Source Code Capital 2017: The Year of Establishing Our Footing

In the dynamic world of the new economy, three and a half years in, we've only just found a small foothold. Internally, we called 2017 Source Code Capital's "Year of Establishment." Right around our third anniversary, we successfully raised our third RMB and USD funds. Our third RMB fund attracted investments from new-economy business leaders while also securing capital from national guidance funds, top-tier fund-of-funds, and major state-owned enterprises. Our third USD fund drew investments from multiple sovereign wealth funds, charitable foundations, pension funds, fund-of-funds, and family offices. The successful close of a third fund is generally considered a critical milestone for a fund manager's survival and "establishment." At this stage in the industry's development, we feel fortunate — and it hasn't been easy — to have carved out a small base.

Ma Hui Growth

This has been a year of abundant harvest and growth for our "Ma Hui" community. Among our more senior members, some have broken through $10 billion, $30 billion, and $50 billion in valuation; our younger members have also crossed $100 million, $500 million, $1 billion, and several billion in relatively short order. On one hand, we've deepened our focus on select key areas within our "Three Horizontals, Nine Verticals" framework. On the other, we've spent day and night alongside our Ma Hui entrepreneurs, serving as their "true friends" who can keep pace and offer real help. Learning from entrepreneurs is one of the most important methods for investors to learn. Whether we can keep up with and genuinely assist these founders who improve 1% every day is both the pressure that drives us and the motivation that propels us forward.

2017 Ma Hui Fundraising (Selected)

Source Code Capital focuses on "Internet Plus," including: fintech, industrial internet, and service internet; "AI Plus"; "Global Plus"; and other innovation sectors. Representative portfolio companies include: Qudian, Geshang Wealth, INK Group, Zhirong Group, Suishou, and Cijinrong in fintech; Yijiupi, Yimi Dida, Xiaoguan Technology, Baibu, and Ruigu in industrial internet; Meituan, Lianjia, MOGU, and Juli Xinfang in service e-commerce; as well as "AI Plus" companies like ByteDance and CHJ Automotive, and "Global Plus" companies like Zenjoy and Mybo.

◽ Hui Fenqi Raises Another 230 Million Yuan as Rental Installment Market Enters Era of Giants

◽ Synced Completes Pre-A Round Led by ByteDance, Source Code Capital Follows On

◽ Cijinrong Announces 65 Million Yuan Series A Led by Source Code Capital

◽ Yongqianbao Announces 466 Million Yuan Series C with Source Code Capital Following On

◽ ErGeng Closes 100 Million Yuan Series B+ as Source Code Capital Backs Short-Video Leader

◽ Juli Xinfang Closes $10 Million Series B with Existing Investor Source Code Capital Increasing Stake

◽ Huishoubao Closes Industry's Largest Series B of 300 Million Yuan with Existing Shareholder Source Code Capital's Continued Support

◽ Suishou Technology Announces $200 Million Series C with Existing Shareholder Source Code Capital Increasing Stake

◽ Source Code Capital Portfolio Company Qudian Successfully Lists on NYSE

◽ Zhangshang Fucai Raises 20 Million Yuan Angel Round from Source Code Capital and Buhuo Ventures

Ma Hui Chronicle

◽ 2 Overseas Financing/Acquisitions, 6 Strategic Upgrades, 7 Companies Win Multiple Awards

◽ 3 Additional Fundings, 1 NYSE IPO, 6 B2B Companies Win Multiple Awards

◽ 4 Global Unicorns Make the List, 1 Files Application, 2 Raise Additional Funding

◽ Ma Hui Ecosystem August: Financing, Upgrades, and Honors

Ma Hui Perspectives

A few months ago, we proposed "Nine Faces of Technological Innovation": the Hype Cycle, Three Overlapping Waves, Seven Dragon Balls, the Long Ice Age, Over-Reproduction, Super-Species, Big and Small, Fast and Slow, Long and Short — an attempt to sketch the magnificent information revolution now underway. Indeed, at this stage, breaking through in information technology-related entrepreneurship is becoming more difficult, and by extension, so is the investor's task of judgment. This requires long-term patience. Speed doesn't matter — faster or slower is fine. What matters most is endurance, authenticity, and scale. We must resiliently wait out the long ice age, filter out the dizziness brought by halos, check whether all seven dragon balls have arrived, usher in the Cambrian explosion of species, separate truth from falsehood, and ultimately nurture a new generation of "super-species" to build a new ecological balance and create lasting, real value.

◽ Yi Cao, "The Nine Faces of Technological Innovation"

2017 Ma Hui Annual Meeting

◽ Yiming Zhang, "The Arrogance of Rationality That CEOs Must Avoid"

◽ Huiwen Wang, "Do the Right Thing — the Payoff Cycle Is Shorter Than You Think"

◽ Jingbo Wang, "Deep Operations Are What Make Financial Licenses Matter"

◽ Qi Chen, "The Difference Between a Mule and a Unicorn Is Focus"

◽ Zhi Qin, "The Things Only Entrepreneurs Can Teach Themselves"

◽ Hongjiang Zhang, "The Essence and Opportunity of AI"

◽ Yu Zheng, "AI Applications in Urban Management and Business"

◽ Enmin Lin, Chaocheng Wang, Ke Jiao, and Weixin Huang, "The Pits We Fell Into in Three Years of Entrepreneurship"

Source Code Insider

◽ Kaishi Chang, "Under 'New Retail,' Where Are Offline Stores Headed?"

◽ Yiwen Hao, "Profile of a 'Reliable' AI Startup"

◽ Xingshi Wang, "Targeting Unicorns in the Consumer Upgrade Wave"

◽ Di Yuan, "Going Mobile Global: Entrepreneurs Should Watch for Big Opportunities in Content Products"

◽ Di Wu, Convenience Stores: Under the New Retail Wave, What's Next for China's 7-Eleven?

◽ Xiaoliang Wang, The Pitfalls of Tech Prophecy

◽ Yuemei Lv, Industrial Internet Investment Landscape

◽ Xingchen Zhang, Opportunities in New Finance from an Asset Management Perspective

◽ Tong Sun, Four Dimensions to Position Insurtech Innovation Opportunities

The Source Code Team

This has also been an important year for our organizational growth. Our team has grown to over forty people, and we need to focus even more on how to help every promising member grow faster than industry norms. We need to build a strong growth framework, optimizing our collective learning algorithm and improving the effectiveness of how each individual deploys their own algorithm and computing power to achieve excellent learning outcomes. Long-tenured members have also played a valuable role in passing down methodology and values. This is something we will continue to explore and advance. On the partnership front, following Dr. Hongjiang Zhang's joining as Venture Partner in late 2016 after serving as Kingsoft CEO, we welcomed another partner this year: Yungang Huang. Yungang brings qualities that align closely with what the Source Code team pursues — the ability to hold a steady stance, resilience, a drive for truth and victory and longevity, closeness to entrepreneurs, and deep research and thinking.

Dr. Hongjiang Zhang

Venture Partner, Source Code Capital

Former CTO of Microsoft Asia-Pacific R&D Group, President of Microsoft Asia Engineering Institute, and CEO of Kingsoft Software. Joined Source Code Capital as Venture Partner.

Dr. Hongjiang Zhang is a world-class scientist in multimedia research and the "founding father" of computer video retrieval research. He has received major awards from both IEEE (Institute of Electrical and Electronics Engineers) and ACM (Association for Computing Machinery) — the two leading computer science professional associations — making him the first and, to date, only Chinese scientist to be honored by both.

Mr. Yungang Huang

Partner, Source Code Capital

Yungang Huang was previously Managing Director at Matrix Partners China, focusing on investments in mobile internet, marketplace platforms, enterprise services, and online education. He led investments in outstanding projects including Didi Kuaidi, Liepin, Baoxianshi, oTMS, IN, Niangao Mama, and More Tickets. He is a seasoned expert in corporate strategy, organizational structure, talent recruitment, market planning, and company financing. Yungang Huang graduated from Zhejiang University with one of the nation's first master's degrees in entrepreneurship management and a bachelor's degree in management.

40+

team members organized across investment, portfolio support, and platform functions.

We pursue self-drive, truth-seeking, openness, curiosity, and excellence.

We hope to be not merely a "third-generation fund" in the chronological sense, but a generation that is genuinely innovative and characteristic of its era. As members of this new generation, we deeply feel how challenging it is to produce results and distinctive features amid so many accomplished predecessors. But it's the challenge that makes it interesting. As investors of this generation, we must continuously drive ourselves, leveraging the right timing, place, and people while honing our physical, intellectual, and mental strength to achieve better value discovery and value creation. This is the ultimate respect for resources and boundless love for the future world.

Source Code Capital

Creating Lasting, Real Value

WeChat ID: sourcecodecapital

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