Interview With China And The US Green Fund Investment Partner Kaida: China Has Invested 17 Projects In China.

Contributing author Zhu Lina Singapore Report

"The first round of financing of our second funds is coming to an end. The first fund has completed 80% of its investment. The two funds are basically the same, but the second funds will focus more on agricultural and food investments. " Keita, partner of Sino US green fund investment, said in an exclusive interview with the economic news reporter twenty-first Century.

In November 26, 2016, the Sino US Green Fund was established. The main investment areas of the fund include green energy and energy conservation, green manufacturing and environmental protection, green consumption and services, green travel and logistics. It is reported that its first fund completed fundraising at the beginning of this year, amounting to 3 billion 700 million yuan, while the scale of the second funds will be larger. According to Kaida, the fund mainly carries out large-scale mergers and acquisitions for some of China's mature companies in the form of private equity funds, usually having a larger share of equity and venture capital investments in some European and American development projects.

Kaida said that in the investment process of the first fund, China has gradually found many opportunities in agricultural food science and technology. "The market demand in this area is huge, so we will bring advanced technology in Europe and the United States to China." According to his introduction, the Sino US fund has invested 17 projects in China.

He told reporters that at present, the fund's investment in China's individual projects is about 50 million yuan, while the investment amount in the US growth period is about 15 million to 30 million dollars. "We mainly invest in some later projects, which is equivalent to the traditional C round's syndicated investment. We have visited some unicorns, but as a fund driven by financial returns, the market has overestimated the number of so-called unicorns and overestimated the investment return.

Previously, Kaida was the managing director and chief scientist of Khosla Ventures, a leading green development technology Vc firm in the United States, chief scientist and head of Biotechnology Department of the US large group Cargill (Inc.), and professor of Wisconsin Madison University in the United States.

Three factors for screening projects

In recent years, the field of agricultural food is favored by venture capital. Data show that in 2018, the total amount of financing for Chinese agricultural and food start-ups reached US $5 billion 800 million, and the number of transactions reached 283. Compared with 2017, the amount of financing increased by 222% over the same period last year, and the number of transactions increased by 60%.

Kaida admits: "when screening investment projects, we mainly consider three factors: first, whether it is environmentally friendly to China; two, is this a stage of development? We are unwilling to accept technological risks. On the contrary, we are more willing to take risks. Three, can the company benefit from the network we build in China to achieve synergy? "

At present, the Sino US green fund investment in the agricultural food industry mainly focuses on three major areas: "food safety, healthy food upgrading, helping agriculture achieve environmental sustainability, urbanization opportunities such as indoor farms, and reducing the demand for agricultural labor." He said.

He noted that the Sino US Green Fund has invested two projects in agriculture related fields, including the first "unicorn" Huitong of 70 million yuan invested in China's rural electricity business. As of June 2018, Huitong's network covered 19 provinces and 16 thousand and 400 townships in China, and developed and served 9.2 000 Township and township member stores.

At the same time, China's two Internet giants are involved in agricultural food investment, and Ali capital has invested in happy fruits, delicious food, 1919.cn and other enterprises. The Tencent has invested in the tea, daily delicious and city life.

"Compared with the investment institutions in Europe and America, China's investment companies are more flexible and diversified, and the Sino US green fund is relatively flexible. In addition to the main fund, we also set up a special purpose fund, because some investors are not willing to invest in the Blind Pool. "When the private equity fund is raised, the underlying assets have not yet been determined, and the fund investors have blind areas for the underlying assets of the fund to invest in the future." they hope to have more control over the investment projects. He said.

Foreign enterprises value China's agricultural food market

Talking about investment in the field of agricultural food, Kaida laughs: "over the past three hundred years, we have expressed great interest in the Chinese market, and understand that China is a huge and very important market, but most of them are worried about China's regulatory policies and intellectual property rights protection. So we set up a joint venture with an agri food consulting company in Beijing to help these enterprises enter the Chinese market.

He revealed that he had been accompanied by a company producing animal feed in Europe and America for about two weeks. "I accompanied them to visit the major Chinese enterprises in related industries, understand the development of the industry, communicate with relevant experts, and have achieved great results."

In the context of the escalation of Global trade frictions, Kaida admits: "the situation will undoubtedly become more complicated. Despite differences between China and the United States, the agro food environment may be one of the areas where both sides can cooperate."

He believes that China has surpassed the United States to become the world's largest investment in agricultural research a few years ago. "China has great strength in the whole industrial biotechnology. At present, most of the US agricultural food start-ups are in the early stage. After four or five years of establishment, we are constantly aware of the progress of Chinese companies in different fields, and some companies have already been at the leading level in some fields in the world."