Source Code Capital Closes $1 Billion New Fund Raise

源码资本源码资本··0·0

Be the investment firm with the most entrepreneurial spirit

Source Code Capital announced the completion of a $1 billion new fund raise. With this new fund, Source Code Capital's total assets under management reached $2.5 billion and RMB 8.8 billion. The fund raise received support from both existing and new investors, with existing LPs committing 100% additional capital, and multiple global professional investment institutions partnering with Source Code Capital.

Yi Cao, founding partner of Source Code Capital, said: "We are deeply grateful for the trust and support from top global institutional investors in the Source Code team. We will continue to work alongside resilient, bold entrepreneurs with great visions, using the combined power of capital and technology to change the world. We strive to be the most entrepreneur-centric investment institution, delivering sustained outperformance for our investors."

Li Yile, Head of USD Investor Relations at Source Code Capital, said: "During the fundraising process, professional institutional investors highly recognized Source Code's institutionalized organizational structure, unique Ma Hui ecosystem, deep research-driven investment logic, and the efficient coordination between our special forces teams and arsenal of resources. Despite significant oversubscription for our new fund, Source Code maintained its fundraising principles and kept the fund size at an appropriate scale."

As of 2021, two Source Code Capital portfolio companies had reached valuations above $100 billion, three exceeded $10 billion, over 20 surpassed $1 billion, eight completed IPOs, and returns to investors exceeded RMB 20 billion.

Early-Stage and Growth-Stage in Parallel

Following the new fund raise, Source Code Capital will continue to follow its "Three Horizontals, Nine Verticals" investment map to identify outstanding entrepreneurs in early and growth stages across "Internet+," "Intelligence+," and "Global+" sectors. It will continue deepening investments in To B areas such as intelligent manufacturing, robotics, and enterprise services, as well as To C areas including new consumer content and platform channels.

For early-stage investments, Source Code Capital believes the focus should be on "non-consensus" areas — "the periphery today, the main channel tomorrow." In growth-stage investing, Source Code Capital's "qualitative transformation" investment logic has also gained wide recognition. Through the professional division of labor and organic collaboration between early-stage and growth-stage teams, portfolio companies at different stages receive more board-level and strategic support, enabling continuous multi-round investment in outstanding entrepreneurs and sustained assistance.

The collaboration between early-stage and growth-stage teams is evident across numerous portfolio companies. For To B enterprises, these include Baibu, Xiaoyaoyao, Yijiupi, CassTime, YQN Logistics, ZNLH, Edianyun, HAI ROBOTICS, Mech-Mind, and Gaoding Design. For To C enterprises, these include ByteDance, Meituan (3690.HK), Li Auto (NASDAQ: LI), KE Holdings (NYSE: BEKE), RELX (NYSE: RLX), Ziroom, Cloud Whale, Pagoda, Blokees, ChaYanYueSe, and WANGBAOBAO. Many of these companies received continuous follow-on investment from the early stage, supporting their development through growth and beyond. Others were identified through long-term deep research and understanding, with investment at the growth stage to accompany them through their "qualitative transformation."

"Special Forces" and "Arsenal"

From 2014 to 2021, Source Code Capital's team grew from fewer than 10 people to over 80, including 6 partners, forming an "institutionalized" organization with a "special forces" and "arsenal" front-middle-back office model. In investment, the early-stage and growth-stage teams comprise 3 partners — Yi Cao, Yungang Huang, and Xingshi Wang — plus over 30 investors forming "special forces" that continuously back outstanding entrepreneurs at different stages. In post-investment and platform services, professionals with different expertise have built an "arsenal" around "strategy, growth, organization, and resources" to serve entrepreneurs and investment teams at different stages.

In 2020, under the construction philosophy of "systematization" and "productization," the post-investment team completed 759 post-investment actions for early-stage and growth-stage portfolio companies, developed 28 fully productized post-investment services, and refined a "Four Horizontals, Four Verticals" post-investment service system. In talent recruitment, the team helped companies upgrade their talent, directly recruiting key positions such as COO, CFO, and CHO for companies in need. In policy research, the team provided companies with over 1,000 regulatory and policy leads. In growth development, the team connected new consumer companies with key resources on major traffic platforms including Douyin, Bilibili, and Xiaohongshu. In capital matching, the team facilitated over $1 billion in equity financing and RMB 1 billion in debt financing for over 20 companies.

Source Code Capital has established a distinctive industry super-connector called "Ma Hui." As entrepreneurs at different stages and various types of LPs continue to join, connections, collaboration, and knowledge-sharing among Ma Hui members remain highly active. For example, members promote cooperation through the "Ma Hui Preferred Package" product, and regularly engage in collective learning and cognitive enhancement through the "Code Brain" product.

Yi Cao said: "Aligning with outstanding entrepreneurs is the foundation of our success and the primary driving force behind Source Code's organizational growth. Thinking like entrepreneurs, acting like entrepreneurs, and standing shoulder-to-shoulder with entrepreneurs through difficult times. We thank all entrepreneurs and investors for their trust and support, and we are fully committed to being the most entrepreneur-centric investment institution!"