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Source Code Capital recently announced the completion of its RMB Fund V, raising over circa RMB 7 billion. The RMB fundraising was achieved in a short three months’ time period from start to finish. In addition to nearly 10 insurance institutions, new LP supporters include government guidance funds, such as the National Fund for the Development of Small and Mid-sized Enterprises (SMEs). A majority of LPs are recurring investors. For example, Yuan He Fund of Funds has invested in Source Code Capital for already four consecutive years. At the same time, RMB Fund V also attracted many new prestigious LP investors. Source Code Capital currently manages around RMB 35 billion across both RMB and USD. Entrusted capital primarily come from LPs such as PRC central government guidance funds, financial institutions and insurances, leading local and global fund of funds, industrial enterprises, prestigious SWFs, as well as leading endowments, foundations and pensions. Founding Partner Cao Yi said, “We would like to thank both our long-term existing LPs and new LPs for their extensive support. With the completion of RMB Fund V’s fundraise, we will be able to provide more sustainable and effective support to SMEs across various development stages, and help propel excellent entrepreneurs to become leaders in their respective industries, supporting their growth all the way from the seed stage till they become industry leaders. We will continue to find and create value through investments in new emerging technologies. We are dedicated to investments advancing technological innovation and development, and to do our part to support Industrial Digitization, Artificial Intelligence, Robotics, Advanced Manufacturing, Green Development, Enterprise Software, Healthcare and Biotech, and other fields.” Wenna Jing, Head of RMB IR, said, “Source Code Capital continues to generate attractive returns for investors. This RMB fundraising received the extensive attention of the market. While working with both long-term and industrial capital to help technological innovation, we are devoted to maintain the scale of the fund at an appropriate level. We care for our investors, and we are committed to offer more high-quality products.” Invest in Early, invest in Small, Invest in Technology Since inception in 2014, Source Code Capital has backed and partnered with over 300 companies, of which 80% were in early development stage. These companies span across multiple sectors including Industrial Digitization, Artificial Intelligence, Robotics, Advanced Manufacturing, Green Development, Enterprise Software, Healthcare and Biotech, New Consumption and New Brands, and Global+. Since inception, Source Code Capital has conducted in-depth research regarding the digitalization of the industry. It found opportunities for digital upgrades in several different industries. At that time, a large number of traditional industries were starting to experiment with digitalization. For industries such as textiles, pharmaceuticals, after-sales automobile market, logistics, and FMCG, this process became increasingly obvious rather quickly. Source Code Capital investment witnessed the growth and expansion of a number of industrial digitization and industrial Internet companies, including: Baibu, Xiaoyaoyao, Casstime, Ruigu, YQNLink, Yijiupi, Edianyun, Zhongneng United, and others. In the past three years, Source Code Capital has invested in key technological innovation fields. These include Artificial Intelligence and Robotics, Enterprise Software, Advanced Manufacturing, and Aerospace Technology developed by companies such as ONES, Cyclone, Gaoding, Pera Global, D5, Taichi Graphics, Biren Technology, Silicon Integrated, GalaxySpace, and Space Transportation. In addition, Source Capital has accelerated its investments in Healthcare and Biotech, with companies providing medical technology such as Weimai, Bota, Sibionics, Jianhai Technology, Metis, Galixir, Nutshell Therapeutics. Regarding Green Development, Source Code Capital invested in the renewable energy automobile industry with Li Auto and NIU Technologies, and in “carbon neutral” related enterprises such as Unisun, Power Oak and Engrid in new energy. Healthcare, Biotech and Green Development makes people’s life better, improving sustainability and their health. But what about the consumption model? Regarding new consumption, Source Code Capital has focused on innovative products and services that continue to explore ways to improve people’s livelihoods. It invested in companies such as Bytedance, Meituan, Ke Holding Inc., Ziroom, Pagoda, Linji Convenience Store, Bloks Group, PMPM, Moody, WonderLab, Modern China Tea Shop, etc. Accompanying Entrepreneurs in the Long-run From day one onwards, Source Code Capital always sought for a close relationship with entrepreneurs, and constantly improved on its array of post-investment support services. Putting so much focus on post-investment services was not really understood by the industry initially, and some people thought that post-investment services could not be systematized. After thorough research, Source Code Capital established a systematic and product-oriented post-investment services framework. Across 10 functional modules and 28 products, we provide services in Code Brain courses, public affairs, PR, HR and organizational development, capital markets, business laws and taxation, and strategic, business development and related growth advice. Some products include, for example: weekly talent recruiting updates, organization consultation, industrial policy research, capital market consulting, and public relations support. Zhang Junbin, Founder and CEO of Narwal said, “Source Code Capital not only is an investment institution, it also assumes the role of a “co-founder.” It does not only provide financial support, but also helps with organization, processes, systems, and some external collaborations. More importantly, Source Code Capital does not let short-term market fluctuations influence me. They respect and help me keep my ideas, my philosophy and my visions.” Silicon Integrated founder and CEO Deheng Liu said, “Starting a business is difficult for entrepreneurs. Every day is spent in anxiety. During this process, I often talked with some colleagues from Source Code Capital. Each discussion felt fruitful, giving me a lot of insight and help. Every month, the post-investment team sends me a book. Those are carefully selected, and every time I read one, my relationship with Source Code Capital matures and develops. It is like growing together.” Shao Tianlan, Founder and CEO of Mech-Mind Robotics, said, “Soon after our establishment, we met Source Code Capital. We have been in contact since my early entrepreneurial process. When the company reached a mature enough stage, we immediately thought of Source Code Capital. Why? Because we have similar philosophies. This is a very good and trustworthy...
Liang Rubo, Co-Founder and CEO of ByteDance “Managers are usually very much inclined to clarify company policies. This force, like gravity, tends to push any organization towards the establishment of even more rules. When it is the case, we must resist the pressure of the said force, or it will keep companies locked in a permanent rigid state.” Recently, Liang Rubo, Co-founder and CEO of ByteDance, was invited to Source Code Capital’s “2021 Code Class Entrepreneurs Annual Meeting.” He delivered a keynote speech entitled “Keep Extending and Avoid Rigidity,” in which he shared some observations regarding how Bytedance maintains its organizational vitality and enhance management efficiency. ByteDance currently has over 100,000 employees in more than 200 cities around the world. How to implement scalable and effective management in an extensive, diversified, and fast-growing global organization is without a doubt a challenge. According to Liang Rubo, ByteDance’s practices include: 1. Establishing a basic management system to ensure administration efficiency; 2. Attaching importance to the cultural construction, and the alignment of ideas while increasing consensus and creating flexible rules; 3. Ensuring the implementation of management actions through a system and making good use of data to better assist the decision-making process; 4. Ultimately, it is necessary to make managers responsible for management decisions to ensure management effectiveness. The following is the transcription of the full speech: Hello everyone, this is Liang Rubo. Zhang Yiming previously shared his management idea of “Context, not Control” at a past Code Class gathering. As an organization size increases, it also gains in complexity, which can lead to confusion. This can be remedied by the recruitment of new talents to the team, as well as providing more context to people already in the firm, instead of adding more rules and processes which might in return create more disarray. These notions are derived from Netflix’s culture of “Freedom and Responsibility.” Today, I want to share with you some specific practices we adopt at ByteDance. Rules Overload May Lead to Organizational Rigidity ByteDance is now a very complex organization. We have over 100,000 employees in more than 200 cities around the world. Our colleagues work in different fields such as content platforms like Toutiao, Douyin or TikTok, business verticals that span both online and offline, such as Dongchedi, as well as corporate customer-oriented services such as Feishu or Huoshan and education market with Dalijiaoyu and so on. These businesses, by nature very complex and with different requirements, require the support of large teams. In addition, our organization is still growing at a very rapid rate, almost effectively doubling every year. ByteDance is a large-scale, very diversified business and a fast-growing global organization. Zhang Yiming, during his prior Code Class sharing, said that if an organization does not choose to be small, it must then be ready to face the difficulties that are likely to arise with its increase in size, and therefore in the complexity of its organization. A conventional approach is usually to add rules and processes to maintain order, but this can lead to organizational rigidity. Why? Because the department in charge of making those rules needs them to be as detailed as possible in order to avoid problems. This dependence on rules diminishes the momentum of a company by preventing it from looking for more optimal solutions. We are in an innovative industry, and the situation we face is often malleable and requires agility. If impeded by too many restrictions, employees will be unwilling to look for a better, or more optimal solution. When confronted by rules, people are naturally more inclined to follow them, rather than breaking them. Rules will also deter them from looking for new opportunities. Rules do actually inflate the cost of innovation by increasing the need for trials and errors, the fear of doing something against the set policies, and ultimately decreasing employees’ enthusiasm for innovation. Especially when there are major changes in the industry, when the company needs to move forward and inertia is not an option, the accumulated sum of rules and processes become a severe hindrance that will create major issues. For us, on one hand, the large scale of our organization means that we need to pay attention to management efficiency to ensure that it can be scaled without creating excessive confusion. On the other hand, we must also pay attention to its effectiveness to ensure that the organization does not become too rigid, and allow ourselves to maintain a certain flexibility in order to find optimal solutions. Management Solutions are Not Uniform So, what was our approach? First of all, you need to pay attention to cultural construction. We believe that through a company’s cultural construction, we can achieve more consensus in the company. With a common culture and philosophy to guide everyone, we do not have to rely on a heavy set of rules, and people are able to work in an equitable environment with similar standards. I remember a meeting where someone suggested that our decision-making process was unclear and recommended that we established more rules. For example, if no decision was made or no agreement could be reached within two days, then a solution should be proposed by a higher level of management. After discussion, we believed that such a rule should not be set. If this was implemented, many similar decisions would have followed, reducing the overall efficiency of policies. We should emphasize on responsibility and pragmatism, and promote initiative to keep the company moving forward. It is far more efficient to highlight fundamental points than to establish more regulations. In ByteDance, we have basic management mechanisms, such as budget, MBO, sequence levels, compensation specifications, performance appraisal, etc. However, all these processes are not uniform. They are informational, directional, and interrelated. Everyone has the liberty and the responsibility to make reasonable decisions based on the actual situations. Due to the lack of homogeneity, many of the company management tasks are difficult, and few people are actually able to handle it. The decision-making...
Source Code Capital has announced the closing of its latest USD $1 billion fundraise. With the completion of the new fundraise, the total assets under management at Source Code Capital have now reached a grand total of USD $2.5 billion and RMB 8.8 billion. This USD fundraise received enthusiastic backing from both new and old investors, with 100% re-up support from existing long-time Limited Partners ("LPs), representing strong cooperation between Source Code Capital and institutional LPs from all around the world.
Source Code Capital has announced the closing of its most recent RMB fund at RMB 3.8 billion. With the completion of this successful RMB Fund IV fundraise, the total funds under management at Source Code Capital have now reached a grand total of USD $1.5 billion and RMB 8.8 billion.
On August 13, 2020, Source Code Capital’s portfolio company, Ke Holding Inc.’s (“Ke Holding”) IPO landed on the New York Stock Exchange (stock code NYSE:BEKE), officially becoming China’s “leading housing services platform.”
On July 30, 2020, Source Code Capital‘s  portfolio company, Li Auto, was listed on the Nasdaq Stock Exchange in the United States. Li Auto (NASDAQ: LI) offered 95 million ADS at an initial price of US$11.5/share, and had a pre-market value of US$9.724 billion.
Cao Yi, Founding Partner of Source Code Capital, is once again chosen to join The Midas List for the third consecutive year, after being awarded with such distinction in 2018 and 2019. Huang Yungang, a Partner in Source Code Capital, made his debut appearance on the 2020 Midas Brink List.
During the last few days, COVID-19 has spread throughout the country. The grave situation in concerned areas is affecting people’s morale. On January 26, 2020, in order to help and support medical personnel that are fighting the virus on the frontline across China, Source Code Capital donated RMB 3 million to a Bytedance-anchored humanitarian SPV (in collaboration with the China Red Cross Foundation). This donation has the goal of supporting frontline medical staff who risk their lives to fight the coronavirus. In the meantime, Source Code Capital called upon all Code Class members (individuals and businesses alike) to contribute within their abilities to the fund, as a collective offer of compassion. As of January 27, 2020, Code Class members have donated another  RMB 1+ million. Those members included Baibu, Che300, Casstime, Ruigushop, Simple Pieces, Yimidida, Zhaomei, Zhongneng United, as well as Chuxin’s CEO Liu Changyi, Yishen’s CEO Huang Yiran, and Zhongneng United’s CEO Yang Tianli, who personally donated RMB 125,000. Source Code Capital employees also contributed and donated RMB 71,024. “Contain the virus, but spread the love.” In this severe situation, the Source Code community responded quickly, leveraging their industry resources and platform advantages in order to actively deploy humanitarian, material and financial resources. They coordinated their networks, merged the relevant online and the offline parties to help flatten the epidemic outbreak, and increase prevention and containment through practical actions. Industrial Internet Portfolio Companies Leverage Their Industrial Advantages to Aid the Fight Against COVID As an enterprise anchored in the pharmaceutical supply chain infrastructure of Hubei, XiaoYaoYao actively cooperates with the Health and Family Planning Commission and the Drug Administration to fully ensure a constant flow of medical supplies during Spring Festival in the province. All employees responded and came together to help during this special time, and a crisis meeting was held on January 22, 2020. The company's founder, Li Meng, rushed to the frontline to coordinate the command chain herself in order to make sure supplies were provided to the medical workers as fast as possible. After receiving the demand for masks from XiaoYaoYao, Ruigushop dispatched its employees on January 22, 2020 to re-allocate a total of 80,000 masks of type N95 / N90, from its own warehouse. All of these were delivered to XiaoYaoYao to first support Wuhan. Code Class members truly achieved a high level of cooperation, help and mutual assistance. Top-class Domestic and International Collaboration Ensure Delivery of Supplies YQNLink set up a special working group on January 23, 2020, to take advantage of its own international logistics platform to actively assist major domestic enterprises and institutions. It transports all levels of biochemical protective clothing, masks and other medical supplies from the United States, Britain, Japan, Brazil, Germany and other places, to China. Currently, 70,000 protective clothing units and nearly 100,000 masks are being shipped, or about to be shipped. This special project team overcame the inherent difficulties of working across different time zones and regions. This team has been on duty since Chinese New Year's Eve, barely taking a few hours of rest a day, in order to ensure that all international supplies were able to reach ports as soon as possible. Determined to support the prevention and help control the epidemic, Yimidida decided to start its new subsidiaries. On the first day of Chinese New Year, UC Express and Yimidida Express opened, providing a green channel for rescue materials transportation and distribution to Wuhan for free, nationwide in China. Yimidida promised to fully support the people of Wuhan in fighting COVID-19 until the supplies situation get back under control. Helping the Frontline Medical Staff On the first day of Chinese New Year, ByteDance decided to donate RMB 200 million to the China Red Cross Foundation. This special donation is to help fund humanitarian assistance for medical personnel fighting against the epidemic. This money will complement government guarantees and provide closer protection and insurance for frontline medical staff. On the same day, Ziroom opened the Wuhan Ziroom station graciously to medical workers. The station is located next to the hospital in charge of the epidemic diseases (next to the river bank), and comprised of a total of 35 rooms accommodated with 265 beds. This station will provide a rest and recovery haven to those working tirelessly on the frontline. The Meituan Public Welfare Foundation announced on January 26, 2020, that it would donate RMB 200 million to create a special national fund for medical care and support. The fund will cooperate with all relevant professional institutions to carry out targeted support and assistance. This will include services such as medical supplies procurement, humanitarian assistance, care and encouragement, which are much needed, to the front-line medical workers. Today, Ke.com (BeiKe) confirmed the donation of RMB 10 million to the China Red Cross Foundation and Casstime donated RMB 500,000 for the procuration of urgently needed medical supplies and other medical equipment. This donation will also be fully supporting epidemic prevention and control, and praise the valiant medical staff fighting on the front lines. To ensure the safe supplies of nutritious fresh fruit in Wuhan, Pagoda actively gathered various medical supplies. Today, the 100,000 pairs of masks shipped at the start of the Chinese New Year have been delivered to Wuhan hospitals. At the same time, an additional donation of RMB 1 million was used today to provide front-line material support in multiple infected areas. The United Aid Foundation will be shortly implemented and it aims to distribute a hundred tons of Korla pear in affected areas. All are making the necessary efforts with the undying hope that the situation will improve soon. Thousands of Doctors offer Online Consultation to Reassure Chinese Citizens On January 21, 2020, Weimai established a “Special Action Team” to actively organize human and material resources, such as coordinating the delivery of various medical supplies like masks and protective suits. On the last day of Chinese New Year, a “Prevention and Control Platforms for COVID-19” was launched in various cities across the country....
This Commencement Speech was delivered in July 2019, addressing all of Tsinghua University’s School of Economics and Management Faculty and Graduates, including Bachelors, Masters, and PhDs. The speech was first published by Tsinghua University, and below is the full transcript.
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.
Today, Source Code Capital’s industrial Internet portfolio includes companies such as Yijiupi, Edianzu, Yimidida, Xiao Yao Yao, Baibu, Ruigu Shop, ZSKX, ZS Fucai, YQNLink, Chuxin, and each has become a leader in their respective industry.
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