Allen Zhu of Jinshajiang Venture Capital shared a screenshot in a circle of friends, and Wang Ran of Yi Kai Capital even posted a long microblog on the occasion of her wedding, expressing her great agreement. "What era is this era ending? Simply put, this is an era when the primary market is madly valued and can be punished. "
In the tide of mobile Internet venture capital in the past two years, growth is regarded as the top priority for both entrepreneurs and investors. Many companies that have not found a business model and continue to lose money can easily get financial support from the market as long as they can tell a story of rapid growth.
When faced with the question of how to make money, their answer is usually vague: Tencent didn't make money at first, now look. The profound meaning is self-evident: Tencent initially acquired a large number of users through QQ without establishing a business model, but now it has become an Internet giant, with its market value ranking among the top in the world. This is indeed an excellent example of persuading questioners-it's just that the process of giants struggling to find a profit model after acquiring a large number of users is usually ignored by most people.
However, the wind direction has obviously changed. After experiencing the carnival-like mobile Internet venture capital boom, everything is returning to rationality. Looking back at history, the same story is always repeated, but it is put on a different coat.
It is hard for anyone to forget that five years ago, Didi and Kuaidi launched a subsidy war after receiving the capital support from Tencent and Ali respectively, which was the craziest money-burning war in China's Internet history. They even have their own Baidu encyclopedia-taxi software subsidy war.
The two sides fought hand-to-hand and the situation was deadlocked. Looking back briefly, everything is still crazy.
201465438+1October 10, Didi announced the opening of wechat payment in 32 cities, using wechat payment, passenger fare reduction 10 yuan, driver reward 10 yuan. 10 days later, "Fast Taxi" and Alipay announced their follow-up. Since then, the subsidy strategy has gradually evolved into limiting the number of subsidized trips. By the end of March of that year, Didi taxi was announced. Since the beginning of the subsidy, the number of its users has increased from 22 million to 654.38+billion, the average daily order number has increased from 350,000 to 52 1.83 million, and the subsidy has reached 654.38+0.4 billion yuan. Although each subsidy has dropped by two-thirds compared with the peak, it still costs hundreds of millions of yuan every month.
The subsidy war has brought a lot of capital consumption to both sides. On Valentine's Day 20 15, Didi Kuai announced the merger, but the subsidy war did not end. Uber China's wanton attack diverted the war between local giant Didi and global giant Uber.
The war of burning money started for the second time, and capital continued to provide ammunition.
2065438+July, 2005, Didi Kuai announced the completion of its $2 billion series F financing, only two months away from its $65438+42 million series E financing. In September, Didi Kuaidi once again announced that the F-round financing had joined new investors, with $2 billion becoming $3 billion and the valuation rising to $65.438+$06.5 billion. In the same month, Wu Bo, an independent registered company of Uber in China, also completed the Series A financing of US$ 654.38+02 billion. 20 16, 1 June, China Uber completed another round of financing of about $2 billion.
In the face of fierce fighting, Didi CEO Cheng Wei wrote in an internal email: "Uber is the company with the strongest financing ability in American history. It entered China with huge funds and needed to support multiple business lines to win. Financing activities are a matter of life and death. "
Travis kalanick, the founder of Uber, said, "I hope this world is not like this. I prefer architecture to fundraising. But if I don't participate in large-scale financing, I will be squeezed out of the market by other competitors who spend money to buy shares. "
It's like riding a high-speed roller coaster. Although he is the founder of the enterprise, no one can control the next step of things, neither Cheng Wei nor travis kalanick.
The taxi software subsidy war has opened up a new situation of competition in the Internet market in China. As a result, burning money subsidies have become the mainstream way for start-ups to acquire users.
20 14 summer file "Transformers 4" opened the curtain of online ticketing platform subsidizing movie tickets on a large scale. "Transformers 4" grossed more than 600 million yuan in its first weekend in Chinese mainland, in which Cat's Eye took Meituan as the diversion entrance, and the box office reached 4.5 million, contributing more than 30% of the box office. The effect of burning money mode is remarkable, and the subsidy war broke out rapidly. During the peak period, Cat's Eye, Taobao Movies, Lithography and Baidu Glutinous Rice are supported by giants, and each movie ticket in 9.9 yuan and 19.9 yuan has become the mainstream of the market.
The same story is constantly staged in the fields of take-away and online travel. When subsidies can easily capture users' minds, the old way of gaining recognition by improving products and experiences is no longer so sexy.
The result of the rapid maturity of capital entry is obvious. Only two years after its establishment, it burned 654.38+05 billion yuan, and the valuation of Didi was quickly pushed up to 654.38+00 billion dollars in 2065.438+04. But paradoxically, the three participants in the taxi software subsidy war are in a bad situation now.
Uber's valuation was close to $90 billion at its peak. After listing in May this year, Uber broke its first day and its market value fell below 70 billion US dollars. Now Uber's share price hovers around $30, and its market value is in the early 50 billion, which is close to the peak. Players who entered the Uber Capital Bureau in the later period obviously could not get considerable returns.
After Didi suffered a hitchhiking murder case in Yueqing last year, it was not only attacked by public opinion, but also went offline from its most profitable hitchhiking business, and it was far from being re-launched. This black swan incident disrupted Didi's IPO plan and aggravated Didi's profit dilemma. In the context of Uber's poor listing performance, it is more difficult for Didi to achieve good results in the secondary market.
In April, 20 18, Meituan acquired mobike, ending the bicycle war of * * * burning money, and also ending the internet burning money war that started in 20 14.
With the help of multiple factors, Internet companies staged a wave of IPO on 20 18, and the madness of the primary market ushered in the test of the secondary market. From the results, most of them are not so ideal, and the valuation of primary and secondary markets has become the norm.
The chill hit many people's hearts, and the roller coaster that was once uncontrollable gradually slowed down.
"(If the stock price is good), then everyone will continue to dream of explosive growth; If it is not done well, the bubble era of venture capital will be over. " In 20 18, on the eve of Xiaomi and Meituan's listing in Hong Kong, Wang Gongquan, a famous investor, planted a flag on social networks, which unfortunately came true.
2065438+July 2008, Xiaomi finally listed on the Hong Kong Stock Exchange, but it fell by 2.53% at the opening, and the price was 16.6 Hong Kong dollars. After the release of the first annual report at the beginning of this year, the capital market continued to release pessimistic signals. On the second day after the financial report was released, Xiaomi closed at 1 1.66 Hong Kong dollars, down 4.43%. The Hang Seng Index fell 0.38% on that day. Recently, Xiaomi's share price has been hovering at a low level, and this company that once led the market is suffering.
In a speech at the beginning of the year, Allen Zhu revealed the cruel truth with data: "Last year may be the largest IPO year since China 10, but the combined market value of these companies is almost $654,380+020 billion, and 80% of private equity investors in the primary market do not account for it. Generally, listed companies give more than 15% to investors, at least 20% to entrepreneurs, and less than 70% to private funds,12 billion * 70%, which is $80 billion. The annual investment is10 billion USD, and the whole industry (referring to venture capital) is also losing money. "
The biggest attraction of internet companies lies in their high growth. The success of Nasdaq lies in its ability to attract outstanding companies to go public when the market value is very small, and then let investors continue to share its fast-growing dividends, resulting in a wealth effect.
However, great changes have taken place in the field of Internet venture capital in the past decade. Allen Zhu concluded that there are too many smart people, and everyone knows to make money for the growth of enterprise value. The best way to grasp the enterprise value is to invest in the primary market. This is also why in the past few years, capital has become an important reason for the rapid growth of enterprises that have not yet found a business model to continue blood transfusion.
In the new venture capital environment, Softbank Vision Fund is the most representative participant. Softbank's investment strategy is summarized by the outside world as follows: paying attention to scale, adhering to the winner-takes-all strategy, targeting companies with market share between 50% and 80%, and making these companies' new business grow rapidly on a global scale through huge investment. The lower limit of vision fund investment is 1 billion dollars, but most of them are between 500 million dollars and several billion dollars, usually accounting for 20% to 40% of the company's shares.
The story of Masayoshi Son's victory over Yahoo and Alibaba made him enjoy a high reputation among entrepreneurs in China. In the previous wave of cmnet venture capital, Softbank was also an active participant, and Softbank was included in Didi's investor list. Globally, companies such as WeWork and OYO have been incorporated by Softbank.
Softbank's investment strategy is the representative of venture capital preference, and these investment preferences have promoted the formation of the venture capital circle bubble to a certain extent, and even spawned the TO VC model-bringing users through promotion, increasing transaction volume, and then financing with beautiful data, and using this money to continue to promote users, and so on. In fact, a healthy business model has not been established, and it basically depends on VC blood transfusion to survive. As a result, there are advertisements and soft articles of the entrepreneurial team. These advertisements and soft articles are based on what number investors usually turn in the circle of friends and what number they see.
When the capital game can run smoothly, Masayoshi Son and Softbank are honored on the altar, but when the bubble bursts, they will be examined with a magnifying glass.
"Mr. Masayoshi Son's Softbank Fund, $654.38+00 billion represents the peak of venture capital now. All smart people hope to seize some excellent enterprises early and grow with them. 654.38+000 billion dollars invested in those start-ups, which delayed the listing time. Enterprises that might have been listed in 3 or 4 years are now listed in 5 or 6 years. " In a speech at the beginning of this year, Allen Zhu made the above evaluation.
Wang Ran more bluntly blamed the overheated Internet venture capital in the past few years on crazy capital: as long as a madman jumps out and gives a high valuation (especially if this madman has a resounding name and an enviable success story), all investors will feel that this is a realistic "comparable" benchmark, and all entrepreneurs will feel that if you don't give me the same or even higher valuation, you are taking advantage of me.
"No one to think about it, this madman may really be a madman. No one thought that the valuation methodology of the entire primary market based on one or two comparable companies and one or two big-name investors in these years may be really wrong. "
In this regard, Wu Shichun, the founding partner of Meihua Venture Capital, told Shenhuan that a single company may be highly valued by irrational capital, but the valuation of the whole market is still a reasonable game process, and it is impossible to just cause a bubble by irrational capital.
"When the curve of prosperity does not see a decline, everyone is more optimistic about the future, and the valuations given are given in a way that prosperity can be sustainable. However, once various factors lead to prosperity and collapse, the entire valuation will be greatly challenged and affected, so the bubble will burst. "
Many parties conspired to create a carnival, but the bubble still ushered in the moment of bursting.
At home and abroad, the performance of star companies such as Xiaomi and Uber after listing has triggered the market to reflect on the past Internet venture capital model.
In Wu Shichun's view, the collapse of the valuation of representative companies means the bursting of a new round of internet bubble, "just like the internet bubble of 1995-200 1."
Internet bubble, also known as network bubble, refers to the speculative bubble from 1995 to 200 1. In the stock markets of Europe, America and many Asian countries, the high-speed rise of stock prices of enterprises related to technology and emerging Internet reached its peak on March 10, 2000 when the Nasdaq index reached its highest point of 5048.62.
Taking Priceline (now renamed Booking) similar to Ctrip as an example, Chuxin Capital showed the madness of the last round of Internet bubble.
Priceline was founded in 1997 and listed on Nasdaq in 1999. It is a "living fossil" that survived the Internet bubble (the other is Amazon). As one of the star companies during the Internet bubble, Priceline retained and acquired users through a large number of subsidies in the early stage of development: at that time, Priceline lost an average of $30 per ticket sold-just like the current subsidy model of Ruixing.
1999, Priceline was listed on NASDAQ, and the issue price was 16 USD per share. The highest point of the day rose to 88 USD per share and finally closed at 69 USD. This made Priceline's market value reach $9.8 billion, setting a record for the first day of IPO at that time.
But at that time, Priceline's loss far exceeded its revenue. However, neither ordinary investors nor professional investment institutions care about losses, because steady development is too unattractive compared with losses but rapid growth.
The madness didn't last long. With the continuous interest rate increase by the Federal Reserve in 1999 and 2000, and the measures to curb the excessive rise of stock prices, the bubble burst. On March 10, 2000, the Nasdaq index reached a peak of 5048.62 points, and then the stock market continued to plummet, and Priceline's share price fell by 94%.
In this round of storm, China Stock Exchange was also affected: Sina's share price fell from 60 yuan to 1 USD, and Netease's share price once fell to1USD, which was the darkest moment in Ding Lei.
The way to get through the crisis is simple: reduce losses and seek profits.
After the internet bubble burst, Jay Walker, the founder of Priceline, proved to be better at financing than helping investors create profits. Before Priceline made a profit, Jay Walker extended the "self-pricing" model to gas station services, groceries, insurance, mortgage loans, long-distance telephone service and car sales.
In 200 1 10, Jeffery Boyd took over as CEO and made the following decisions:
Although these actions were controversial, Priceline made its first profit in 2003. After entering the European market and gaining a firm foothold in the online hotel reservation business through the acquisition of booking.com, Priceline ushered in a period of rapid development. Today, booking has become the world's largest OTA player, with a market value of more than 80 billion US dollars, and once reached a milestone of 654.38+000 billion US dollars.
Similarly, Netease's method of getting through the crisis is no different.
200 1 Netease walks out of the shadow of portal advertising through wireless value-added services. Since then, Ding Lei has expanded its game business on a large scale. At the end of 200 1, a Chinese Odyssey Online came out, and Netease quickly became one of the game giants. In 2004, Netease launched "Fantasy Westward Journey Online", which is considered as the benchmark of national online games in China.
Relying on e-mail and wireless value-added services as the basic disk, Netease embarked on the fast track through games. Since 2003, Netease's share price has been rising steadily on Nasdaq, helping Ding Lei become the richest man in China of Forbes and Hurun.
Many signals show that the chill of the Internet has hit, and previous experience shows that the road out of the trough is not so complicated. As Wu Shichun said, "History is repeating itself, but now the rhythm is to pay more attention to hematopoietic capacity and cash flow."
When the gorgeous coat fades, it is time to return to the common sense that has been despised, such as steady development and the pursuit of profit.