ZhenFund Partner Yuan Liu: One Week with Manus, Ten Years with Red

His investment in Red and Manus has made Liu Yuan one of the most sought-after investors in Chinese tech. But for the longest time, this ZhenFund partner agonized over not having "a single thunderbolt of a deal to his name." When gathering with friends, he would even joke at his own expense: "My friends always mock me — what makes you think you deserve to be a partner?"

Though he would sometimes explain that promotions at ZhenFund are strictly numbers-driven, the truth is more fragile: some companies he once backed had soared, only to fizzle out.

Writing about Liu Yuan was a long-delayed plan. At first, I wanted to wait for Momenta — an early bet of his — to go public. Then I said I'd wait until his tenth anniversary at ZhenFund. But timing shifted, or he himself got cold feet. Until Manus. Then he worried again: would this be champagne popped at halftime?

Many who know Liu Yuan well describe him as romantic, kind, and sentimental. Yet this has been an unusually emotional year even for him.

When he saw media retrospectives on how Manus's three co-founders each connected with ZhenFund, it was as if he could see his own repeatedly practiced people-judging techniques gradually imprinted with the shadow of Bob Xu's years of mentorship. He cried.

When Manus first launched, he accompanied Red to meet investors, nominally there to help with translation. The other side asked its first question — "How did your story begin?" — and he cried.

Looking back at letters he'd written to Bob Xu over the years, seeing those words of unfulfilled ambition, of feeling he'd failed his mentor, he cried again.

A rough count of Liu Yuan's notes shows 16 instances of "cry," but also — 43 of "hahaha."

We've distilled ten stories from this conversation. For more, listen to the full audio on the Xiaoyuzhou app. You'll find the full arc of the Manus story, Liu Yuan and Red's nearly decade-long journey, and an inner world that few investors would ever lay bare.

The Sensation of Growing Up Overnight

Regarding that controversial Manus product launch video, Manus co-founder Zhang Tao recently addressed its origins for the first time at a ZhenFund-Tsinghua University event, during a conversation with ZhenFund managing partner Yusen Dai titled "Zhang Tao Responds to Controversy for the First Time: Why Hasn't Manus Been Replaced?."

On the morning of March 6, at the height of the video's viral spread, Liu Yuan was sleeping in. When he woke, the bottom of his WeChat no longer showed a number — it had become three red dots, signaling the sheer volume of messages.

This detail is telling: even as Manus's closest investor, he had no expectation of what was coming. He'd experienced similar moments before, though most products merely generated buzz within tech circles.

Many fixated on whether PR fees were spent, whether invite codes were manufactured scarcity. These miss the point. What perhaps matters more: whether Manus consciously positioned itself to catch the tailwinds of DeepSeek's traffic and user sentiment.

Liu Yuan says that if people call you the second DeepSeek, you might demur modestly, but you'd certainly be pleased inside — though you'd hardly ask them to take down their posts.

At the time, a wave of articles emerged with headlines like "Silicon Valley Sleepless All Night!" "AI Earth-Shattering Change!" "OpenAI Is Really Panicking!" As someone sensitive to language, Liu Yuan says he found them hilarious, and screenshot many to send to Red.

But emotions compounded, and Manus was quickly branded as overhyped. In Liu Yuan's view, Manus enjoyed three days of glory, followed by prolonged vilification. Yet for a long time, from Red to the broader Manus team, no one explained anything publicly.

Even Liu Yuan, normally prolific on social media, was unusually silent. At one point, he felt that sensation of growing up overnight, suddenly understanding why so many industry veterans choose silence.

It was a calculation of all costs and benefits: not explaining might be the best explanation of all.

Decades Like a Week, a Week Like Decades

Hearing Liu Yuan tell the Manus story feels like watching film frames unspool one by one.

When ZhenFund stood shoulder-to-shoulder with the Manus team, ZhenFund colleagues — Liu Yuan included — wore freshly made Manus T-shirts underneath Patagonia jackets emblazoned with the ZhenFund logo. Liu Yuan posted on Jike: "How can you say we have no clothes? We share our robes."

ZhenFund investors stationed at the Manus office did work seemingly no different from interns: emailing Silicon Valley figures one by one, inviting them to try this product built by a Chinese team. During this period, Anna Fang would bring barbecue and beer to the office.

Days later, Silicon Valley truly woke up. Twitter founder Jack Dorsey retweeted. Stripe founder Patrick Collison retweeted. YC CEO Garry Tan retweeted. Someone in the Manus office shouted and then cried.

Liu Yuan says that for Manus, this felt like the clearing of a false accusation.

Facing Red in battle mode, Liu Yuan specially gifted him a Churchill poster, purchased at Churchill's wartime command room in Britain. Red excitedly ran around the office taking photos with colleagues.

Liu Yuan began investing in 2011; in 2014, he joined ZhenFund as an angel investor.

ZhenFund managing partner Yusen Dai told him that this week was like Lenin's line: "There are decades where nothing happens, and then there are weeks when decades happen."

Liu Yuan (left) and Red (right)

All Fairy Tales Have Endings

One early morning, in a taxi home from Manus, Liu Yuan opened WeChat and messaged ZhenFund founding partner Anna Fang, recounting his years-long story with Red.

Liu Yuan's nearly ten years of investing in Red is only slightly shorter than his entire tenure at ZhenFund and as a partner. In one moment, Anna Fang suddenly looked at Liu Yuan and said: Good stories all end, you know that, right?

All companies die, just as all people die. This is, of course, understood by everyone. But Liu Yuan, still full of joy at that moment, hadn't yet thought of what would follow.

At ZhenFund, Anna Fang is affectionately called "Zhen Mom." Compared to Bob Xu's romanticism, she was the one who once insisted on distilling people-judging into XX rules. But in this moment, she too grew sentimental.

Or perhaps simply because she had experienced more company rise and fall than Liu Yuan. And understood better that all fairy tales have endings.

The Secret Behind Every Name

As a founder, Red imbues every company name with meaning.

The original Nightingale Technology. The nightingale comes from Wilde's "The Nightingale and the Rose," because in the fairy tale the nightingale is a helper, and what Red wanted to build then was a good tool that helped everyone.

Later, Monica. Red was building a browser extension, and many shortcut keys in browsers were already taken — M wasn't. He wanted a person's name, and thought of "Monica" — easy to say, easy to write. The name was long assumed to reference Monica from Friends; it doesn't.

The Manus naming had even more deliberation. The team initially had several candidates. Red's personal favorite was Dodo — catchy, cute, an animal image. But Anna Fang rejected it: beyond the dodo being extinct, "dodo" is sometimes used in English to call someone foolish. Another option: Vida, with roots in vitality.

But ultimately, they voted for Manus. A Latin word meaning "hand."

The dinner where Peak (Ji Yichao) decided to join

What Beats Carry in Investing

Liu Yuan and Red share too many similarities. Similar linguistic habits: both love using tildes or exclamation marks on WeChat. As men, they lean closer to cute than rugged. They'll exchange knowing smiles at references others miss.

Moreover, Liu Yuan is from Wuhan, and Red is among the rare founders rooted there. So every time Liu Yuan returns home, they meet — meaning Red knows nearly all of Liu Yuan's family, even his grandfather and uncle, with whom he's shared baijiu and crayfish during holidays.

Liu Yuan has witnessed all of Red's most狼狈 moments. The time he was quite overweight. The time he nearly fell into depression. The time he was repeatedly rejected in fundraising.

Unlike many investors merely aiming for tomorrow, Liu Yuan is an archaeology enthusiast. He loses himself in past events, even those unrelated to him. So one can imagine how much he now savors recalling these stories with Red.

For some investors, this may be more alluring than carry itself.

Tears at Wujiaochang

Once, after meeting with a top-tier VC he'd pinned high hopes on, Red was rejected yet again. On the sidewalk at Wujiaochang, he cried.

A colleague who'd accompanied him suddenly ran over saying: Stop crying, stop crying. Red thought the funding situation had turned. Instead the colleague said: Two clients are here.

Years later, Red told Liu Yuan this story as a joke.

This was merely one slice of Red's repeated fundraising failures. Liu Yuan says he roughly counted: over the years, he'd created 130+ investor group chats for Red.

Frequently accompanying Red through fundraising also gave him more perspective on the investment industry itself.

He couldn't understand, for instance, why one investor balked at a $45 million valuation, insisting on $42 million — was that really a meaningful difference?

He couldn't understand why one investor, after hearing Red's pitch, suggested he research an AI product called Doubao — then, after Manus blew up, could blast ten WeChat calls to Red in short order, repeatedly asking: "Boss Red, you there?"

He also couldn't understand: investors who theoretically should have critical thinking, why was their herd mentality so powerful, why did so many live within consensus?

A belated celebration for Nightingale Technology's acquisition, opening a bottle of champagne —

actually Liu Yuan and Red discussing a new startup

Literary Moments in Investing

Talking with Liu Yuan often brings to mind a book — Reading Destroyed Me, by ZhenFund co-founder Wang Qiang. So it's no surprise that words others might find inconsequential hold fatal attraction for Liu Yuan.

A peer had us ask him: when evaluating an early-stage founder, what signals and details do you particularly watch for? Liu Yuan's first thought: their choice of words.

He dislikes, for instance, when people call companies "projects" — it sounds temporary, perishable. He's even researched how some US VCs internally ban words like "deal" or "exit"; Benchmark Capital partners use words like "oceanic" or "ossification" to describe founders and companies.

He thought this was a niche interest, until he once visited Sequoia Capital's website. He noticed Sequoia consistently emphasizes how much they care about which vocabulary they use to express their values. At that moment, he wanted to tell those who dismiss language: "Look, the masters do this too!"

That night at Alahouse

One Fable and Countless Others

When discussing with Liu Yuan how to identify people who don't follow conventions, he recalled a story Bob Xu once told him.

It goes: there's a national parrot competition, every parrot trying to mimic all kinds of human voices. But do you know what the first-place parrot said? It said: My god, so many parrots here!

It's a fable-like story: when a parrot utters these words, it ceases to be a parrot.

Liu Yuan remembers Bob Xu telling him this story by voice message; he even remembers how Xu imitated parrot speech.

In Liu Yuan's accounts of Bob Xu, Anna Fang, Yusen Dai and others, there are always countless such small stories. It's hard to imagine such stories emerging from any other fund.

And hard to imagine, at most other funds, someone like Liu Yuan rising from investment manager to partner.

The Subtle Threads of History

We recorded video with Liu Yuan at a bar in Central Park, a residential complex in Beijing's CBD.

One reason for choosing this spot: in China's investment industry, this complex near Beijing's Guomao area carries landmark significance. It once housed large numbers of young investors — especially during the heyday of dollar funds.

As the industry rose and fell, property values here dropped considerably; many gradually moved away.

But by coincidence, in 2023, when Red decided to start Monica and discussed funding with Liu Yuan, it was at this very bar.

Even more coincidentally, the seat where Liu Yuan sat recording with us was the same seat he'd occupied that night.

To Teacher Xu, Also to Myself

Before Manus, Liu Yuan was often asked by some: what's your representative deal?

In 2022, after visiting the then-retired Bob Xu, Liu Yuan wrote the following on the flight home, with some wine and tears:

"These years I've felt increasingly ashamed. In eight years, I've failed to present a proud work that would let you introduce me with concise, thunderous words. This shame, in fact, may have peaked at the very moment I was promoted to partner.

Since coming to ZhenFund, I've grown under the near-partial sunlight and rain of Teacher Xu and Anna. If I achieve anything, it's a complete closed loop of a gratitude-for-recognition story. If I achieve nothing, my role at ZhenFund is that of a favored eunuch in the palace.

This pain is understood only by my closest friends. May I still find opportunities to go against the current and spur my horse faster in days to come, and hope to bring you some surprises."

This episode's audio is also available on ZhenFund's podcast "Seriously Speaking" — welcome to listen!