Tencent's investment banking breakthrough: foreign investment in the first quarter amounted to 54 billion yuan.

Tencent's investment banking breakthrough: foreign investment in the first quarter amounted to 54 billion yuan.

Qiu Zhili

[from a horizontal point of view, the number of investment in the Tencent in the first quarter is more than doubled, two times more than Baidu, and if the amount of investment before the B round, Tencent is already in the top three of the VC. ]

In some tough venture capital markets, there are still two engines that haven't slowed down their investment, first of all Tencent.

It has been defined as the largest, most active, fastest and most expensive investment institution in China, which has surpassed any of the angels, VC and PE, and has become the strongest pitcher. According to the author's rough statistics, as of July 23rd, the Tencent invested 93 enterprises in 2018, and the investment scale was more than 170 billion yuan. It was about to catch up with the amount and scale of the Tencent's investment in 2017.

More direct evidence is that, Tencent's first quarter financial report showed that only in the first quarter of 2018, the Tencent's foreign investment was up to 54 billion yuan, which was more than two times its first quarter profit. And from the horizontal point of view, the number of investment in the first quarter of the Tencent is more than twice the number of Ali, two times more than the Baidu, if the number of investments from the B round, Tencent already in the first three of the VC.

"Flow + capital" is regarded as the core competence of Tencent, and the capital opening strategy has opened up a new battlefield for Tencent.

Unlike Alibaba's insistence on strong interaction with its main business, Tencent's investment boundary is much larger than Ali's, and financial investment projects are not in the minority. In addition, the Tencent also invested twenty or thirty funds in the way of LP, including Jinsha River venture, Redwood, warp and weft China, Innovation workshop, Gao Yan capital, Chen Xing, CITIC industry fund and other well-known investment institutions.

All these make Tencent's investment style more and more full of "investment banking" characteristics. Although the Tencent said that investment is not to build a moat, but from "the Tencent has no dream to become an investment company", the battle of the content field and the headlines of today, in essence, behind the Tencent investment banking anxiety is still the capital of the flow anxiety.

The integration of defense is now expanding in terms of investment and investment. If the Tencent investment is focused on the two major industries of games and social networks, almost all of them have achieved endogenous growth through a holding or wholly owned acquisition. Now Tencent's investment has evolved into a "symbiosis, not ownership," and even some "would rather be wrong, not missed" meaning.

Tencent pays more attention to early investment, and has tested water in various fields, and most of them do not participate in specific business operations. In addition to social and entertainment business, other businesses, including e-commerce, new retail, O2O and so on, are basically capitalising on capital flows. According to IT orange statistics, 40% of the 125 companies Tencent invested in in 2017 occurred in the early stages of seed/angel and A rounds. And Ali accounted for about 20% of the investment in the early stage of seed / Angel wheel and A wheel.

For the Tencent, with the advantage of capital and flow, it can quickly promote the growth of early project, and be recognized in the capital market, and then get high return and long term revenue. At the same time, the investment path of the post financial strategy also avoids the internal resource consumption under the blurring of the industry situation.

"Gambling track" is a classic way of Sequoia investment in China. Tencent also has similar style in investment. Under the big investment map of Tencent, a lot of investment companies have cooperation and competition.

For example, in the field of medical beauty, Tencent has invested more beauty and new oxygen, the TV, the Dragon Ball live in the field of direct seeding, the knowledge of the social field and the impression of friends in the medical field, and the business also has a competitive relationship with the Tencent self - operated products.

Tencent's full track play is particularly evident in the live broadcast area. After betting on tiger teeth and fighting fish and becoming the biggest winner of the live game, the Tencent is still expanding its own live layout in the social entertainment field and storing ammunition for this fierce battle with short video.

Unlike Tiger Tooth and Pitfish, which are Tencent's external industry investment targets, NOW live broadcasting is Tencent's own live broadcasting platform as well as Tencent's company-class products. In addition, in the live edition of the Tencent, there is a penguin competition focusing on competitive games, focusing on different types of products of interactive entertainment, internal flow and resources, external strategic investment, and the classic Tencent play.

As with the "horse racing mechanism", the investment mode of gambling track will undoubtedly increase the cost of investment. There will inevitably be repeated construction and vicious competition between self and external investment and similar investment projects. But from the investment point of view, it can avoid missed opportunities, especially after the merger of enterprises, can also become beneficiaries to obtain stable return on capital.

"What Tencent needs is a strategic certainty and no harm to its industry status, regardless of the gains and losses of one city and one place. The company's strategic certainty increases by 1% every time, bringing its value far more than investment income. Internet observer Yin Sheng's point of view is the essence of Tencent investment.

The breakthrough of investment and capital defense are of decisive strategic significance for the Tencent. For a science and technology company with 20 years of history, the growth of enterprises and the ability of self evolution and innovation are the bigger propositions. What will the Tencent bring to us in the next 20 years?

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