Linear Capital Perspectives | Rather Than Trends or Windfalls, We Focus on Whether Frontier Technology Can Deliver 10x or 100x Efficiency Gains for Industries

Last week, at the 16th China Investment Annual Summit hosted by ChinaVenture, Harry Wang, CEO and Partner at Linear Capital, joined a panel discussion on "China's Digital-Intelligent Transformation and Industrial Restructuring" and shared the firm's perspective on the topic.

The session was moderated by Jiang Haotian, Founding Partner of Zhilin Capital, with fellow panelists including Xiong Weiming, Partner at China Growth Capital; Wang Xiao, Founder of Unity Ventures; Mao Chengyu, Founding Partner of Yunqi Capital; Zeng Zhenyu, Managing Director at DCM; Zhou Daohong, General Manager of Guosheng Capital; and Li Jia, Partner at SAIF Partners. A full transcript of the session has been published on ChinaVenture's website and WeChat account, and can also be accessed via the "Read More" link.

During the discussion, Harry noted that Linear Capital was founded in September 2014 and currently focuses on investing at the intersection of frontier technologies — big data, AI, and robotics — with industries facing acute pain points, with the aim of delivering tenfold or hundredfold efficiency gains. "Kujiale, which the moderator and other guests just mentioned, we invested in at the angel stage. Same with Sensors Data, Guandata, Agile Robots, and AI-powered agriculture and livestock projects — what we call AI applied to specific industries."

Using farming and pig farming as examples, he explained that their portfolio companies use technology to improve methods the Chinese have relied on for millennia — dramatically more efficiently and at far lower cost. "We're very interested in 'black tech going down to the countryside' — in other words, entering real industries. Our investment team comes from engineering backgrounds, and we gravitate toward technical founders, engineers and product managers. For eight years, we've been looking for entrepreneurs whose taste and sensibility match ours."

When asked about macro trends and which industries present greater opportunities for industrial chain restructuring and efficiency integration, Harry responded that Linear Capital is perhaps less fixated on macro momentum and hot sectors than other firms. "What do we care about? Is the problem severe enough, large enough? And can technology — especially big data, AI, and robotics — deliver a step-change, dimension-lifting efficiency improvement in solving it?"

As for why they invested relatively early in seemingly "backward" fields like AI-powered pig farming, Harry elaborated: "We looked at the pig farming process, and overall it's still remarkably antiquated. Take a few core areas — health management. You can absolutely use technology to monitor weight, body temperature, and other indicators for health tracking instead of relying entirely on manual labor, yet many places still use very traditional methods. Then there's the serious problem of pig theft in the industry. Normally, if a pig dies, the caretaker takes a photo and reports it to the farming company, saying it died of disease or something — and the company doesn't make the caretaker compensate for that loss. But some people will pose the same dead pig three times, pretending three pigs died, then take two healthy ones and sell them for profit. In fact, technology can completely solve this. Tech can ensure 'a pig only dies once,' reducing losses in this area to zero."

"So we focus on projects that use technology to solve real industry problems. We see beta as a macro trend that affects how efficiently technology penetrates industries, but alpha is whether, once frontier tech is adopted by an industry, it can deliver tenfold or hundredfold efficiency gains. We focus more on alpha. For beta, we treat it as a negative screen — as long as the sector doesn't collapse, we'll wait it out. The most important thing in tech investing is patience."

About Linear Capital

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Linear Capital is a specialized investment firm focused on Data Intelligence and Frontier Technology.

Linear Capital currently manages ten funds with total AUM of approximately US$2 billion.

We focus on early-stage opportunities in Data Application, Data Infrastructure, and Frontier Technology applications. We typically lead seed to Series A rounds, with typical check sizes of US$3–8 million or RMB equivalent.

Our early-stage investments include Horizon Robotics (US$3B valuation), Tongdun (>$1B), Kujiale (>$1B), Sensors Data, Tezign, Rokid, Guandata, Agile Robots, and over 120 other founding teams. The combined valuation of Linear's portfolio companies is approximately US$20 billion.

In the near term, Linear Capital is working to become the premier Data Intelligence Technology Fund, with a long-term vision of evolving into the most influential Frontier Technology Application Fund.