A VC Leads the Way Out of the Quadrant | BlueRun Ventures Perspective

This year's primary market has slowed down — a sentiment shared across China's VC and PE circles. But BlueRun Ventures seems to be playing a different game.

"No matter how the market changes, we've always maintained a steady investment pace, avoiding over-investing when the market is overheated and under-investing when it's too cold," Jui Chan, managing partner at BlueRun Ventures, told PEDaily. "This year we've invested in more than 20 projects, with total investment approaching 1 billion RMB." Blocking out external noise is something the firm emphasizes internally.

These are people willing to bet early. Since its founding, BlueRun Ventures has focused on early-stage tech investing, making independent judgments before market consensus forms. To date, it has backed disruptive stars like Li Auto. The firm currently manages over 15 billion RMB in assets, making it one of China's largest early-stage funds.

Cycles are turning, and deeper shifts are unfolding from China to the world. On November 15, BlueRun Ventures held its 2024 Annual Fund Partners Meeting, where Jui Chan — who has navigated multiple cycles — shared his observations: built on technological transformation, past growth momentum came from free flow and optimal allocation across international markets, but that momentum is increasingly shifting toward great-power competition. Encouragingly, however, China's traditional strengths are gaining new capabilities. Jui Chan said BlueRun Ventures' conviction remains unchanged: Chinese talent has the ability to create world-class tech products and services, and to create a new era. The key to doing so, he said, is to "break out of the quadrant and shatter your own mental block."

Every era has its core technological transformation, gestating that era's Big Thing. Under this new wave of change, where will Chinese tech investment head? We might find some clues from this early-stage VC.

Let's start with this year's hottest sector: artificial intelligence.

Right now, China's AI landscape is seeing waves of fundraising, with a cohort of iconic unicorns rising. Behind star projects like Moonshot AI, AgiBot, Galaxy Universal, Yuaiweiwu, Mainfunc, Luchen Tech, and Muyan Zhiyu stands the same early-stage investor — BlueRun Ventures.

In June this year, Galaxy Universal announced the completion of its angel round, with investors including BlueRun Ventures, Meituan, BAIC Capital, SenseTime Guoxiang Fund, iFlytek Fund, Qiming Venture Partners, Matrix Partners China, Source Code Capital, and IDG Capital — a mix of top financial and strategic investors totaling 700 million RMB, breaking the record for angel round funding this year.

But BlueRun Ventures had already become its earliest investor a year prior. In June last year, just one month after Galaxy Universal's founding, the company received its first round led by BlueRun Ventures, which has since added to its stake across multiple rounds.

How does it manage to discover and capture such frontier projects ahead of others? Jui Chan says the answer is simple: sustained attention and deep research into industries, enabling the firm to foresee potential before they become investment hotspots. This includes building an entrepreneur ecosystem — when AI technology first broke through, BlueRun Ventures launched the Buming Entrepreneurship Camp and the AGI Pioneer Club. It also requires a broader, more integrated perspective: most of its investment team has global industry and educational backgrounds, allowing faster access to first-hand information and trends in AI industries at home and abroad.

More importantly, as an early-stage investor, BlueRun Ventures demands constant sensitivity to underlying macro trends. In its view, factors like great-power competition and aging demographics are significant drivers of AI and robotics development. It was this bottom-up understanding that enabled decisive and rapid action when the AI wave arrived.

BlueRun Ventures also developed its own AI investment thesis relatively early: the triple wave of AI + new interfaces + robotics will bring revolutionary changes to productivity and production relations, sparking a new era. For BlueRun Ventures, AI isn't treated as a single track but as a framework for systematic deployment, covering the upstream and downstream of the industrial chain — from AI infrastructure, large models, and middleware to the application layer.

Traveling regularly between China, Europe, and the US, BlueRun Ventures has come to deeply appreciate that China can forge a distinct AI path.

Leveraging China's advanced manufacturing and supply chain advantages, BlueRun Ventures has invested in embodied intelligence and AI hardware companies including AgiBot, Galaxy Universal, Lingchu Intelligent, oladance, VITURE, Keyi Tech, and Yueran Innovation. At the infrastructure layer, it also led a Series A++ round of over 100 million RMB for thin-film lithium niobate IDM company Jike Guanghe, and made follow-on investments in PPIO.

In AI software, BlueRun Ventures believes China should leverage its vast market to create C-end applications where everyone creates and everyone uses. Among its portfolio companies, Moonshot AI, founded less than two years ago, has seen its Kimi intelligent assistant become a productivity powerhouse — latest data shows over 36 million monthly active users across all platforms. Muyan Zhiyu's founder Yueguang Zhang previously created "Miaoya Camera," a viral product with society-wide impact. And Yuaiweiwu, founded by former Gaotu Techedu core executive Huaiting Zhang, is developing an intelligent companion product positioned for language learning.

In fact, tracing AI's development trajectory, BlueRun Ventures internally proposed a strategic judgment back in 2005: "Without big data, there is no artificial intelligence; without cloud computing, there is no big data." The team thus pivoted its investment focus from mobile internet to intelligent technology, making targeted deployments in cloud computing, big data, and other digital economy sectors, backing representative projects like QingCloud and Boray Data.

Later, recognizing the convergence opportunity between intelligent technology and hardware, BlueRun Ventures scored with Li Auto, Gaussian Robotics, and Lanxin Robotics. As it further observed demand for AI infrastructure, it added Corewise Tech, PPIO, and others to its portfolio.

Looking back, BlueRun Ventures appears to have continuously iterated its investment strategy to detect changes early, positioning ahead of industry inflection points. Today, 90% of its portfolio companies are proactively sourced.

Its thinking on exits may also offer lessons for the industry. This year, the primary market has gone all-in on exits. And the best exit path is simply investing in good companies. In two closely watched big-tech AI acquisitions this year — ByteDance's acquisition of headphone brand oladance and OPPO's acquisition of Waveform Intelligence — both were BlueRun Ventures portfolio companies, with both achieving smooth exits within a year of investment.

Looking broadly, Chinese companies going global has become a clear trend. Especially in AI, "companies with international vision are better positioned to seize AI as a global emerging technology wave," BlueRun Ventures believes. "AI entrepreneurship needs global vision from day one — entrepreneurs must consider an important question: where will future markets expand?"

Meanwhile, Chinese companies and brands face the opportunity to step onto bigger stages and build more world-class products. But which markets to enter? How to build local capabilities? How to select categories and channels for going global? These are challenges confronting numerous companies. With cultural, policy, institutional, and other constraints, this is destined to be a journey full of thorns and challenges.

And BlueRun Ventures may be among the best-positioned early-stage investors to support entrepreneurs in internationalization. On its investment team, Managing Partner Jui Chan spent ten years doing industrial investment in Silicon Valley, with over 10 years of industry experience and 20 years of tech investing experience across China and the US. Many other key members also have global backgrounds, with extensive work experience and resources in other international markets.

Over the years, BlueRun Ventures has regularly hosted going-global salons and maintained close communication with portfolio companies, continuously helping them develop awareness of internationalization's importance. As a global fund, BlueRun Ventures also leverages its overseas investment experience and global network to connect portfolio companies with funding, customers, and other resources.

Anxin Wangdun is a cybersecurity company that BlueRun Ventures has backed since its angel round. Starting from memory security, Anxin Wangdun has focused on developing information security attack-defense products since 2005. Cyber attacks are a shared global threat, and as a BlueRun Ventures portfolio company, Anxin Wangdun recognized early the importance of global layout and established overseas expansion as its development direction.

In this process, BlueRun Ventures actively assisted with executive recruitment, introduced overseas board candidates during subsequent business development, and helped expand overseas operations by connecting the company with business resources in Singapore and the Middle East. Today, the company continues to land orders in key overseas regions. Leveraging its talent advantages in cybersecurity, Anxin Wangdun also partnered with the Abu Dhabi Investment Office to establish its global headquarters in Abu Dhabi Global Market, launching the next phase of growth.

Additionally, based on China's "new energy + intelligentization" industrial advantages in automobiles, Chinese new energy vehicle supply chain companies are also well-received overseas. Taking BlueRun Ventures early-stage portfolio company Machenike as an example, BlueRun Ventures has actively helped the company reach cooperation agreements with partners and expand its global footprint. Starting in 2022, Aramco Ventures' Prosperity 7 Ventures has invested in Machenike across four consecutive rounds — its only new energy + autonomous driving investment in China.

Meanwhile, Chinese low-altitude companies are going global. As early as 2021, before the industry exploded, BlueRun Ventures invested in eVTOL company TCab Tech. The team then introduced overseas investors and customers to TCab Tech, helping it expand business and land orders in the Middle East, accelerating its globalization pace. Not long ago, TCab Tech signed a cooperation agreement with overseas strategic partner Autocraft to build "air taxi" application scenarios in the Middle East.

PEDaily learned that among BlueRun Ventures' portfolio companies, over 50% have overseas operations. For example, Nankai Synthesis is one of only two global suppliers of solid-phase synthesis carriers, commanding 40% of global market share; Gaussian Robotics has shipped to over 50 countries and regions; consumer XR glasses brand VITURE achieved over 10 million organic views on a single US media platform without promotion, rapidly capturing the US, European, and Japanese markets. Here, batches of world-class companies from China are emerging.

2024 has been a year of abundant harvest, but BlueRun Ventures maintains a strong sense of crisis internally. "We constantly ask ourselves: Is our thinking sufficiently forward-looking? Do we have adequate coverage of excellent entrepreneurs? Can our team keep up with these massive changes and bravely break out of the quadrant?" Jui Chan said. The new generation of venture funds needs both the daring, first-mover conviction of dollar funds — the willingness to bet ahead of the curve — and the grounded, industry-deep, locally resource-integrated approach of RMB funds. He didn't hide his and BlueRun Ventures' "grindset" nature: "Only through continuous self-advancement and breaking our own mental blocks can we stay at the table."

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