Jui Chan, BlueRun Ventures: Investment Volume Won't Drop This Year, Capital Concentrating on Winning Bets

Recently, Jui Chan, managing partner at BlueRun Ventures, sat down with The Paper's tech desk for an interview. As an investor with nearly two decades in early-stage tech investing, how does Chan view the changes and constants in tech investment in recent years? Here's what he shared:

As consumer investment fever subsided, technology — especially hard tech — became the new darling of investment firms. But after the scorching year of 2021, tech investment has shown uneven heating and cooling. The days of sky-high valuations and deal-grabbing seem to be history. Entering 2022, the tech investment circle has turned somewhat quiet.

Chan has spent close to 20 years in early-stage tech investing. He founded BlueRun Ventures' China fund in 2005 and has served as managing partner since. BlueRun Ventures is now among the largest early-stage funds in China. One of its most notable investments is Li Auto, which BlueRun backed from Series A through five consecutive rounds — a bet on the thesis that "smart vehicles have the potential to become the mother ecosystem in the next tech generation."

In Chan's view, China's tech investment boom will continue, buoyed by its engineer dividend. While investment always has its ups and downs, quality projects can still secure funding during downturns — in fact, they may attract even more capital, because resources are concentrating toward the best projects. For investment firms, specialization and verticalization will be the major trend going forward.

Jui Chan, Managing Partner, BlueRun Ventures

2015: The Watershed Between Model Innovation and Tech Innovation

The Paper Tech Desk: In your nearly 20 years of early-stage tech investing, what do you see as the biggest change in the industry?

Jui Chan: In the early years, we invested mostly in internet companies in China — whether PC internet or later mobile internet. These were model innovations, and most models were copies of foreign business patterns.

The watershed came in 2015. From then on, we saw more technology-driven entrepreneurs emerge — for instance, startups powered by AI, cloud computing, and other underlying technologies.

Later, driven by the need to solve "chokepoint" problems, semiconductors, new materials, and other hard tech closely tied to foundational technology also became investable targets.

The changes over these 20 years have been quite significant, driven by both external and internal factors. For example, China's engineering workforce has gradually expanded, and this shift in talent supply has led to major changes in innovation themes.

The Paper Tech Desk: How long do you think China's engineer dividend can last?

Jui Chan: The profile of engineers is actually evolving. There used to be many returning internet engineers from overseas; now the trend is toward diversification — engineers specializing in AI algorithms, AI chips, and other directions, as well as researchers across fields like bioscience, and many interdisciplinary talents.

More and more young people are receiving quality education and valuing research. Although domestic birth rates have declined in recent years, China remains a large country. I believe the engineer dividend can sustain at least through 2035.

Consumer and Tech Investment Each Have Pros and Cons

The Paper Tech Desk: This year's investment climate has cooled noticeably compared to last year. What pace is BlueRun maintaining?

Jui Chan: Each member of our investment team looks at a minimum of 10 projects per week. On average, we invest in at least 50 projects annually. Our investment amount this year is basically flat with previous years. But given the current environment, the supply of projects has shifted somewhat. Some founders feel the market is less optimistic and their fundraising urgency has weakened, so overall entrepreneurial activity is relatively lower.

The Paper Tech Desk: Do you think this slower pace will continue?

Jui Chan: Investment always has its ups and downs. I think there should be some rebound by year-end.

The Paper Tech Desk: How does hard tech investment logic differ from consumer tech investment logic?

Jui Chan: The biggest difference is that hard tech demands extremely high-caliber research talent, requires more R&D investment, and has longer development cycles. Unlike the internet, where applications can be built in a short time, internet companies prioritize operational capability. For hard tech companies, operations come very late in the game. Whether they can actually develop the product is the first and most critical hurdle they must overcome.

We need to assess whether the technology has sufficient differentiation, whether costs can be driven low enough, and whether a viable commercial application scenario exists to ultimately commercialize the technology. Since hard tech products often target B-end customers, their sales models differ from C-end as well. These are all factors we must weigh.

The Paper Tech Desk: For investors, is judging hard tech projects harder than internet projects?

Jui Chan: The challenges differ. With internet projects, the difficulty lies in the massive investment scale required. But internet barriers are relatively low, and business models are easily copied by competitors. So the first 3-4 years require constant "cash-burning" to scale up and keep consumers satisfied.

For hard tech projects, we need to understand the project's nature and its risks — including technological differentiation barriers, IP completeness, application scenarios, and input-output ratios. Additionally, it's crucial whether your capital has sufficient patience, because hard tech can't be decided in three years like internet companies. It may take 5-10 years to truly see profitability. For investors, extending the harvest period from 1-3 years to 5-10 years — is that a challenge?

But at the same time, internet project outcomes are binary: you might earn billions, or you might earn zero. Hard tech projects tend to be more balanced. Even without strong commercialization results, you still have intellectual property that can be monetized to recover part of your investment. Another characteristic of hard tech: it easily forms head-of-market advantages. The technology R&D requires years of accumulation, but if you succeed in a specific domain, the profits will far exceed those of consumer companies — provided you reach the top three in your vertical.

Government Guidance Funds Become Major LPs in Hard Tech Investment

The Paper Tech Desk: It seems everyone prefers new energy projects this year, unlike last year's semiconductor focus. What investment philosophy does BlueRun apply when selecting hard tech projects?

Jui Chan: There will always be certain verticals that capture investor favor, and these will constantly shift.

Policy factors around dual carbon goals, rising EV sales, new energy valuations climbing — these attract more attention. Semiconductor project cycles are relatively longer.

When we select projects, we first ensure the product or project actually meets a need — not technology for technology's sake, launching products without market demand. Second, entrepreneurship must ride the wave, creating value within trends. It's like surfing: some people have excellent technique but never catch the wave; others always seem to be on it at the right moment, riding with its momentum. Timing matters. Our industry research when investing is aimed at judging the next wave. Third is the team — can this team execute?

The Paper Tech Desk: Based on your observations, what are the current weaknesses of domestic tech startups?

Jui Chan: Many domestic tech startup founders have research backgrounds. They've spent the past decade or decades immersed in research, but have limited management experience. To commercialize products, you inevitably need larger teams — scaling to hundreds or thousands of people. How to manage a growing team, implement incentives, and improve efficiency — these are enormous challenges they will face.

The Paper Tech Desk: Government guidance funds have now become the dominant LP force. Why do you think this shift has occurred?

Jui Chan: BlueRun Ventures has several government guidance funds among its LPs. The reasons for this shift: first, hard tech industry matters enormously for both economic value creation and national competitiveness enhancement, so government support is substantial. Second, hard tech project cycles are long, requiring LPs with longer investment horizons — and government guidance funds fit this profile.

Specialization and Verticalization Are the Major Trend for Investment Firms

The Paper Tech Desk: The investment firm space is getting crowded. More firms are joining early-stage investing, and post-investment value-add has become a competitive chip among firms. What's your view?

Jui Chan: We do empower our portfolio companies, but a firm's competitiveness ultimately depends on its ability to identify quality assets. You must find "non-consensus." For good early-stage investors, the most important value-add is working with founders at the 0-to-1 stage to perceive and meet needs earlier and more precisely.

The Paper Tech Desk: How do you see the future development trend of the investment industry?

Jui Chan: It will become increasingly professional. As competition intensifies, founders will place more emphasis on whether an investment firm is sufficiently professional: Do they deeply understand my vertical? What support can they provide post-investment? Helping founders with capital operations including IPOs is also important.

Previously, investment firms could look at scattered projects. Going forward, firms will choose verticals they excel in and go deep to build strength. We currently focus on four verticals: new energy, new efficiency, new interaction, and new science.

The Paper Tech Desk: Can you share your scientific worldview with us?

Jui Chan: A scientific worldview must be dialectical. When selecting investments, it's easy to be swayed by a founder's charisma, but ultimately you must rationally conduct layer-by-layer dialectical analysis, verifying like conducting experiments — this is what we always emphasize. You must study product architecture, market demand, core capabilities of team members, calculate every key metric, and approach investing with scientific methodology.

Further Reading

BlueRun Ventures: The Golden Age of Tech Investment Arrives — Being a Calm First Mover in Era Transformation and Industrial Innovation

Missed BlueRun Demo Day with 4000+ Project Connections? Here's What You Can Do

See Mountains, See World, See Self | BlueRun Summer Outing Notes

BlueRun Named Cyzone "2022 China's Most Admired Early-Stage Investment Firm" TOP 3

BlueRun Ventures was established in Silicon Valley in 1998. BlueRun Ventures China was founded in 2005 as a venture capital firm focused on early-stage startups.

Currently, BlueRun Ventures manages multiple USD and RMB dual-currency funds in China, with assets under management exceeding RMB 15 billion, making it one of the largest early-stage funds domestically. Its investment stage focuses on Pre-A and Series A, covering hard tech and innovative interaction, enterprise technology, new consumption, and healthcare. It has cumulatively invested in over 150 startups, including Li Auto, Waterdrop, QingCloud, Guazi.com, Qudian, Songguo Chuxing, Ganji.com, Energy Monster, Yuntu Semiconductor, Machenike, Yunsheng Intelligence, Anxin Wangdun, and BioMap.

BlueRun Ventures has been ranked first in Zero2IPO's "China Top 30 Early-Stage Investment Firms," first in ChinaVenture's "China Best Early-Stage Venture Capital Firms TOP30," and named among Preqin's Top 10 VC fund managers globally for sustained high-return performance.

Additionally, BlueRun Ventures has received consecutive recognition from Forbes China, 36Kr, Cyzone, Caixin Media, CBNweekly, Jiemian, and other media institutions for honors including "China's Best Early-Stage Firm of the Year," "China Top-Tier Venture Capital Firm," "Most Founder-Friendly Early-Stage Firm of the Year," and "Most Influential Early-Stage Firm of the Year."