4th Anniversary, Debut at WAIC... 16 Milestones and 6 Reflections | FreeS Fund Chalkboard · August
Do what's right, not what's easy.
FreeS Fund's August newsletter. We want to share our latest updates with friends who have long followed and supported us:
- FreeS Fund continued its follow-on investment in Shangyue's Pre-A round.
- FreeS Fund's fourth-anniversary team retreat in Qinghai — 4ever 4 better.
- FreeS Fund hosted two offline events for portfolio CEOs: "FreeS Open Talk" and "FreeS Bistro."
We also have good news from the FreeS family:
Consumer: Art platform HUI raised 20 million RMB in Series A funding; Three Squirrels released its first post-IPO earnings report with revenue and profit both growing; Jordan&Judy opened its first flagship experience store in Shenzhen; Saturnbird launched its coffee can recycling program.
Deep Tech: Onion Math, IceKredit, Jingtai Technology, and 360 Finance appeared at the 2019 World Artificial Intelligence Conference; CoreXVision debuted its world-leading single-photon detection laser ranging ToF chip; Xinyi Information's XY1100 NB-IoT ultra-high-integration SoC passed China Mobile's chip certification in one round; Jiuzhou Yunjian signed a contract with LinkSpace for the T6 rocket engine; MaiFe established a precision agriculture base in southern Montreal, Quebec, Canada.
Entertainment: Wuhan Mayor Zhou Xianwang and his team visited 2:10 Animation, accelerating the city's push to become an "animation capital."
Awards: NextVPU placed in the top ten of the AI track at the 8th China Innovation and Entrepreneurship Competition (Zhejiang Division); Antiy Mobile Security CEO Pan Xuanchen was elected chairman of the Wuhan Cybersecurity Association, and Antiy Mobile Security was named one of "Wuhan's Top 100 Software Enterprises 2019"; Saturnbird was selected for Changsha's "Innovators 25."
In the context of innovation, the world moves at lightning speed. We remain committed to doing what's right rather than what's easy, and look forward to continually encountering innovation and the extraordinary.
FreeS Fund News
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FreeS Fund Continues Follow-On Investment in Shangyue's Pre-A Round
On August 14, Beijing Sunyur Network Technology Co., Ltd. (www.sunyur.com, hereinafter "Shangyue"), a procurement digitalization SaaS company, announced the completion of a 58 million RMB Pre-A round led by Yuanjing Capital, with Huiyou Capital and Zhiyi Capital participating. Shangyue had previously raised 39 million RMB in angel funding on January 16, 2019, from Yinxingu Capital, SIE Industry Fund, FreeS Fund, and Dingju Venture Capital — all four of which followed on in this round.
Additionally, at the end of August, Shangyue formally signed with Meituan to help the company build a procurement e-commerce platform. Meituan is the second internet industry client for Shangyue after Zhaopin. The internet industry evolves rapidly with high personnel costs. Shangyue's procurement e-commerce platform technology helps enterprises adapt to business changes, making procurement simpler, more efficient, and less costly. (See full coverage: [Shangyue] Meituan Signs with Shangyue to Build a Leading, Efficient Enterprise Procurement E-Commerce Platform)
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FreeS Fund's Fourth-Anniversary Team Retreat in Qinghai: 4ever 4 better
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On August 16, FreeS Fund's fourth anniversary, we took a group trip. By the stunning Qinghai Lake, we shouted "Happy 4th Birthday FreeS Fund, 4ever 4 better!" Before this, we had traveled together to Hokkaido, New Zealand, Dali, Chengdu, Guilin, Wuxi...
Over the past four years, we have steadily strengthened our investment focus on three major directions — consumer, hard tech, and biomedicine — while also witnessing the growth of the FreeS family. What hasn't changed is our commitment to "doing what's right rather than what's easy."
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FreeS Fund Hosts Offline Events for Portfolio CEOs: "FreeS Open Talk" and "FreeS Bistro"
"FreeS Open Talk" is an intimate offline gathering for CEOs in the FreeS family. We invite knowledgeable experts and battle-tested FreeS family CEOs to share insights and experiences on topics and directions that concern our CEOs.
On the afternoon of August 29 in Beijing, we invited two FreeS portfolio CEOs — Qi Juntong, CEO of Yifei Intelligent Control, and Li Zheng, CEO of Qingtao Development — to discuss with FreeS family founders how startups can ride the momentum of policy, resources, and business environment. Their practical experience left every founder in attendance feeling they had gained something valuable.
After the sharing session, the third edition of "FreeS Bistro" opened for business. Everyone moved to a restaurant in a nearby courtyard home to continue drinking and chatting freely. "FreeS Bistro" is a new series launched by FreeS Fund for our portfolio CEOs. Unlike formal sit-down gatherings with brain-taxing presentations, "FreeS Bistro" encourages venting and listening, with our full support. "The addiction of entrepreneurship, the bitterness of entrepreneurship — let's talk over drinks."
FreeS Perspectives
▍FreeS Fund Partner Yongcheng Yang: For AI Projects with High Foam Content, I Hope It's Beer Foam, Not Soap Bubbles
As a new and widely applicable technology, AI is affecting every aspect of our lives. In AI's early development, many innovations and applications emerged based on core AI technologies — computing power, algorithms, and corresponding chips. These represent AI's fundamental applications and market domains. As the industry has further developed, AI has begun to demonstrate its value in vertical domains — such as AI applications in insurance risk control and e-commerce user profiling. The long-tail effects of these applications will continue to expand and deepen across vertical fields.
As for valuing AI projects, or investment valuations, like all new technologies and domains, it's always difficult to have a completely objective, realistic investment valuation in the early stages of industry development. There will always be some projects with inflated valuations, and of course there may also be undervalued teams. This is perhaps part of the charm of entrepreneurship and investment — because there are always things that require careful, prudent evaluation, and there are always people and endeavors where you can't immediately judge how much value they hold in a specific domain, how much value they might generate in the future, or how much impact they might have on people's lives.
For certain individual projects in the market with genuinely inflated valuations, or high foam content, I hope it's beer foam rather than soap bubbles. Because beer foam is still beer — it just has a high air content. When it bursts, some beer remains. Soap bubbles are different: once they pop, there's nothing left. As investors, we should rationally distinguish and judge.
Specifically regarding AI investments: for horizontal AI technology platform projects, we care more about depth — that is, in computing power and algorithms, the technical moat must be deep enough. Only such projects can complete the Long March, withstand the test of time, and ultimately succeed.
For AI applications in vertical markets, we care more about breadth, because if the application surface is too narrow, market returns won't support a large enough business model, and future returns may be too low. (See full coverage: Yongcheng Yang's sharing at the "Smart New Economy, Innovation New Era — Investment and Financing Forum" at the 2019 World Artificial Intelligence Conference (WAIC) hosted by CICC)
FreeS Family Updates
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Consumer | Art Platform "HUI" Raises 20 Million RMB in Series A
"HUI" recently secured 20 million RMB in Series A funding from Siji Xinghe, Yisan Capital, Qixi Capital, Tianqi Ventures, and other investors. In March 2018, the platform had already raised 10 million RMB in Pre-A funding from FreeS Fund, Yanjiyou, and Qingke Venture Capital.
Founded in 2017, "HUI" now positions itself as an ultra-contemporary art label. It is an art platform founded by veteran commercial real estate operator Weiguang Tao that integrates offline art exhibitions with an online retail store. Currently, "HUI" has established connections with over 10,000 artists and is actively discovering emerging Chinese contemporary artists, committed to building direct links between artists and consumers through cultural creative products and enriching commercial spaces.
Beyond this, "HUI" has also collaborated with multiple local governments and commercial complexes on art projects and art conferences. Going forward, it will continue to develop its art and cultural creative consumer business, exploring the integration of different project resources to create more fluid, novel art spaces and experiences. (See full coverage: [New Business Intelligence NBT] Art Platform "HUI" Raises 20 Million RMB in Series A, Exploring the Extensibility of Art Consumption)
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Deep Tech | FreeS Fund Portfolio Shines at 2019 World Artificial Intelligence Conference (WAIC): Sharing Insights, Gaining Recognition
"Intelligent Connectivity, Infinite Possibilities" — from August 29 to 31, the 2019 World Artificial Intelligence Conference, co-hosted by the National Development and Reform Commission, Ministry of Science and Technology, Ministry of Industry and Information Technology, Cyberspace Administration of China, Chinese Academy of Sciences, Chinese Academy of Engineering, and Shanghai Municipal People's Government, was grandly held in Shanghai. This year's conference focused on frontier AI technologies, industry trends, and hot topics, aiming to explore new patterns of AI integration and innovation across industries and identify new opportunities in AI development.
As a prominent representative of AI education companies, Linfeng Yang, co-founder and CEO of Onion Math, was invited to speak at the "AI Leads the Era, Education Creates the Future" themed forum. Addressing the widely watched topic of AI and education at this year's conference, Yang offered thought-provoking insights: "Despite the raging development of artificial intelligence, it has rarely touched the core of education — the roles of teachers and students remain unchanged, the boundaries between school and family are still distinct, and the conflict between quality and price persists."
At the conference, EO Intelligence released the "2019 China AI Commercial Landing Research Report," which conducted list-based research on AI landing situations for startups, mature enterprises, and local cities,集中 showcasing the year's achievements and commercial progress of AI applications in China. Onion Math, Jingtai Technology, and IceKredit were selected among the "Top 100 China AI Commercial Landing Enterprises," while 360 Finance was named to the "2019 Top 60 Mature China AI Commercial Landing Enterprises." (See full coverage: [Onion Math] 2019 World Artificial Intelligence Conference: Onion Math Selected as Top 100 China AI Commercial Landing Enterprise; [EO] EO Intelligence Releases 2019 China AI Commercial Landing Series Rankings, SenseTime and Megvii Lead Startup Top 100)
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Consumer | Three Squirrels Posts First Post-IPO Earnings Report: Revenue and Net Profit Both Grow
On the evening of August 29, 2019, Three Squirrels released its first earnings report since going public. For the first half of 2019, Three Squirrels achieved revenue of 4.511 billion RMB, up 39.58% year-over-year; net profit attributable to parent company shareholders was 266 million RMB, up 27.94% year-over-year. Both revenue and net profit showed double-digit high-speed growth.
Founded online, Three Squirrels rapidly grew into one of the most competitive and influential companies in the snack food sector, with its core nut snack category ranking first in all-online sales for seven consecutive years. As a major component of Three Squirrels' sales, online e-commerce platform transaction volume (GMV) reached 4.806 billion RMB in the first half of 2019, with operating revenue of 3.998 billion RMB; self-operated APP operating revenue was 41.2763 million RMB, with total online revenue accounting for 89.54%. (See full coverage: [Times Data] Data Analysis of Snack Industry Listed Companies' Semi-Annual Reports: Who's Leading at Halftime?)
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Consumer | Jordan&Judy Opens First National Experience Store in Shenzhen
At the FreeS Fund CEO Annual Meeting in late March 2019, Huidi Luo, chairman of lifestyle brand Jordan&Judy, said that the big opportunity for home lifestyle products lay in offline stores, where differentiation was easier to achieve.
Five months later, Jordan&Judy's first national experience store officially opened in Shenzhen. Address: Unit 20B, B1 Floor, North Zone, Zhuoyuehui Shopping Center, 126 Zhongkang Road, Futian District, Shenzhen.
Jordan&Judy is positioned as a home lifestyle brand better suited for Chinese consumers. Through original design, hit-product thinking, and high-frequency SKU updates, it applies a product design philosophy of simplicity, fashion, fun, and a touch of trendiness to provide products that align with the consumption values of a new generation of users. (See full coverage: [Jordan&Judy] First Jordan&Judy Experience Store Opens! Shenzhen Trendsetters First to Check In!)
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Consumer | Saturnbird Launches Coffee Empty Can Recycling Program
Since summer 2018, Saturnbird has shipped out tens of millions of its small cans. Among these millions, whether large empty cans or mini cans, standard editions or collaboration editions — every single one can participate in the Return Program.
When the small cans were first designed, 100% recyclable materials were chosen, and the factory confirmed that recycled materials could be reused — though not for food-related packaging materials. What they will become actually doesn't matter; what matters is that when users take the first step to help them return, they embark on a new journey. (See full coverage: [Saturnbird] PROJECT RETURN, Return Program.)
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Hard Tech | CoreXVision Releases World's Leading Single-Photon Detection Laser Ranging ToF Chip
As artificial intelligence moves toward application and gradually becomes widespread in mobile terminals, smart homes, industrial robots, and future autonomous driving, accurate perception of real environments by smart terminals becomes particularly important. As an important sensor for machine 3D vision, Time-of-Flight (ToF) 3D image sensors based on laser pulse flight time provide additional dimensional perception compared to traditional 2D image sensors (CMOS Image Sensor), giving smart terminals more precise and efficient environmental scene capture capabilities.
However, current pulse flight time-based ToF ranging 3D imaging costs remain prohibitively high, becoming an obstacle to AI development. A typical case is the LiDAR currently used for autonomous driving. Also based on ToF laser ranging principles, but due to discrete chip and component design approaches, 64-line ranging LiDAR crams numerous discrete components and chips into a cramped cavity space, making it difficult to resolve cost, power consumption, heat dissipation, and stability/reliability challenges for mass production.
Addressing current industry pain points, CoreXVision released the world's leading single-photon detection-based laser ranging ToF chip. This chip achieves ultra-high sensitivity, high-resolution single-photon detection arrays on low-cost CMOS processes, integrating self-developed ultra-high precision ranging circuits and anti-interference digital algorithms. Compared to current indirect ToF 3D ranging implemented by modifying CMOS pixel image sensors, direct ToF based on single-photon pixel (SPAD) arrays possesses ultra-high photoelectric detection sensitivity, enabling long-distance detection at low laser power and reducing overall system power consumption and cost. (See full coverage: [Nanjing CoreXVision Microelectronics Technology Co., Ltd.] CoreXVision Releases World's Leading Single-Photon Detection Laser Ranging ToF Chip)
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Hard Tech | Xinyi Information XY1100 NB-IoT Ultra-High Integration SoC Passes China Mobile Chip Qualification in First Round
Recently, the XY1100 — the industry's highest integration NB-IoT chip developed by Xinyi Information Technology — passed the industry's most difficult China Mobile chip qualification test in its first round, without undergoing multiple pre-test摸底 rounds, becoming one of the manufacturers to most smoothly pass China Mobile's NB-IoT chip qualification test.
Going forward, Xinyi Information Technology will continue to increase R&D investment, focus on ensuring mass shipment of customer products, and further improve product maturity, stability, and reliability, laying a solid chip foundation for the vigorous development of the NB-IoT industry. (See full coverage: [Xinyi Information Technology] Steady Progress! XY1100 NB-IoT Ultra-High Integration SoC Passes China Mobile Chip Qualification in First Round!)
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Hard Tech | Jiuzhou Yunjian and LinkSpace Complete T6 Rocket Engine Contract Signing
At 10:30 a.m. on August 10, LinkSpace's self-developed next-generation reusable test rocket (RLV-T5) conducted its third launch and recovery test at the Lenghu Rocket Test Base in Qinghai Province, and the test was successful.
At the Lenghu launch and recovery test site, LinkSpace and Jiuzhou Yunjian announced a plan: LinkSpace's next-generation RLV-T6 reusable rocket project will enter into deep cooperation with Jiuzhou Yunjian for joint development.
The T6 rocket is positioned as a vertical recovery verification rocket designed to fly beyond 100 km. It will endure the harsh environment of atmospheric reentry and require multiple engine restarts and deep throttling capability. At this altitude, the pressure-fed engine used on the T5 rocket cannot meet test requirements. Jiuzhou Yunjian's "Lingyun" liquid oxygen-methane engine is currently the only pump-fed liquid rocket engine in China that supports rocket recovery, making it the ideal partner for the T6 rocket. (See full coverage: [Jiuzhou Yunjian] Recovery Test Success Again! Jiuzhou Yunjian and LinkSpace Complete T6 Rocket Engine Contract Signing)
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Hard Tech | MaiFei Estimates Precision Agriculture Base in Southern Montreal, Quebec, Canada
Empowering global agricultural production and transforming the future of the agricultural industry is MaiFei's mission. To provide more precise and scientific agricultural solutions — including intelligent analysis of monitoring data for high-value Canadian agricultural crop varieties — and better help growers make production decisions, MaiFei established a precision agriculture base in southern Montreal, Quebec, Canada this summer.
On August 1 this year, MaiFei conducted a monitoring demonstration at a private farm in Saskatoon, Saskatchewan, Canada. The MaiShi monitoring drone, unaffected by geographical conditions, monitored wheat and corn and successfully completed precise scientific monitoring operations.
On August 13, at a private farm in Kapuskasing, Ontario, Canada, the MaiShi monitoring drone was once again the focus. With simple operation, the fully autonomous flying monitoring drone completed monitoring operations in a rapeseed field. Moreover, the precise scientific monitoring data can effectively guide plant protection spraying. (See full coverage: [MaiFei Technology] Overseas Strategic Partnership | MaiFei Is Worth Having)
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Entertainment | Wuhan Mayor Zhou Xianwang Visits 2:10 Animation to Accelerate Building "Animation Capital"
On August 1, Deputy Party Secretary and Mayor Zhou Xianwang conducted a "Stay True to Our Original Aspiration and Keep Our Mission Firmly in Mind" themed education research visit to the Donghu New Technology Development Zone, visiting animation companies including 2:10 Culture Communication to learn about their development and hear their suggestions.
Zhang Shihua, Member of the Standing Committee and Director of the Publicity Department; Wang Xiangwang, Member of the Standing Committee and Party Secretary of Donghu Development Zone; Chen Xiexin, Vice Mayor; and Chen Ping, Director of Wuhan Donghu New Technology Development Zone Management Committee, accompanied the visit. Heads of the Municipal Science and Technology Bureau, Economic and Information Bureau, Finance Bureau, Culture and Tourism Bureau, and Tax Bureau participated.
Mayor Zhou's delegation visited 2:10 Culture Communication's comic, animation, and data R&D centers, learning about advanced technologies and production processes such as animation production and motion capture, and watched the company's featured animation works. (See full coverage: [2:10 Animation] Wuhan Mayor Zhou Xianwang Visits 2:10 Animation to Accelerate Building "Animation Capital")
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FreeS Fund Portfolio Company Awards
▍NextVPU Ranks Top 10 in AI Sector at 8th China Innovation and Entrepreneurship Competition (Zhejiang Division)
The AI sector finals of the 8th China Innovation and Entrepreneurship Competition (Zhejiang Division), hosted by the Zhejiang Provincial Department of Science and Technology and the Torch High Technology Industry Development Center of the Ministry of Science and Technology, officially launched on August 28. The Zhejiang Division aligned with national competition standards and added an AI sector based on Zhejiang's emerging industry characteristics, building upon the six sectors of the national competition.
NextVPU stood out from over 1,700 participating enterprises across the province with its strong technical R&D capabilities, winning top 10 in the AI sector and the Excellence Award in the Growth Group.
As a global innovation leader in AI visual assistive devices, NextVPU uses artificial intelligence technology to comprehensively build new ways of life for visually impaired people in travel, reading, and home living. The "Angel Eye" innovation series, represented by the Angel Eye smart glasses and Angel Eye smart reader, currently comprises over 20 products and solutions, with users across 36 countries and regions. (See full coverage: [NextVPU] NextVPU Ranks Top 10 in AI Sector at 8th China Innovation and Entrepreneurship Competition (Zhejiang Division))
▍Saturnbird Selected for Changsha "Innovators 25" Enterprises
Starting in August 2019, EO Intelligence released lists of the most innovative enterprises by city. In Changsha, EO Intelligence selected 25 locally representative technology innovation enterprises (2019 Changsha "Innovators 25"), including 4 each in big data, new manufacturing, and healthcare; 2 in AI; and 2 in lifestyle services.
Saturnbird Coffee made the list. Selection rationale: Combining the convenience of instant coffee with the quality of specialty coffee, using freeze-drying technology to maximally restore coffee's original flavor. In 2019, completed a tens-of-millions Pre-A funding round. (See full coverage: [EO Intelligence] 2019 China Science and Innovation Cities Blue Book | Changsha "Innovators" 25 Enterprises)
▍AVL Mobile Security Receives "2019 Top 100 Software Enterprises in Wuhan" Honor; AVL Mobile Security CEO Pan Xuanchen Elected Chairman of Wuhan Cybersecurity Association
On August 15, the second general meeting of the Wuhan Cybersecurity Association was held at the Wuhan Municipal Party Committee Cyberspace Affairs Commission. The meeting elected the new council members, and AVL Mobile Security CEO Pan Xuanchen was elected Chairman of the Wuhan Cybersecurity Association by virtue of his influence in the cybersecurity field.
Shortly before, on the afternoon of July 31, AVL Mobile Security received the "2019 Top 100 Software Enterprises in Wuhan" award, recognizing its outstanding technical capabilities and innovation in mobile cybersecurity. (See full coverage: [AVL Mobile Security] AVL Mobile Security CEO Pan Xuanchen Elected Chairman of Wuhan Cybersecurity Association)
FreeS Fund Perspectives
▍Chen Pengyun, Huasheng Haoche: Direct Leasing of New Vehicles Has At Least 20x Growth Room
China's annual new vehicle sales are now nearly 30 million units, with direct leasing accounting for just over 1%. Even if total volume stops growing, the industry as a whole has at least 20x growth room to reach direct leasing penetration rates in developed countries.
For post-90s generations who have gradually grown accustomed to consumer finance products like Huabei and Baitiao, the mindset of "enjoy early" will slowly become mainstream. As long as they always have a car to drive, whether it's leased or purchased is becoming less and less important. (See full coverage: [New Economy 100 People] Direct Leasing Goes Downmarket: "At Least 20x Growth Room")
▍Miao Feng, Shangyue: Four Measures for Enterprise Digital Transformation
The four measures for enterprise digital transformation can be summarized as: infrastructure cloudification, IT architecture middleware-platformization, application SaaS-ification, and external connection to everything. Previously, to undertake a project, enterprises had to build or lease their own IDC (Internet Data Center) — an additional expense for any company.
Most enterprises' core competence is not building infrastructure but using it well. As enterprises develop, application scenarios gradually increase. Supported by a middleware platform architecture, building application scenarios is much faster than traditional methods, while application stability is much higher — gradually demonstrating the value of the platform.
Compared to independent deployment, SaaS also features out-of-the-box usability, standardized interfaces, and continuous upgrade iteration — all more suitable for future enterprise growth and development, and able to save more resources for society. (See full coverage: [Shangyue] How Enterprises Should Respond to Digital Transformation | Sharing at CEIBS "Ten Years Gathered, Future Coming" Event)
▍Lai Lipeng, XtalPi: AI Can Help Medicinal Chemists Break Through Limitations of Existing Experience and Knowledge
Using deep learning as a foundation and flexibly combining different methods according to specific project needs is a viable path to effectively explore and screen drug molecules among 10^60 potentially druggable compounds.
More importantly, AI can simultaneously perform comprehensive overall optimization of lead compounds. For example, in crystal form prediction conducted at XtalPi, we can calculate not just the most stable crystal structure but all possible crystal structures, providing options for subsequent drug development. (See full coverage: Speech by XtalPi Co-founder Lai Lipeng at the "4th Impact Investment Summit" hosted by China Renaissance & China Renaissance Alpha)
▍Li Jian, Xinliangji: Achieving an Efficiency Revolution in Ingredients Through Supply Chain Evolution
From a restaurant industry perspective, an ingredient that can thrive in the market long-term must have formed a high-efficiency closed-loop industrial chain. This is the true inflection point for an ingredient to gain lasting market vitality: through supply chain evolution, shedding the label of viral internet sensation, ultimately completing an efficiency revolution in ingredients. (See full coverage: [Huxiu App] Xinliangji's Li Jian: Viral Hits Don't Last, So Why Is Crayfish the Exception?)
▍Gu Lingyun, IceKredit: Regulation Defines and Protects the Boundaries of Innovation
It is regulation that defines and protects the boundaries of innovation — neither stifling with excessive control nor allowing chaos through complete deregulation. The driving force in this interactive process is technology; violent debt collection and usurious lending have become things of the past.
In the US, many data variables are "red lines" that cannot be used, such as race, gender, age, household registration, and skin color. But in China, discriminatory labeling like "first-tier city, rural person, occupational classification" still exists, with various "unwritten rules" becoming mountains blocking the path to inclusive finance. (See full coverage: [EO Intelligence] IceKredit's Gu Lingyun: Building Trust in Society, Equalizing Finance)
▲ Youth in the Spotlight, 18 Milestones and 20 Awards to Share | FreeS Fund Blackboard · April
▲ 4 New Funding Rounds, 5 Companies Leveling Up, Plus Two Gatherings | FreeS Fund Blackboard · March
