent Voice Development: From Beginner to Practice, now available on JD.com, Dangdang, and Xinhua Bookstore. This book serves as an introductory guide for intelligent voice students, beginners, and development enthusiasts. Based on SoundAI's SoundAI Azero intelligent operating system, it provides a detailed introduction to intelligent voice interaction development, and through the SoundPi intelligent development kit, vividly demonstrates to beginners how to conveniently and efficiently practice intelligent voice interaction. For enterprise developers with different needs, it also offers complete solutions for convenient development, helping traditional industries upgrade to intelligent operations. (See [SoundAI] for more: SoundAI Releases AI Voice Textbook, Advancing Industry Ecosystem)
4
Tech | Unity Partners with LekeLi Education on Programming Courses
On the morning of December 31, 2019, Unity and LekeLi Education formally signed a strategic cooperation agreement at LekeLi's headquarters at Caobao Campus, launching deep collaboration on programming courses.
Unity's K12 education products include programming courses and programming toolkits. The curriculum covers C# programming language fundamentals, algorithms, data structures, and Unity basics. Through specially developed programming toolkits and leveraging Unity's powerful interactive capabilities, this course helps children understand programming concepts faster and more deeply through a "visible" approach, and apply what they've learned to complete their own creative projects.
Through this partnership with Unity, education and training institution LekeLi will develop new, more suitable, and more efficient programming courses for children. Before the official launch of the long-term programming course, LekeLi will first introduce programming demo courses. (See [Unity Official Platform] for more: Unity Partners with LekeLi Education on Programming Courses)
5
Tech | JiuZhou Cloud Arrow Passes National Military Standard Quality Management System Certification
On January 17, JiuZhou Cloud Arrow passed the national military standard quality management system certification and received the National Military Standard Quality Management System Certification Certificate. The national military standard quality management system standard is a People's Republic of China national military standard, approved and issued by the Equipment Development Department of the Central Military Commission.
This year, JiuZhou Cloud Arrow will establish batch production and testing capabilities for engines and begin delivering engine products. To provide customers with low-cost, high-quality propulsion products and secure its position in the military and civilian liquid rocket engine markets, JiuZhou Cloud Arrow began planning and organizing the establishment of a national military standard quality management system in 2019. Obtaining this certificate demonstrates that JiuZhou Cloud Arrow has the capability to deliver stable and reliable products to customers. (See [JiuZhou Cloud Arrow] for more: JiuZhou Cloud Arrow Passes National Military Standard Quality Management System Certification)
6
Tech | Muxing Technology and Nanjing CoreXVision Showcase Products at CES 2020
The International Consumer Electronics Show (CES) is the world's largest and most influential annual consumer electronics technology exhibition, as well as the world's largest consumer technology industry event, having successfully held 52 editions to date.
At CES, Muxing Technology demonstrated ultra-low power, high-precision GPS/GNSS positioning solutions. Nanjing CoreXVision, a global leader in single-photon detection laser ranging ToF chips, showcased its products and comprehensive solutions.
Muxing Technology (Kolmostar) is a high-tech company focused on GNSS satellite positioning solutions. It has developed proprietary GNSS (GPS, BeiDou, etc.) satellite signal processing methods capable of achieving ultra-low power consumption (milliwatt level) and high-precision (centimeter level) outdoor positioning in complex urban environments.
CoreXVision possesses world-leading optoelectronic conversion device design and single-photon detection imaging technology. Its main products include ToF 3D image sensing chips and ultra-high-speed optoelectronic interconnect chip solutions for large data centers. The company's chip products can be widely applied in automotive assisted/autonomous driving, robot positioning and navigation, mobile phone 3D imaging, spatial environment mapping, security and surveillance, and other fields, providing chip-level ranging and 3D imaging solutions for OEM and module manufacturers. (See [Muxing Technology Kolmostar] for more: Countdown 1 Day: Muxing Technology Meets You at CES 2020, [Nanjing CoreXVision Microelectronics Co., Ltd.] Nanjing CoreXVision to Showcase Products at CES)
7
Tech | Nanjing Ruilan and Zhongke Xin Modules Based on Xinyi Information Technology Chips Pass China Telecom Group Co., Ltd. NB-IoT Module Certification Testing
On January 2, after rigorous technical testing and parameter review by the China Telecom Guangzhou Research Institute, the W5110 module developed by Nanjing Ruilan (a subsidiary of Jiangsu Wuyi) based on Xinyi Information Technology's XY1100 chip passed China Telecom's NB-IoT module certification testing. The W5110 module has now entered mass production. (See Xinyi Information Technology's report: XY1100 DESIGN-WIN! Jiangsu Wuyi W5110 Module Passes China Telecom Module Certification Testing!)
On January 9, the CRF1100-N1 module developed by CETC China Electronics Technology Group Corporation's Zhongke Xin Integrated Circuit Co., Ltd. based on Xinyi Information Technology's XY1100 chip passed China Telecom's NB-IoT module certification testing. The CRF1100-N1 module has now entered mass production. (See Xinyi Information Technology's report: XY1100 DESIGN-WIN! CETC's Zhongke Xin CRF1100-N1 Module Passes China Telecom Module Certification Testing!)
8
Education | Changingedu Officially Upgrades from "Changing Tutors"
Changing Tutors officially upgraded to "Changingedu" on January 1, with a sharper focus on the essence of education and a return to the classroom itself, ensuring that every lesson a child takes on the platform receives maximum quality assurance.
Changingedu is an internet education unicorn specializing in online and in-home tutoring for primary and secondary school students nationwide. With a curated pool of over 45,000 professional teachers across all grades and subjects, the company combines online and in-home delivery to break through time and space constraints. It matches students with suitable teachers based on each child's characteristics and customizes curricula, effectively meeting strong demand from students and parents for personalized learning. Changingedu currently has branch offices in nearly 60 cities across China and has provided over ten million hours of teaching services to hundreds of thousands of families nationwide. (See Changing Tutors' announcement: Official Announcement: Changing Has a New Name!)
9
FreeS Fund Portfolio Companies Win Awards
In January, more than ten portfolio companies received over 20 awards from third-party institutions including VCBeat, Pharma DJ, IT168, DataYuan, B2B Neican, and FoodPlus.
Perspectives from the FreeS Fund Community
Shiyong Wang, 2:10 Animation: How Should Animation Companies Manage Internal Organization?
2:10 Animation employs a distinctly market-driven internal management model where departments collaborate through transactional relationships.
Every department head at our company is a seasoned veteran in the industry, and each department has the right to choose which projects to take on. Under a project profit-sharing model, leaders make selections based on their team's strengths. With the company providing a steady stream of projects, the entire team operates efficiently.
For instance, during project execution, some department personnel inevitably end up temporarily idle. At such moments, ensuring a continuous flow of upstream projects so that downstream staff always has work to do becomes critically important.
Suppose a department has 50 people, and 10 are temporarily "idle" while working on a project. The department head can then "loan out" these employees to other departments, with the borrowing department covering their salaries and bonuses during the loan period. Through this kind of internal circulation, departments and the company as a whole eliminate idle capacity costs. (See Sanyu's report: Shiyong Wang, 2:10 Animation: In a Down Market, How Should Animation Companies Commercialize?)
Lin Sheng Gao, Founder of Chicecream: How Can Consumer Companies Survive Until Spring?
As early as New Year's Eve, we held an internal conference call and assessed that the impact on us would likely last a full two to three months.
Our preparations covered several areas:
First, everyone needed to take care of themselves. Every department had to look after its own people, because people come first.
Second, business. We could clearly see that natural traffic to our online sales was growing enormously — without us doing anything at all.
In January, we saw roughly 200% growth, and February's estimate might be 600%. We could also see that many online merchants were growing.
Next, we urgently communicated with our factories about when safe resumption of production would be possible, with one precondition: we required all contract manufacturers not to open without strict prevention and control measures. If you prioritize profit over prevention, or enforce controls loosely, even if you can open, it will only be short-term — the trouble down the line will be substantial.
We also maintained daily communication with our logistics partners to track all developments.
Third, we told everyone that we'd start working from home on the 3rd, salaries would be paid as normal, and those who needed to make up time off should do so — giving all employees peace of mind. As a founder, there's no need to transmit panic and pressure downward. We wanted to give everyone encouragement. (See Langchao New Consumption's report: How Can Consumer Companies Survive Until Spring?)
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