Behind the 300 million yuan investment of CATL, there is a high-profile attack on the hard technology track.
On the one hand, it is a new energy leader with a trillion market value, and on the other hand, it is the PE with the largest management scale in China. This marriage of power has naturally attracted great attention.
On July 27, 2021, CATL announced that it will contribute 300 million yuan to Hillhouse Yurun Equity Investment Fund Partnership (Limited Partnership) (hereinafter referred to as Hillhouse Yurun Fund), a fund of Hillhouse.
On the one hand, it is a new energy leader with a trillion market value, and on the other hand, it is the PE with the largest management scale in China. This marriage of power has naturally attracted great attention. For the Ningde era, this means a further expansion of the investment landscape. For Hillhouse, after working as a “fixed-increasing harvester” for a year, it began to turn these industry giants into LPs, which is a further upgrade of the ecosystem.
Ningde era chooses GP and only invests in acquaintances
There are two parts, let’s talk about the Ningde era first.
This investment in Hillhouse Yurun Fund is not the first time to be an LP in the Ningde era, nor is it the largest amount of investment. Since its listing, CATL has participated in the establishment of five equity investment funds (including Hillhouse Yurun), with a total investment of 2.249 billion yuan. These funds have all been established within the last six months.
Spending 2.249 billion yuan in half a year is certainly not a big deal for the Ningde era with a trillion market capitalization. However, considering that the net profit of CATL for the whole year of 2020 is only 5.58 billion yuan, CATL is equivalent to spending half a year of net profit as LP, and the effort is not small.
CATL’s cooperation funds include not only head institutions, professional institutions for new energy tracks, but also industrial funds that cooperate with automakers. The layout is quite comprehensive. At the stage, PE funds are the main ones, all of which are larger in scale. The smallest Shandong Green Development Equity Investment Fund Partnership (Limited Partnership) also has a scale of 1.45 billion yuan. The late investment stage means that the strategic value of the investment project is greater, and it is more conducive to synergy with the business of the Ningde era. It can be seen that in the Ningde era, LP is not just for fun, but a systematic investment, and the purpose is still to serve the main business.
The choice of GP in the Ningde era depends very much on the “relationship.” All GPs selected have a close relationship with the Ningde era. Hillhouse is the largest investor in Ningde era’s 19.7 billion fixed increase in 2020, and one family has a 10.6 billion share. This time, the Ningde era, in turn, contributed capital to Hillhouse’s fund. Some people ridiculed that it was ” Tizyun Zong “, but 10.6 billion was exchanged for 300 million, fearing that it would be impossible to “vertical”.
For the other GPs on the list, Chendao Capital is also an old friend of the Ningde era. As early as 2018, Ningde Times had cooperated with Tianhua Ultra-Clean, Chendao Capital, Tianyuan Group and other companies to establish Yibin Tianyi Lithium. industry Branch Co., Ltd., to invest in battery grade lithium hydroxide production line. Not to mention SAIC Hengxu, which is a related investment platform of SAIC Group . SAIC is not only a customer of CATL, but also an investor of CATL for 2020. Both Boyu Capital and CICC Capital were pre-IPO investors of CATL.
It can be seen that for GP, it is very difficult to get the capital of the Ningde era, and the GP circle around the Ningde era has basically been closed.
In addition to being a financial investor, CATL is also testing the waters to be a GP by itself. In the fund of Fujian Times Mindong New Energy Industry Equity Investment Partnership (Limited Partnership), Ningbo Meishan Bonded Port Area Winning Investment Co., Ltd., a wholly-owned subsidiary of CATL, also served as one of the dual GPs and participated in the formation of the investment committee. As we all know, as an industrial giant, CATL has always attached great importance to this leg of investment. Prior to this, the investment of 19 billion yuan of its own funds has caused huge controversy. In the future, it will not be surprising that CATL will obtain private equity manager licenses through subsidiaries, issue VC or PE funds, and leverage external funds for industrial chain layout.
Hillhouse’s “banknote ability” enters hard technology
For Hillhouse, the funding of the Ningde era also has strategic significance. Behind the 300 million yuan investment of CATL, there is a high-profile attack on the hard technology track.
In the fields of TMT and consumption, Hillhouse has established a high reputation through Tencent , JD.com and other cases. After Belle’s battle, Hillhouse’s technological empowerment has been known to everyone. But in the hard technology track, Hillhouse is not an old player. Zhang Lei said that semiconductor, new energy and other race tracks have ushered in a historic window period. To seize this window period, Hillhouse needs to establish its own hard technology ecosystem in a very short period of time, and it is the best way to bind an industry leader like the Ningde era.
The Hillhouse Yurun Fund to be established this time mainly invests in cutting-edge technology, chips, semiconductors, solar energy, batteries, smart driving, AI technology, smart terminals and other high-tech industries. Querying CVSource’s investment data shows that this is Hillhouse’s first fund specifically designed to invest in hard technology. The war on the hard technology track will undoubtedly escalate again. The duration of Hillhouse Yurun Fund is as long as ten years, which means that the investment stage can be extended to before the A round, and early investment is no longer a safe haven for small and medium-sized institutions. The target scale is 3.5 billion yuan, which can be expanded to 6 billion yuan, and the scale is also top-level in the hard technology track.
Hillhouse came from behind on the hard technology track and vividly explained that the “money capability” is indeed useful.
In July 2020, 10.6 billion yuan will participate in the fixed increase of CATL; in December 2020, 15.8 billion yuan will be invested in Longji shares; in February 2021, 200 million US dollars will be used to participate in BYD ’s fixed increase… after the dazzling fixed increase , Hillhouse has fully deployed these largest industry leaders in China within one year. While everyone was still arguing about whether Hillhouse was taking over from a high position, Hillhouse announced that it would invest 100 VC projects a year, 80 of which are hard technology.
In just over a year, Hillhouse not only squeezed onto the ship of hard technology, but also grabbed the right to formulate the rules of the game for hard technology investment.
Both small and medium-sized institutions and established institutions can feel the pressure brought by Hillhouse. When colleagues talked about hills, most of them could only sigh helplessly. An investor who has watched hard technology for nearly ten years sighed to China Investment.com. In the past, for projects with relatively high valuations, the institutions that led the investment generally hope to find more peers to invest together , but Hillhouse often does not look at the valuation. Value and share are all required. This makes ordinary organizations even have no chance to get on the car, and they are completely reduced to an “atmosphere group.”
Under the height of the hills, is it to follow or not to follow? How to follow? It has become a problem that other institutions must face.
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