Zhou Wei, founder of China Creation Ventures, previously spent 10 years at U.S. top venture capital firm Kleiner Perkins Caufield Byers (KPCB) China, where he was Managing Partner and led its China digital practice group. Before establishing his record-breaking portfolio in fintech investments, he was a 10-year serial entrepreneur. Now at the age of 44, he decided to fully follow his entrepreneurial spirit by opening China Creation Ventures with a group of partners.
China Creation Ventures (CCV) is located in Beijing’s Wangjing district, home to many tech startups. The venture capital firm focuses on early-stage investment in the technology, media and telecommunications (TMT) sector, and especially in fintech, big data and artificial intelligence. In less than six months, CCV raised 10-year RMB funds amounting to more than USD 200 million. CCV operates both RMB and USD funds.
Now is the time for Chinese technology innovation and Chinese VCs
Since 2011, internet development in China has seen rapid development. The landscape has been especially enhanced by the startup boom fueled by local innovation. In Zhou’s eyes, with the open systems of IOS and Android having global reach, Chinese startups have equal opportunities to compete with the rest of the world. It has been reported that China has the largest number of mobile developers.
“Chinese startups can be competitive. After fierce domestic competition, the surviving startups are ready to explore the global market,” Zhou said.
He said that Chinese internet startups, especially in the mobile internet world, will compete globally in a direct race with its U.S. counterparts.
Like many others, Zhou also thinks that technology innovations in China will erupt soon and Chinese startups will go global; “there will be many more unicorns born in China”.
A former entrepreneur will breed unicorns
As for himself, Zhou said that he followed an inner calling to seize the opportunity of creating his own VC to back Chinese startups. He said the name ‘China Creation Ventures’ reflects his belief that the era of Chinese technology innovation has arrived. He observed this as the right timing, having gained his vision and experience as an entrepreneur and VC for 20 years. Recently, Zhou was selected as one of the 30 most influential Chinese investors by Fortune China in 2017.
“Unlike most investors, I was once a startup person, too,” Zhou said.
In 1994, he designed the first generation of point of sale (POS) machines for a Chinese computer company based in Fujian Province. He said this experience equipped him an in-depth knowledge of the fintech space and fostered his vision. Later, he invested in China’s leading financing companies, including JD Finance and CreditEase.
It wasn’t always smooth for Zhou. He learned a big lesson about investing in early part of 2000 when one of his former companies, Shanghai Hanbo Technology, got downsized because of raising capital from the wrong investors. This caused him to rethink his investment strategy and drove him to pursue a Master of Business Administration (MBA) degree from the Wharton School at University of Pennsylvania.
Investment philosophy：Go big and go global
After becoming an investor, Zhou started to form his own philosophy on investment strategy. He said it’s much more valuable for investors to become partners of startups, preferring to invest in and nourish them in their early stage. Moreover, he does not believe that investors should squeeze out more profits from these startups. For example, 75% of the startups in which he invested were raising Series A financing. For Zhou, that strategy has paid off so far, with nearly 30% of the startups in which he invested becoming unicorns.
He recalled the early days where he sat down with Liu Qiangdong, founder of JD.com, to formulate the best strategy for them.
“Despite JD.com losing money in the beginning from its heavily logistics-focused system and raising doubts from other investors, I never questioned its future and have always backed them,” Zhou said.
Today, JD.com is China’s second largest e-commerce platform, claiming 258 million active customer accounts by the end of June 2017.
Liu made a public endorsement of Zhou, stating “there are many people who claim they support entrepreneurs, but few actually do. Wei is one of the few who delivers on what he has promised. He provided me with significant support when JD was developing critical verticals such as logistics”.
To Zhou, whether a business model is scalable is what truly matters. Zhou went on to explain how he also cares about the social impact achieved by the platform. For example, Ximalaya Fm is the largest online audio app in China. It has more than 350 million registered users including mobile, wearable-device and automotive users. It has greatly changed the way in which Chinese people get information, from reading to listening.
“Wei and his team precisely and profoundly understand the development stages and success factors of a platform company. And, they demonstrate incredible patience. Their level of trust and support to the founding team are even more rare to be found,” Ximalaya FM CEO Yu Jianjun said about Zhou.
Zhou is very proud of his team at China Creation Ventures. Majority of the members are from the TMT investment team of KPCB. He feels fortunate to have such a stable and mature team, one where people who have already worked with each other for many years have decide to do one big thing together. CCV’s investment team has in-depth knowledge of the local markets in China. They hold sound investment records of many Chinese unicorn companies including Asia Innovations Group, a leading global mobile social entertainment group, and CreditEase, one of China’s top business consulting firms that offers wealth management services.
The goal of China Creation Ventures is to become a top VC within China and globally, Zhou said.