April 8, 2019
Today, Source Code Capital has announced the closing of a new $570 million fundraise to make early- and venture growth-stage investments in China’s “New Economy” businesses. With the completion of this successful fundraising, the total funds under management at Source Code Capital have now reached a new high, at USD $1.5 billion and RMB 3.5 billion.
In the past five years, six funds (three USD funds and three RMB funds) have been managed by Source Code Capital, and all have achieved top-tier IRR and DPI versus benchmarks in the same vintage. Of note, 10+ Source Code Capital portfolio companies have grown into unicorns, some of them even achieving super-unicorn status.
Source Code Capital was established in the Spring of 2014. For the past five years, it has dedicated itself to strive to be the partner of choice for entrepreneurs in this age of “Information Revolution,” where the compounded power of technology and capital creates extraordinary evolution. This fresh capital will enable Source Code to continue its strategy of backing early-stage and venture growth-stage businesses focused on three fundamental drivers: “Internet+,” “AI+,” and “Global+.”
Top Global Professional Investors Show Continued Support
In this new fundraise, Source Code Capital has attracted the support and investments from prestigious SWFs, endowments and foundations, pensions, fund of funds, family offices, and other leading enterprises. All existing investors have re-upped. Given strong performance and an attractive strategy, the funds were oversubscribed. Yes despite the heavy over-subscription, Source Code Capital opted to adhere to its strict principles and discipline, and kept the fund sizes at their initially-planned hard caps.
Charlie Cao Yi, Founding Partner of Source Code Capital, said: “We are very grateful to win the support from these top global institutions. Their acknowledgement of our professionalism, our strong performance and differentiated investment strategy, and their recognition of our market position, our broad industry networks and resources, as well as our ability to conduct rigorous investment decisions – means a lot to us. These new funds give us the opportunity to extend continuous support to many New Economy companies, and to accompany and support them in more stages of their development. It also allows us to access greater growth opportunities and achieve our broader vision. We look forward to helping our companies become leaders in their industry in China as well as in the world, while continually seeking to provide top-tier returns for our investors over the long-term.”
With the completion of the fundraise, “Code Class” has been further strengthened, especially with the introduction of more industrial capital participation from Europe, the U.S., Japan, South Korea, Southeast Asia, and other regions. “Code Class” is Source Code Capital’s super hub, a strategic alliance composed of 30+ New Economy leaders in China and Source Code Capital’s portfolio of 150 companies.
Continued Investment Focus through Thorough Research and Source Code’s “Big 3” Fundamentals Drivers
Since 2014, Source Code Capital has created and invested along its “Big 3 Fundamental Drivers” investment roadmap. This unique approach, which is based on bottoms-up research, has allowed Source Code Capital to discover many promising and innovative companies with long-term value.
By following the “Big 3” investment roadmap (representing Internet+, AI+, and Global+), Source Code Capital has now partnered with 150 companies across many different sectors, such as media and entertainment, consumer services, enterprise, finance, retail, transportation, housing, education, and healthcare. Today, its family of portfolio companies include: ByteDance, Meituan Dianping (3690.HK), Homelink, Qudian (NYSE: QD), Asset360, Smart Finance Group, Insnail Hospital, Magnet Finance, ABC FinTech; Yijiupi, Yimidida, XiaoYaoYao, Edianzu, Baibu, Zhongneng United, YunQuNa, Ruigushop; Pagoda, RELX Technology, Meili Inc. (Mogujie) (NYSE:MOGU), XinChao Media, Ziroom, Julive, Huizhaofang, CHJ Automotive, Che300, NIU Technologies (NASDAQ: NIU), Haifeng Education, KnowBox, Walnut Coding, Weimai, Huishoubao, Linlinyi, Linji Convenience Store; Krazybee, Zenjoy and BluePay.
Source Code Capital’s investment strategies and results have won it broad industry recognition, both in China and internationally. In 2018, Source Code Capital was awarded multiple prestigious honors including: “China’s Top20 Leading Venture Capital Institutions” by Zero2IPO, and “Top10 Most Influential Venture Capital Institution in China” by 36Kr Media. Founding Partner Charlie Cao Yi was featured consecutively in 2018 and 2019 on the renowned Forbes Midas List, which rewards only the best investors in the industry. Partner Samuel Huang was also chosen as “2018 China’s 100 Best Investors Voted by Entrepreneurs” and “2018 China’s Top10 Online Education Investors” by 36Kr Media.
Enhancing Organization Capacities, Particularly in Post-Investment Value-Add
In the past five years, Source Code Capital has focused on deepening its organizational strengths, and built a team of almost 60 professionals across investments, post-investments, and operations. Over the past two years, special attention has been given particularly to deepen its post-investment capabilities. Today, Source Code Capital has brought together a team of passionate and dedicated post-investment professionals. It has established a wide array of services like Human Capital, Public Relations, Financial Advisory, and Policy, in order to cover multiple aspects of its entrepreneurs needs and demands.
In 2018 alone, 426 post-investment actions were completed. For instance, the Human Capital consultants recommended nearly 1,000 senior candidates to help entrepreneurs fill core positions; the Policy Research department was able to keep up with the numerous policies changes and advise entrepreneurs on interpretation of said policies and needed adjustments; the Financial Advisory consultants served as important linkages with “Code Class” members to help member companies raise next-round financing; and the Public Relations team provided advice to help portfolio companies formulate media and marketing strategies.
In addition, Source Code Capital also created and organized multiple signature “Code Brain” events, aimed at helping CEOs broaden their vision, deepen their management acumen, and better expand their entrepreneurial capabilities.
As Charlie Cao, Founder and Managing Partner said, “The Source Code team is relentless and dedicated to finding, investing with, and serving the best New Economy companies. To help every ordinary person, whether young or old, eat better, dress better, live better, play better, gain access to more convenient travel options, more customized education, and more affordable healthcare… this is why we work tirelessly together with our entrepreneurs.”
“Our goal is to support companies through all stages: to help them achieve more, accelerate sales growth, lower procurement and logistics costs, improve working capital turnover, improve management and operational efficiency, unleash the potential of their talents, and increase their global competitiveness… plus provide other know-how to help them build and run sustainable businesses. We hope to quietly support every dedicated, audacious, and creative entrepreneur, and encourage them during their journey to jointly promote business and technological innovation. It is our aspiration to achieve this vision, and to continually create enduring, lasting, real value, for society.”
