Wang Tianshi Of Hongyi Venture Capital: How Can The Brand Of "Wanghong" Last Forever?

As a fund focusing on early venture capital projects under Hony investment, a veteran investment management organization, Hony venture capital has not been established for a long time. It officially announced the completion of the initial $130 million fund raising in November 2020. However, in the field of consumption, Hony has made great achievements.

From the perfect diary of domestic beauty brand, fresh e-commerce platform dingdong shopping to pet products company Weishi Chongxing Hony venture capital is capturing a series of star projects closely related to the life of new consumers.

"Digital consumption is our most important investment track, and the projects invested can account for 70% of the total investment portfolio of Hony venture capital." Recently, Wang Tianshi, managing partner of Hony venture capital, said in an exclusive interview with the 21st century economic report.

In Wang Tianshi's view, based on the in-depth understanding of the consumer segmentation industry, the team can lock in some high-quality projects in the embryonic stage in advance. At the same time, the diversified support that Hony platform can bring to the invested projects is also a core advantage of Hony venture capital.

Focus on two variables: new population and new channel

It is understood that Hony venture capital mainly focuses on the investment layout in the field of digital consumption. At the same time, the team is also exploring the investment in tob science and technology field with the main line of industrial digitization.

Specifically in the field of digital consumption, Hony venture capital focuses on two major investment themes: Digital driven consumer brands and new retail and digital content driven vertical platforms. Under the theme of consumer brand and new retail, Hony mainly focuses on the investment opportunities under the two variables of consumer intergenerational change and consumer goods channel change.

Wang Tianshi told reporters, first of all, from the perspective of consumer groups, the needs of the new generation of generation Z and the new middle class are changing. Later, they said that they paid more attention to the individuation of consumer brands, the spiritual and cultural core of product delivery, and had a strong sense of national confidence. When they become the mainstream consumer groups, it brings development opportunities to the new generation of brands, and more national tide brands also rise accordingly. For the new middle class, their pursuit of product quality and convenience brings investment opportunities for consumption upgrading.

Second, changes in consumption channels also bring new investment opportunities. From the original offline channel to the integration of online and offline channels, from the traditional more centralized e-commerce platform to the decentralized social media platform, the way in which consumer brands reach users is changing. Those new brands that actively embrace change and master new ways of playing can establish trust and interaction with consumers more quickly, and are easier to realize development and expansion.

When looking for investment targets, Hony focuses on whether the entrepreneurial team is good at seizing the opportunities of consumers and consumption channels when building new brands. From the perspective of industry segmentation, Hony venture capital pays more attention to beauty, food and beverage, and lifestyle segments such as pets and fitness.

How to keep the brand of Internet popular? Establishing three standards for project evaluation

In the face of various online brands emerging in the field of consumption, the early investment risk mainly lies in how to judge the sustainability of online brand and whether it can really grow into an evergreen brand.

Wang Tianshi told reporters that Hony venture capital has three main criteria for judging this. The first is the team's product strength, that is, whether the brand can insight into the needs of consumers and create products centered on consumers. "This is very important. We can accurately understand the needs of consumers and bring good products that meet the needs or even exceed the expectations." He said.

Second, whether the brand can seize the changes and opportunities of new channels, whether the network sense is strong enough, and whether it has enough sensitivity to social media and traffic. Third, whether the team has high latitude trading layout ability. When the scale is bigger and bigger, whether it can expand from online to offline channels, and build a sustained and efficient organization.

"In addition, we also hope that the founders have lofty goals and patterns. Some brands are also evergreen brands, but relatively small and beautiful. For investors, we still hope to invest in head brands with certain scale and influence. " He said.

In terms of financial indicators, Wang Tianshi said that he would pay attention to the company's income growth rate and the use efficiency of funds. He also stressed that financial indicators are not the core indicators for early projects. Investment still needs to look forward, looking for projects with high growth and high potential.

In terms of corporate valuation, new consumer companies are also different from traditional consumer companies. The 21st century economic reporter has noticed that many new consumer start-ups are difficult to make profits in the early stage, so it is difficult to carry out valuation through the traditional PE multiple. In the market, we use the market sales rate (PS) as the base and multiply the sales revenue to carry out the valuation.

We have successively invested in top enterprises such as perfect diary and dingdong buying vegetables

Perfect diary is the maiden work invested by Hongyi venture capital led by Wang Tianshi. In 2017, Hongyi became the leading investor of round a of perfect diary, but the perfect diary at that time was not widely known. As the second largest institutional investor of perfect diary, Hony has witnessed its rapid rise along the way. Until last November, the parent company of perfect diary, Yixian e-commerce, was listed on the New York Stock Exchange.

After the perfect diary, Hony venture capital invested in ximuyuan in 2020 to continue to increase the beauty field. In Wang Tianshi's opinion, the founders of the two companies are both experienced in international big brands and have entrepreneurial experience. At the same time, they all take the consumer as the center to create products, which can bring high cost performance and surprise products to consumers.

For example, the main brand of perfect diary is popular color makeup positioning, so that more people can buy high-quality products within the acceptable price range. Ximuyuan is to meet the skin care needs of women under the background of consumption upgrading, and launch different product lines for different skin types.

In addition to its continuous investment in the field of beauty, Hony venture capital is also an early investor in dingdong, a leading fresh e-commerce enterprise. On April 6, dingdong Meicai just announced the completion of the d-round financing of US $700 million, and newly introduced investors such as DST global, coatue, ASPEX management and 3W fund. A large number of foreign venture capital, together with rumors of going to the United States at the beginning of the year, make people speculate that this may be the last round of financing before its listing.

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