Crayfish Goes Global, Chips, Chatting About TikTok... 7 Updates and 3 Reflections During World Cup Season | FreeS Fund Blackboard · June

FreeS Fund's June newsletter — sharing the latest updates with our long-time friends and partners:

• FreeS Fund invested in "Gaoding," a digital marketing services crowdsourcing platform
• FreeS Fund hosted FreeS Talk, an offline sharing session for portfolio CEOs

Good news from the FreeS family:

• Deep Tech: Xinyi Information Technology released the world's first NB-IoT chip with integrated PA; QingTao Energy was shortlisted for the Gusu Innovation and Entrepreneurship Leading Talent Program's major innovation team; Baidu's new smart speaker launched with SoundAI Technology's technical support.
• Consumer: Xinliangji facilitated the completion of the first "China Good Shrimp Waters" and "China Good Shrimp Factory" certifications.
• Awards: Onion Math made the Forbes China 50 Most Innovative Companies list.

As a young fund, FreeS Fund will continue to stay grounded and push forward, looking forward to meeting innovation and the extraordinary.

FreeS News

1

FreeS Fund Invests in "Gaoding"

Recently, digital marketing services crowdsourcing platform "Gaoding" announced the completion of a multi-million-dollar Pre-A funding round jointly led by FreeS Fund and Baidu Venture.

Companies increasingly value digital marketing, but finding cost-effective marketing service providers has remained a pain point. Gaoding aggregates marketing service resources, screens quality marketing talent, connects clients and vendors, and ensures quality through standardized processes. Gaoding CEO Dong Li shared that the company's monthly GMV exceeded 2 million RMB in Q2, doubling quarter-over-quarter. Currently, creative marketing (copywriting, posters, etc.) accounts for roughly 40% of platform orders, while integrated marketing (content plus distribution channel packages) makes up about 60%. (See coverage: [36Kr] "Gaoding" Secures Multi-Million-Dollar Pre-A Round to Provide Cost-Effective "Precision Digital Marketing" Services for SMEs)

2

FreeS Fund Hosts "FreeS Talk," an Offline Sharing Session for Portfolio CEOs

"FreeS Talk" is a small-scale offline gathering for CEOs in the FreeS family. We invite knowledgeable experts and experienced FreeS family CEOs to share insights and practical experience on topics and directions that CEOs care about. The June 29 FreeS Talk focused on Douyin — a topic frequently discussed in the CEO group chat over the past two months. About 30 CEOs attended.

We invited three guests for in-depth exchanges with the CEOs. Junxiang Zhang, CEO of Erka Media and the behind-the-scenes driving force behind "Dujiao SHOW," one of the most popular short-video IPs on Douyin, analyzed the content market at a macro level and how CEOs should understand content; Bo Liu, a FreeS family CEO and founder of October Care, shared his journey of going all-in on Douyin and his practical experience; and Zehua Yan, former senior product manager at ByteDance and author of The Content Algorithm, introduced content recommendation algorithms — an unavoidable topic when discussing ByteDance products.

FreeS Perspectives

▍Feng Li: The Evolution of Snack Consumption Goes from Starch-Based Snacks to Animal Protein Snacks, Then to Premium Animal Protein Snacks

During the World Cup, 100,000 crayfish departed from Wuhan's Wujiashan Railway Center aboard the China-Europe freight train, destination Moscow. The crayfish from FreeS portfolio company Xinliangji were on that train. Speaking about the investment thesis for crayfish, Feng Li said that good brands absolutely contribute to the supply chain. Xinliangji's "flash-freeze freshness lock" technology keeps the cell walls of fish, shrimp, crab, and shellfish intact, so there's no excess water after thawing and the meat remains springy. (See coverage: [ChinaVenture] Worth 268.5 Billion: The World Cup Enters "Crayfish Time"!)

Aquatic products like crayfish are rich in protein and align with people's health consciousness. Feng Li said, from potato chips to duck necks to crayfish, you can see the evolution of snack consumption — from starch-based snacks to animal protein snacks, then to premium animal protein snacks. Crayfish are a classic example of high protein, low fat, and low cholesterol — pretty much the limit on the protein and health spectrum. (See coverage: [Sanlian Life Weekly] For the World Cup, China Shipped 100,000 Crayfish to Russia)

▍Feng Li: High-Valuation Unicorns with Uncertain Profitability Will Face a "Winter"

In 2017, direct financing's share of total social financing approached 30%, while the historical peak had only been 15%. Most of this capital ultimately flowed to the most visible, largest, and most expensive projects. Because Chinese capital was shifting from lending to investing at scale for the first time, and with limited experience, people tended to invest in projects that had enough backers and looked relatively safe. At the same time, money came in too fast and too much, and easily flowed to where it could be spent most lavishly.

However, this situation most likely cannot continue. In other words, "unicorn" companies that cannot turn a profit or have uncertain profitability prospects, yet carry high valuations, will face tremendous pressure going forward — especially those that burned cash to reach their current valuations. (See coverage: [China Business Journal] The Divergence of Unicorns)

▍Feng Li: Why Now Is the Time to Invest in Chips?

From the demand side, the rise of emerging industries like IoT, VR, and wearables has driven up overall demand for integrated circuits. Smart bands, watches, drones, and smart speakers are all gradually becoming connected and intelligent, with vertical scenario applications, no longer limited to the previously competitive general-purpose computing platforms.

This wave of chip industry development requires a high degree of integration between application scenarios and hardware configurations. As these vertical application scenarios emerge at scale, competition in the mid-to-high-end chip space is not out of the question. In fact, China is home to the world's largest surveillance camera chip company — Huawei's HiSilicon, which produces 70% of chips for global security cameras. (See coverage: [Economic Network] "Chip" Concept Stocks Break Out)

FreeS Family Updates

1

Deep Tech | Xinyi Releases World's First NB-IoT Chip with Integrated PA

On June 27, at MWC Shanghai, Xinyi Information Technology (Shanghai) Co. released the first NB-IoT chip representing the world's highest integration (single-chip CMOS PA integration) and ultra-low power consumption. Traditional NB-IoT solutions do not include PA, because integrating RF PA is challenging — high-power transmission can affect other circuits on the chip, such as pulling effects on PLL operation caused by inductive coupling. This chip achieves the highest integration globally and is the world's only NB-IoT chip with integrated RF PA.

The chip helps customers address performance, power, and cost challenges across various applications amid the coming wave of IoT. It significantly reduces module cost and development complexity while offering a very small form factor and achieving ultra-low power consumption: supporting deep sleep, normal sleep, standby, and low-power operation modes. (See coverage: [Electronic Innovation Network] Xinyi Releases World's First NB-IoT Chip with Integrated PA)

2

Deep Tech | QingTao Energy Shortlisted for Gusu Innovation and Entrepreneurship Leading Talent Program's Major Innovation Team

According to an announcement by the Suzhou Science and Technology Bureau, the 2018 first batch of Gusu Innovation and Entrepreneurship Leading Talent projects, following application, departmental review and recommendation, and expert evaluation by the Municipal Science and Technology Bureau, produced 4 major innovation teams and 85 entrepreneurship leading talent projects as shortlisted candidates.

Among them, FreeS family company QingTao (Kunshan) Energy Development Co. was shortlisted as a major innovation team for its project on "All-Solid-State Lithium Batteries and Their Key Materials and Production Equipment: Development and Industrialization." (See coverage: [Suzhou Science and Technology] Impressive! 2018 First Batch of Gusu Innovation and Entrepreneurship Leading Talent Projects Announced)

3

Deep Tech | Baidu's New Smart Speaker Launches with SoundAI Technology's Support

On June 11, Baidu's "New Voice Debut" Xiaodu new product launch event was held at the K6 Bear Paw Auditorium at Baidu Technology Park in Beijing. The new "Xiaodu Smart Speaker" officially made its debut in Houcun Village, becoming a "triple threat" in the smart speaker world with its "great sound, great usability, great fun" features.

SoundAI Technology custom-built the world's first 3-microphone ring array for the Xiaodu Smart Speaker, enabling flexible configuration that breaks the limitations of acoustic chamber design and unleashes unlimited ID design space, while balancing the trade-off between cost and performance. Additionally, the Xiaodu Smart Speaker adopts SoundAI Technology's complete SVK far-field voice wake-up and far-field ASR (Automatic Speech Recognition) services, delivering a more humanized voice interaction speed experience. To address wide-scenario challenges, SoundAI Technology introduced near-field and far-field children's voice recognition technology, making children's recognition more accurate and better aligned with children's interaction habits. (See coverage: [Sohu Technology] SoundAI Technology Partners with Baidu to Help Xiaodu Smart Speaker Become a "Triple Threat")

4

Consumer | Xinliangji Facilitates Completion of First "China Good Shrimp Waters" and "China Good Shrimp Factory" Certifications

On June 13, 2018, Qianjiang City was certified as "China Good Shrimp Waters," and Hubei Qianjiang Baolong Co. became China's first certified "Good Shrimp Factory." Meanwhile, the China Aquatic Products Processing and Marketing Association's Crayfish Branch also released the "Recommended by Crayfish Industry Branch" mark, with all crayfish products produced by Qianjiang Baolong authorized to use this mark.

At the certification event, Jian Li, CEO of Xinliangji and inaugural president of the China Crayfish Association, announced the official release of three group standards — "Live Freshwater Crayfish," "Frozen Crayfish Tails," and "Frozen Seasoned Fried Crayfish" — approved by the China Aquatic Products Processing and Marketing Association and filed with China's Ministry of Agriculture and Rural Affairs, and jointly drafted by the president unit and member units of the China Aquatic Products Processing and Marketing Association Crayfish Branch. (See coverage: [Phoenix Network Shandong] Tmall Fans Rejoice! China's First "Good Shrimp Waters" and "Good Shrimp Factory" Certifications Completed)

5

FreeS Family Award News

▍Onion Math Makes Forbes China 50 Most Innovative Companies List

On June 19, Forbes China released the "2018 China 50 Most Innovative Companies Full List," which aims to identify companies that lead industry development or significantly influence industry progress. The list is organized by categories including "Retail, Logistics, Entertainment, Online Education, Cloud Computing, Consumer Robotics, Smart Home, AI Services, Fintech, Blockchain, Healthcare, and Automotive." Onion Math made the list in the online education category. (See coverage: [Forbes China] China 50 Most Innovative Companies Full List)

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