Since Mr. Chang joined Source Code Capital over five years ago, he led investments in Edianyun, Narwal, Usmile, BLOKS, Cha Yan Yue Se, Ziroom, Linji Convenience Store, Pagoda, among others. He also sponsored investments in Bytedance, Ke Holding Inc., Yijiupi, XinChao Media Group, Wangbaobao, and others.

Mr. Chang said, “Entrepreneurship is about understanding the era in which we live in. Entrepreneurs need to seize the moment and the opportunity. We believe that the future lies with a better use of technology, a focused attention on products and consumers, and a deeper understanding of the global market. We are consistently devoting ourselves to invest in the most promising technological products, as well as promoting the development of SMEs. We are willing to work with outstanding entrepreneurs to use the power of technology and innovation to help build a better life.”

“The excellence of an enterprise depends largely on its founding team; thus, it is fundamental for investors to find a top-tier founding team. Despite all the vicissitudes of the current economic landscape, Kaisi knows how to recognize potential and vision, and he will take a stand for what he believes in. He is making investments with long-term value,” said Junbin Zhang, Narwal Founder & CEO.

Pengcheng Ji, Edianyun Founder & CEO, echoed, “Kaisi is an excellent value investor. He is savvy on user demands, while also capable of delving into extending business models. He can see through things. We (Edianyun) enjoy Kaisi’s partnership all along our development and growth process. He offers helpful advice on strategy and tactics. He is indeed a trustworthy friend to us.”

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 foundation. It is like having an old friend joining in to start a business. It feels very good.”

Dr. Hao Cui, Founder and CEO of Bota Bio, said, “The entrepreneurs and the investors are like brothers-in-arms. They face many problems together. The idea of “create enduring real value” as put forth and proposed by Source Code Capital is impressive. This is what we want to pursue. Source Code Capital is also a firm that continues to grow, just like us. This is a process of mutual companionship. In the past few years, we both experienced growth and struggles. I am proud to have been able to witness our respective developments.”

Creating Enduring Real Value 

Source Code Capital had less than 10 people back in 2014 at inception. It gradually grew its organization across investment, post-investment, and platform. It now has 7 Partners and a professional team of more than 100 people, coming from very diverse backgrounds such investment management, product technology, entrepreneurs, corporate executives, consultancy, etc. Its leadership, industry knowledge and capacity to work as a team continue to increase. Its offices are distributed across regional institutions located in Beijing, Shanghai, and Shenzhen.

Over the past five years, Source Code Capital has been exploring ways to build an “intelligent organization” in the investment industry. The firm has been implementing an organic collaboration of sensing, computing, and executing, and it is constantly evolving. How to provide timely, effective and accurate feedback and review mechanisms? How to make the most of the respective advantages of the “distributed computing” and the “centralized computing” system? How to design a reasonable organizational structure with an institutional mechanism, a process system and other transmission control units? How to advance through culture consensus instead of rules? How to continue to stimulate organizational development and personal development in order to attract the best talents? Those are problems and challenges that need to be continuously addressed. It is these difficult challenges that drive the continuous “intelligence” of the organization, through which the firm might help every team member reach his or her full potential of “computing power,” and continue to iterate “algorithms” under a common mission, common vision and strategic goals. The overall output of the organization is a steady stream of competitiveness, creativity and growth.

At the 2021 Code Class CEO Annual Meeting, Cao Yi said: “We want to keep making the hard but right choices. Keep innovating, keep doing things that create value for entrepreneurs and the industry. Research, judgment, “vanguard-like non-consensus” investments, investing in “qualitative change” and focusing on the long-term. Insist on trusting visionary people, stand firm on the importance of a durable company. To think and do things like entrepreneurs. Our philosophy of cooperation is not based on short-term interests, not trying to maximize profits. We are willing to be fairer with entrepreneurs and partners alike. We hope that the whole industry can be more equitable, more lasting, and have a longer-term perspective on things. This may be the ‘entrepreneurial spirit’ of our industry, and the philosophies, ideas, and actions we develop will attract the people we want to work with. I think in the next 15 years, there will be a large number of world-class companies coming from China. We want to help them.”

With the completion of RMB Fund V, Source Code Capital will take root in China’s fertile soil of entrepreneurship and innovation. Invest in early, invest in small, invest in technology. Source Code Capital aims to stay at the forefront of the next big thesis, and stay ahead of consensus thinking. It will constantly look for the best entrepreneurs, and provide valuable help to enterprises. Source Code Capital seeks to continually provide its investors with excellent returns. It is here to create a community of innovations, here to create enduring real value together.

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 process often requires a lot of discussion and adjustment, which is by nature not very efficient. It requires managers to make a lot of decisions by themselves, and it is impossible to hide behind a set of rules. We believe that if we were to address management responsibility through rules and processes, it would be sending the wrong signal.

For example, in the case of a performance distribution, a manager communicating with an employee about his or her lackluster performance might say something like, “Actually, your performance is good but according to our guidelines, you did not perform well enough.” In that particular scenario, the manager does not engage his responsibility, but instead chooses to hide behind regulations. This is a resolution stripped of all meanings, it is “doing something,” but not achieving one’s managerial goals. So instead, our approach is to hold managers accountable for their own decisions, regardless of the fact that it can sometimes put them in an uncomfortable situation for a little while.

Such management mechanisms are actually very hard to implement in a short period of time, especially in a very large organization. That’s why we look for enterprise tools to assist in it. Not only do those tools ensure consistency for management mechanisms, they also help us identify exceptions and re-align the processes efficiently. Moreover, they provide us with valuable data.

For example, we use open data to make managers more aware of their management responsibilities, and help them become more responsible. Because of the transparency of the data, the manager’s behavior is easily comprehensible, whether it is the rapid promotion of a team, or whether a timely termination of an underperforming employee was done, or whether performance reviews are reasonable. By looking at the data, we can continuously improve and iterate the manager’s processes, and help them become more efficient. We are also able to look in the accumulated data for trends, in order to gather more information points that will help managers in their judgement.

Management Practices at ByteDance

How does this philosophy translate into practice? Let me start with a few common management actions.

The first one I want to talk about is the sequence level. We have sequences and levels. A sequence refers to a type of role, for example, R&D or a product role. Each sequence has its own level. But we do not have a written level standard, nor a special promotion committee. We just roughly align the reference conditions and procedures for promotion, and above a certain level, we will do company-level cross-evaluation.

We focus more on people and their abilities than models. We will use some sample comparisons to determine levels and align standards through discussions. When we look at what level an employee should be, we often compare employees, trying to find similarities, and trying to find out why they should be on the same level. At the same time, our team allows for “cross-level promotions” and “rapid promotions.” In this process, there is no hard specifications card nor standard, resulting in an overall larger flexibility.

In addition to this, when it comes to compensation questions, we, first off, determine a salary range based on the market for a specific sequence level. But this range is mainly for references purpose and can be increased or adjusted. Only when compensations need to be adjusted extraordinarily, do we require a list of reasons of why it should be the case. At the same time, we also track premium management situations, scrutinize the follow-up performance of premium employees, which in return allow us to inspect the relevance of the decision made.

Our salary adjustment and year-end bonuses have corresponding models. For a specific employee and in a specific case, the system will recommend a range of salary and a year-end bonus according to a certain rationale. Once again, these ranges are more of a reference and can be topped. We check reports to better understand the overall situation, compare it horizontally and vertically with relevant accounts, and look for more details when the premium was awarded.

Our performance appraisal is divided into two categories. The first one is the employee performance appraisal, and the second one is a team-oriented performance appraisal. During this process, there is no mandatory distribution, and there is no termination, but we do have an appraisal meeting. Using a certain set of rules to check whether the performance is reasonable, we try to reach a consensus. We will look at the performance distribution and compare it with our own history as well as with other organizations. We will also focus on cases that need more attention, such as employees delivering consistently high or low performance, as well as the ones with important performance fluctuations, and the premium mentioned above. We will also look at the performance distribution of different people in the same sequence at the same level. With this data, we can actually visually see the distribution of performance; this is to avoid errors and to try ensure that no one is wronged. Through evaluation and consensus, the overall performance appraisal tends to be quite reasonable and fair.

Regarding organizational performance, we have established some consensus, and we do not determine performance based only on the absolute output. If the business data is good, is the performance of an organization necessarily good as well? Not necessarily. We look at performance by whether or not we transcend inertia. Even solid business numbers may be hiding some problems, and may not accurately depict yearly performance because of a strong foundation model. We pay special attention to transforming inertia into energy, a driving force. The performance review of the entire organization is basically based on this consensus. As for how the entire process is carried out, it is mainly through discussion and common views, such as, “what might be reasonable regarding organizational performance?” “why do we say that additional potential was created,” or “are those numbers the results of passivity?” Through consultations and debates on these particular questions, we, then, draw some conclusions.

Then, how do we apply the results of organizational performance? We determine if the organization’s performance is good or average. What impact will it have? In fact, we do not currently have clear regulations in place concerning the application of organizational performance results, only directional guidance. If it is good, then an emphasis can be put on bonuses. As for how those are attributed, whether it is to send a strong incentive to key personnel, or to increase high performances employee’s motivation, this is determined by managers.

The system can look at the final bonus situation of employees in different organizations. If there are some anomalies, we will discuss those. As long as there is a reasonable explanation, it is all right. As I have said before, overly focusing on numbers or absolute output may mislead and shift everyone’s focus to getting the best out of one’s team, while possibly ignoring the bigger picture or overarching company goal. This will make it difficult to be true to the facts and reality, and may make it hard to discuss the business potential objectively.

Resisting Gravity and Maintaining Flexibility

Of course, our current management method is not without its challenges.

A little while ago, I was chatting with an R&D colleague that mentioned that he had enrolled on his team a very good graduate, with very good performance and who was showing rapid growth. But after working with us for two years, he was poached away by another company for almost double the salary. He felt it was a pity. I asked him, “You had such praises for this employee and you were so confident in his value, why didn’t you adjust his incentive scheme; you just let him go?” He told me that the incentive range recommended by the system was limited, and even by giving him the maximum every time, he was not able to keep up, because it just was not increasing fast enough.

This surprised me, because this manager had been with us for several years and was very familiar with the company, and yet he did not know that our policies were flexible. This also made me realize that in a large-scale organization, it is very difficult to achieve unity of knowledge and practices in management. Although we have ideas and tools, we still encounter various problems in specific cases. As far as I understand it, this is a challenge between an ideal and reality. How to improve the reality of a concept is a major problem.

Another challenge when fewer rules are implemented (especially clear ones), is that everyone has to consider a lot of variables when making decisions, and those decisions are made on a case-by-case basis. Furthermore, with everyone being responsible for his or her decisions, it is often necessary to align them on a larger scale through discussions and meetings. This not only does put greater pressure on everyone’s process, but it may also lower the general efficiency. 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 in a permanent rigid state.

On the other hand, the management problems we encounter in the real world are very complex. We cannot control, characterize or deal with the complexity of those situations through a set of rules. We need to be flexible so that managers can make sound decisions. The extent of certainty is very hard to grasp, especially when an organization is growing rapidly. It is necessary to ensure the effectiveness of management, and to ensure that the company is not paralyzed due to inefficient management. I think this is also a challenge we have been facing.

Finally, to sum up, the problem we face is actually how to efficiently scale and manage a large, pluralistic, and fast-growing global organization.

Our current approach is to increase consensus, and through culture, to reduce to a minimum of policies and rules, to achieve management efficiency through basic management mechanisms, to ensure management effectiveness by letting managers assume their responsibilities, and to ensure the implementation of management actions through a system, and making good use of data to better assist the overall decision-making process. During this process, we have to resist gravity and we must stay flexible all the time. There are still many challenges that lie ahead, and we are still exploring solutions to solve them.

Thank you.

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.

Cao Yi, CEO and Founding Partner of Source Code Capital, said, “On behalf of Source Code Capital, I would like to thank our global and top-tier institutional LP investors for their continued trust and support. We will continue to partner with and work hand-in-hand with visionary and audacious entrepreneurs, and through the compounded power of technology and capital, strive to change the world. We are dedicated to be the most entrepreneurial investment institution, and through outstanding performance, generate long-term and outsized returns to our investors.”

Jireh Li, Head of USD IR at Source Code Capital, said, “We are very grateful to see continued trust and recognition from LP institutions, particularly with regards to Source Code’s increasingly “institutionalized” organizational, unique Code Class ecosystem, in-depth research-driven investment logic, and effective collaboration between our “special forces” investment team, and our “arms arsenal” all-rounded platform support. While oversubscribed, we kept our discipline, stayed true to our strategy, and closed our Venture and Growth funds at respective hard caps.”

As of 2021, Source Code Capital is currently partner to 2 decacorn companies valued at over USD $100 billion, 3 portfolio companies valued at over USD $10 billion, and 20 unicorn portfolio companies valued at over USD $1 billion. In addition, 8 of our portfolio companies have now achieved successful IPOs, and Source Code has made over RMB 20 billion in return for investors.

Giving the same attention to both early and growth stage

Upon the completion of this new fundraise, Source Code Capital will continue to make early- and growth-stage investments. Following its “Three Fundamental Drivers” investment roadmap, it will continue to look for and partner with entrepreneurs in the fields of “Internet+”, “AI+” and “Global+”. Whether from the To B industrial Internet, which includes intelligent manufacturing, robotics and SaaS, or from the To C industry, focusing on new consumption content, new consumer brands and channels.

In terms of early-stage investments, Source Code Capital aims to focus on investing ahead of consensus, on the the “next big ideas” that are now “frontiers of the present, but will become mainstream of the future.” In terms of growth-stage investments, Source Code’s investment philosophy as based on “qualitative change” has been widely recognized by the industry. Through effective collaboration between the early-stage and growth-stage investment teams, Source Code is able to bring broader perspectives and in-depth strategic support to its portfolio companies across different stages. This multi-stage investment ability enables Source Code Capital to provide uninterrupted support for exceptional entrepreneurs through continuous rounds of investments across multiple stages of a company’s growth.

Such synergies generated from Source Code’s early-stage and growth-stage investments has already been reflected in many projects today, such as: Baibu, Xiaoyaoyao, Yijiupi, Casstime, YQNLink, Zhongneng United, Edianyun, HAI ROBOTICS, Mech-Mind Robotics, Gaoding Design and other “To B” companies, as well as Bytedance, Meituan Dianping (3690.HK), Li Auto (NASDAQ: LI), Ke Holding (NYSE: BEKE), RELX Technology (NYSE:RLX), Ziroom, Narwal, Pagoda, Pai Technology, Blocks Group, Cha Yan Yue Se and other “To C” companies. Investment in those companies can be divided into two categories, which is representative of Source Code’s strategy. Some of the companies received multiple rounds of support since the early stage onwards, while others were invested in during their growth stage upon diligent and thorough investigation, to help growth companies achieve “qualitative” changes.

“Special Forces” and “Arsenal”

From 2014 to 2021, the Source Code Capital team has grown from less than 10 people, to a team of 80+, including 6 Partners. This team was built on a common vision, it is an organic organization with remarkable execution capabilities. “Institutionalized”, “highly efficient” and a “powerful platform” are some of the keywords representing the Source Code team today.

Across the early- and growth-stages, there are three Partners, Cao Yi, Huang Yungang, and Wang Xingshi, and over thirty investment team members grouped into a “special forces” team, to provide support to preeminent entrepreneurs across different stages. Across the platform and post-investment operations, Source Code Capital established a team of professionals from different backgrounds, and organized them into an “arms arsenal.” They are here to empower entrepreneurs and investors alike, to help start-ups and portfolio companies grow by providing a wide array of solutions regarding strategy, growth, organization, resources, etc.

In 2020, using the concepts of “systematization” and “productization,” the post-investment team completed a total of 759 post-investment actions for early- and growth-stage portfolio companies. This team is organized to implement 28 post-investment products and services (a “4×4” table matrix of post-investment services). Regarding recruitment, the post-investment team helps companies in need to expand and refine their talent pool, and help recruit key talents for crucial positions, such as, COO, CFO, CHO, etc. In terms of policy research, it has provided enterprises with over 1,000 suggestions and policy solutions. In growth and development, it has helped new consumer channel enterprises link-up with major traffic platforms such as Douyin, Bilibili, and Xiaohongshu, to better access key resources. In financing, it has helped connect over USD $1 billion in equity financing solutions, as well as connect about RMB 1 billion in debt financing for more than 20 portfolio companies.

Source Code Capital has also established a unique industry “super hub” named “Code Class” since day 1 of its inception. This super hub is Source Code’s proprietary strategic alliance composed of 30+ New Economy leaders in China and over 200 Source Code portfolio companies. Enriched by the participation of entrepreneurs across different stages, Code Class is extremely active, creating an intimate link, promoting cooperation, experience sharing, and feedback in between Code Class members. One example of this activity is Code Class members promoting cooperation through the “Code Class Premium” package, and regularly using the “Code Class” online ecosystem to increase their knowledge, and sharpen their understanding and analysis capabilities.

Cao Yi said: “Working with outstanding entrepreneurs is the key to our success. It is also the main source of motivation regarding Source Code Capital’s organization growth. It is our philosophy to think about problems like entrepreneurs would, to strive to work alongside entrepreneurs and their teams, and overcome difficulties together with them. Once again, I want to thank all our entrepreneurs and our LP investors for their trust and support. We are fully committed to be the most entrepreneurial investment institution!”

Looking back at the past six years of entrepreneurship, building Source Code Capital, Cao Yi believes for most, “the past six years of Source Code would appear to be just six years of making investments. But for me, the past six years represent six most meaningful, fascinating, and thought-provoking years of entrepreneurial exploration in our investment industry.” “During this period, I grew from being an individual sniper to becoming captain of our team; from being a pure investor, to becoming an entrepreneur myself, participating in, and shaping our asset management industry.”

At the same time, Source Code Capital gradually developed. It started as a small team, to later becoming a cross-regional organization with nearly 80 team members and offices located in Beijing, Shanghai, and Shenzhen. Concerning its own internal organization development and innovation, Source Code Capital believes in institutionalization. Its “Special Forces” now include both early stage Venture and Growth stage investment teams, and its “Arsenal” includes professionals from its post-investment and platform teams. Together they are able to achieve real-time and multidimensional collaboration, which in return creates new synergies and increases company efficiency. This resulted in various improvements in Source Code Capital’s organization. Source Code Capital has also been fortunate enough to find itself on multiples awards lists at home as well as abroad. These achievements would not have been possible if without the firm resolution of entrepreneurs and the strong support of LP investors.

The pyramid model of investment institutions

Since its establishment in 2014, 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. A large number of new members, such as ByteDance, Meituan, KE Holding and Li Auto, have now started to take the lead in the development of China’s new economical wave. From Cao Yi’s perspective, he believes that if we want to summarize the past six years, we should start from the premises of each investment, and first answer three questions: “Why” do we do what we do, “what” it is we hope to do, and “how” to do what we hope to do.

If we are to define the “why, what and how” of an organization from an investment perspective, the answer will present itself as an orderly pyramid model. The bottom layer would be the initial intention of investment, which not only answers the initial “why” question, but also lays the foundation for the subsequent superstructure. Cao Yi believes that “if the initial intention of an investment institution is not clear and firm, it might be difficult to achieve excellent returns in a sustained manner, due to China’s strong competitive landscape. Swayed by constant considerations on gains and losses, you will end up exhausted both physically and mentally.

There is a derivative and progressive relationship between the “initial intention of investment” and “investment philosophy, investment strategy, investment logic, and investment judgment.” Among them, the “investment strategy, investment logic, and investment judgment” answers the “how” for an institution. For example, since its inception, Source Code Capital has been following is investment roadmap, the “Three Fundamentals Drivers.” using “Internet+,” “AI+,” and “Global+” as its main investment lines, allowing the company to keep moving forward. This is by far what is the most easily perceived by the outside world.

In order to understand the “what” of an organization in depth, we need to focus on the middle layer of this pyramid. This is where we find the answers to one’s investment philosophy. Investment philosophy can be understood as a value proposition, which is analogous to a person’s values. “A gentleman should do some things, he shall not do certain ones.” Investment institutions are faced with trade-offs. Compared with a concrete investment strategy, investment logic or investment judgment, the values of an institution are more general, more abstract and basic.

For Cao Yi, “there are too many opportunities in this world. You must try to keep things simple: what do I believe in, and what do I believe is valuable?”

The Investment Philosophy and Value Proposition of Source Code Capital

Focus on Big Changes

Before founding Source Code Capital back in 2014, Cao Yi spent many years in China’s top-tier venture capital institutions. During that time, he travelled abroad many times, especially in the Silicon Valley, in order to learn how to communicate and exchange. His now, deeply rooted investment philosophy of paying attention to big changes, was gradually developed over time. This is what naturally became one of Source Code Capital’s main value propositions.

Since its inception, Source Code Capital regards information technology as the most fundamental change with constant technological innovations, which push and drive forward commercial and social changes. Those will be subject to multiple evolutions through the integration of various industries and information technology, such as “Internet +” and “AI +”.

Investing in big changes can help us focus our limited time on the big picture, therefore allowing us to ignore medium-and small-scale changes. This is why, Source Code Capital, conscious of this narrow time window, wants to target major company growth and major technological innovations.

Since its reform and opening, China has really grasped the information technology revolution tide. During the period of opportunity created by the transition from PC Internet to mobile Internet, a large number of enterprises issued from the new economy have achieved leapfrog development. The accompanying local venture capital institutions were also paying attention to the “changes in the middle layer and the application layer brought about by these infrastructure changes,” thus allowing fir rapid development in recent years.

“Investing in great changes is very challenging,” Cao Yi explained. “Because you can also choose to invest in small or micro changes. This is also a valid investment logic. Investing in small changes is more certain, and the return period may be shorter, and thus it is not all that difficult to judge.” Investing in great changes means longer return periods and brings more uncertainty. Any subsequent change in the direction or in the development speed will bring unknowns. Therefore, grasping great changes requires more capabilities from investment institutions, one of them and not the least being having a firm idea: the capacity to believe in great changes and to accept the challenges and difficulties associated with them.

Emphasis on Innovation

With Cao Yi’s explanation, we can now see that Source Code Capital’s understanding of innovation is actually multidimensional.

The first of which is to choose technological innovation. Before the new economy, there was a market that tended to replicate already mature business models from Europe and the United States in China. It relied heavily on China’s low production costs and demographic surplus to become cost efficient. These products more than often not did not require much technological innovation. Let’s take an investment in the microchip industry as an example. At the moment, there are two popular investment options: one is domestic substitution, and the other is microchip research and development. Source Code Capital will strongly opt for the latter option. Even if the new products of microchip giants cover new possible applications, there will be “intersections” during development. Those “intersections” will include both innovation breakthroughs and domestic alternatives, which is the technological innovation Source Code Capital is looking for.

In addition to this, Source Code Capital also emphasizes on the need for the integration of technological innovation within model innovation. “Innovative enterprises must have good model novelty in order to exert the power of technological innovation, therefore accumulating resources and profits gain thanks to a robust business model. After, they can invest more efficiently in technological advancement by making deeper and longer-term investment in the related underlying technologies.” When model novelty and technology innovation are able to create this virtuous cycle, the growth potential development of said company will also increase.

The other is management innovation, or organizational innovation. This is particularly critical when population increment bonuses disappear and competition in domestic and international markets becomes increasingly fierce. For Cao Yi, today’s leading Internet enterprises in China, such as ByteDance, have begun to lead some organizational management innovations on a global scale. ByteDance currently manages a team of about 100,000 people around the world. The problem of organizational development is particularly complex. At the same time, there are facing globalization challenges. “How to manage top-down and bottom-up internal innovation? There must also be strategic guidance, flexibility and so on. These problems put a lot of pressure on ByteDance’s organizational system.” In order to meet those challenges brought by organizational change, ByteDance established the Management Research Institute. Lark, an enterprise communication tool that improves efficiency, started playing an important role in the process of transforming a hierarchical-based organization into a more organic one.

Faced with three types of innovations, technological, model based and in management, investment institutions and start-up companies alike need to keep an open mind, be willing to try and even actively embrace uncertainty. In Cao Yi’s eyes, “there has never been a still domain in this world. If there is one, it is also short-term and local. When we start considering things on both a larger scale and a longer time period, there is going to be wave after wave of innovation. No one can hide, lay low and rely solely on brand power and network efficiency to enjoy success.” The increasing anxiety felt by all major companies today also means that constant innovation iteration is becoming an unavoidable issue. What investment institutions can do, is to invest in innovative enterprises in order to find their own place in this ever-changing situation.

Invest in Qualitative Change

In the investment world, the standard practice is to invest in quantitative change, or iterative consistency. In that case, what remains unchanged is a relative tremendous demand and an already established supply chain. However, there is some adjustment in this quantitative change theory that appears in a more linear form. For example, leading companies might achieve a double-digit growth in both market shares and profit rates through better business model. At its core, this investment philosophy is based on the belief that some elements of this world are rather permanent.

For Cao Yi, if “Source Code Capital invests in qualitative changes over quantitative ones, it is because we believe that some parts or elements of this world are in fact nonlinear and transient. Therefore, some qualitative changes are needed in order to transform or evolve.” Source Code Capital hopes to detect some of those relatively determinant long-term megatrends earlier, because those often offer qualitative investment opportunities where potential returns and room for investment are also more extensive.

When having to consider between investing in quantitative change or in qualitative change, Source Code Capital tends to choose the latter, investing in stages 0 to 1 and 1 to 10. Even with Source Code Capital’s current investments that are still in growth stage, we believe that those companies still have the opportunity to carry out a qualitative change transition. For example, Lianjia to KE Holding, or ByteDance to TikTok, in which both quantitative and qualitative changes intersect.

Situated at the Frontier, Our Desire to be Vanguards

At the moment, it is easy for many companies to develop, following the mainstream “trends” in the market, quickly achieving a consensus, catching the eyes and attracting most funds of this industry. Source Code Capital strongly emphasizes its refusal to slide into this “short, stale and fast” inert channel. “Short” reflecting its short-term effectiveness; “stale” referring to its commonness, that is, do as the other do, which leads to mediocrity in the investment industry; And finally, “fast” which would be this constant search for those rapid in and out opportunities. Cao Yi explained, “it is in Human nature to be naturally drawn towards mainstream ideas. If there is no strong emphasis on some beliefs, philosophies or principles, it is then easy to fall into this apathetic stream of the industry, but it is very difficult to come out of it.”

The approach of Source Code Capital is to invest into early stages of development. That means even if there is no consensus in the industry at the time, even if there are no short-term investment opportunities, and even if only a few people are looking at this particular matter. What Source Code Capital should do, in this particular situation where 8 out 10 people will not be enthusiastic about a seemingly marginal company, is to become the other 2, the ones best prepared for when this edge will become the new norm.

In order to empower the belief in this “edge,” Cao Yi believes you need some romanticism and idealism, and he tries to look at the world from the perspective of future “science fiction.” Self-driving, AR, VR, brain-computer connection, and numerous robots are in reality already described at length in older science fiction movies. “Remember that in the movie “Iron Man,” the most successful company in the world is a robot company. As for now, in our world, the biggest company is a mobile phone company, but one day it might be a robot company. Some romanticism is needed if new things are to appear in the future.

Finding innovation on the edge of any industry brings with it an obvious advantage: you are a step ahead of everyone else. During this time period, it is easy to gain noticeable advantages by focusing on investment, research, post-investment and network resources, which will in return diminish the chances of clashes between venture capital institutions. Conflict might not be totally avoided, but on a larger scale, Source Code Capital wishes to use positional or ambush warfare, and gain significant advantages by deploying early. Therefore, when the open conflict starts, you will be in a stronger position.

Surround Yourself with and Partner with Visionary Entrepreneurs

As an old saying goes, “Men are afraid of going into the wrong business, women are afraid of marrying the wrong man.” But both of them should be afraid of the Investment industry. With all the great entrepreneurs that we have now, every investor may feel under pressure, afraid of not being able to keep up the pace, but it is this pressure that will lead to more growth.

After many years of investigation and research, Cao Yi and Source Code Capital believe that the best entrepreneurs are usually a collection of multiple contradictions. But they can integrate those multiples contradictions and make the best of them, such as being pragmatic and romantic at the same time. In the eyes of Source Code:

Excellent entrepreneurs know when to stand up and when to lay low. Standing up refers to their ability to compete fiercely when needed; laying low attests to their patience, building strong foundations in order to be able to reach the top.

Good entrepreneurs are both infinitely outward and infinitely inward. Infinitely outward means that they know no boundary, and they participate to enlarge business scope, scale, numbers and market value. At the same time, they are infinitely inward, which helps promote internal transformations at greater speeds. In Cao Yi’s view, “excellent entrepreneurs start a company to connect more extensively with social development as well as to create value. At the same time, it is also a path of self-cultivation. The two combines to achieve a very high inner state, therefore they are both infinitely outward and infinitely inward.”

Accomplished entrepreneurs are both emotional and rational. A good number of internet and technology companies’ entrepreneurs can sort things out logically and systematically. However, they are also very sensitive to human nature. “When things cannot be grasped by logic and rationality, they do not ponder about whether or not they do in fact really exist, but instead, approach them with perceptual perspectives and empathy.”

“Like contemporary rock stars, today’s entrepreneurs experience different states and feelings, like love, idealism, but also paranoia, loneliness and raw power,” Cao Yi said with much feeling and emotion.

The Original Intention is the Future

Investment strategy, logic and judgment are based on an investment philosophy, which is itself founded on the initial investment intention, which come from the source of the original animus. At the end of his speech, Cao Yi said that the initial intention of Source Code Capital is to be the most entrepreneurial investment institution, creating real lasting value, helping entrepreneurs to realize their dream of starting a business, helping them to change their industries, to later change the world.

At the present, the total funds under management at Source Code Capital has reached a new stage. Internal organization continues to innovate and iterate, post-investment services capabilities are steadily improved on, IT data value is emerging, and the external Code Class ecosystem is proven with unique value. These different aspects of optimization and growth all come from the strong identity developed at Source Code Capital.

Six years later, Source Code Capital has partnered with nearly 200 companies, covering all aspects of China’s new economy. Source Code Capital and its portfolio companies are becoming a new force to help promote China’s ascension. “Through our investments, we believe 2C companies are making people’s lives better, and 2B companies are making businesses smarter.” Source Code Capital will continue to work hand-in-hand with visionary entrepreneurs, remaining true to our original aspiration, to create real lasting value.

With Mr. Wang on-board, Source Code Capital now has five Partners (including Mr. Wang), one Venture Partner, and a total of nearly 80 investment, post-investment and platform team members. Cao Yi, Founding Partner of Source Code Capital, said, “We warmly welcome Wang Wei into the Source Code Capital team. After six years of development, Source Code Capital has now entered a new stage where more and more portfolio companies are ready to list. The addition of Wang Wei will greatly help our portfolio companies successfully seek listings in the A share, as well as on the U.S. and Hong Kong exchanges. His rich experiences in capital markets will provide our organization with a new competitive edge, with vitality, and innovation. He also has a deep and multi-leveled understanding of entrepreneurship and entrepreneurs, as from his previous roles he acquired valuable experience working with many outstanding technology- driven companies.”

“Over the past six years, Source Code Capital has also created within our organization a ‘Special Forces’ concept, which include both the Early and Growth stage investment teams, and an ‘Arsenal’, which includes professionals in the post-investment and the platform teams. The capital markets section, which is under the responsibility of Wang Wei, is an important tool in the ‘Arsenal,’ designed to provide support to both investment teams and portfolio companies, helping entrepreneurs in which Source Code Capital invested in, to become even more efficient in their respective fields.”

After coming on-board, Wang Wei will primarily help Code Class portfolio companies in the capital markets business. With his rich experience and expertise in that particular field, he will be able to empower and fulfill portfolio company needs in terms of capital markets development. Before joining Source Code Capital, he was also involved in capital market operations, and served as Vice President, Board Secretary, and CIO for several listed companies with capitalizations of RMB 10-100 billion, across the TMT, semiconductors, intelligent manufacturing and other sectors. Key projects include 360 Total Security, GigaDevice, Ingenic, Xunyou.com, and Suzhou Good-Ark Electronics.

Upon joining, Wang Wei said, “I am very happy to join Source Code Capital, and I want to thank Cao Yi and his team for their trust. In a period where the macro and capital markets environment is rapidly changing, companies and investors alike are presented with great opportunities and challenges. There are many variables, but Source Code Capital still maintains its original intention, based on empowerment and long-term companionship. Source Code Capital is constantly strengthening connections and interactions with its enterprises, promoting an in-depth exploration of companies’ values, to achieve better growth and mutual success. I highly agree with Source Code Capital’s value system, to “create real enduring value.” I am looking forward to work side-by-side with the team, in order to help companies establish more connections with the capital markets, and accelerate the expansion of corporate strategy and capabilities through capital operations. I hope to join hands with entrepreneurs to embrace major changes in the capital markets, grasp the major historical opportunities of industry and capital, and witness the dawn of this great era together.”

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.

In addition, Source Code Capital’s investment team has already achieved professional division and organic cooperation between the Early-stage and Growth-stage teams. This allows Source Code to better support promising companies from Early- to Growth-stages, through continuous investment and continuous guidance.

A combination of both Early and Growth perspectives can lead to a more comprehensive vision and a scientific decision. It also ensures that the investment team has a more accurate overall view of the industry and stages. This allows them to enhance their value judgment, which in return can provide Code Class members with more support on both board and strategic levels across different stages.

Until now, Source Code Capital has partnered with nearly 200 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), KE Holding (NYSE:BEKE); Li Auto (NASDAQ:LI), NIU Technologies (NASDAQ: NIU), RELX Technology, Narwal Robotics, Ziroom, Julive, Huizhaofang, Pagoda, Meili Inc. (Mogujie) (NYSE:MOGU), XinChao Media, Walnut Coding, Weimai, Huishoubao, Linji Convenience Store, Qing Hotel, Cha Yan Yue Se, WangBaoBao; Yijiupi, Yimidida, XiaoYaoYao, BaiBu, Edianzu, Zhongneng United, Keenon Robotics, Honganrobots, YQNLink, RuiGuShop, Cassmall, Che300; Qudian (NYSE: QD), Asset360, Insnail Hospital, Magnet Finance, ABC FinTech; KrazyBee, Zenjoy/ME2ZEN (KOSDAQ:A950190), BLUE, and OPay.

Self-drive, truth-seeking, openness, curiosity and striving for excellence are core qualities valued by everyone at Source Code Capital. The continuous iteration of its organization makes collaborations within Source Code Capital more efficient, and enables the team to continue to grow in an open and honest atmosphere. At the same time, Source Code Capital is constantly looking to add new talents to strengthen its ‘Special Forces’ and ‘Arsenal’ teams. Source Code Capital will continue to work hand-in-hand with the dedicated, audacious, and creative entrepreneurs to promote business transformation, and rely on the compounded power of technology and capital to create real enduring value, to make society happier, make life better, and make businesses smarter.

The theme of this year’s China digital summit was: “Innovation drives digital transformation, intelligence leads high quality development.” It gathered leaders and guests from various domains including several academicians from the CAS (Chinese Academy of Science) and the CAE (Chinese Academy of Engineering), national ministries and commissions members, as well as representatives from state-owned central enterprises and well-known companies. The topics addressed ranged from AI, 5G, Industrial Internet to blockchain, and were accessible through the cloud summit platform offering simultaneously both online and offline presentations. This allowed the creation of a perennial, never-ending exchange platform between the governance and companies where policies cases publication, scientific and technological achievements, industrial innovation can be discussed, resulting in deeper cooperation between entities.

The following is the full transcript of Jason Wu speech:

Dear leaders and colleagues, I am Jason Wu from Source Code Capital. First of all, I would like to thank the organizers for giving us this opportunity, as the only investor present today, to share some opinions from an investment perspective.

At the Digital China Summit last year, Mr. Cao Yi, CEO and Founding Partner of Source Code Capital, shared some details on the context of our investment in the industrial Internet. Today, based on this context, I would like to share with you some new investments we have made in the past 12 months, which is what we see as the “last mile” of the industrial Internet.

The “Last Mile” of the Industrial Internet

The concept of “last mile” is based on the “Three Fundamental Drivers” the investment logic that Source Code Capital has been following since 2016. We can see that the transformation of traditional industries by the “Internet+” has gradually extended from the Consumer Internet to the Industrial Internet. At the same time, “AI+” development is also having an impact in the industrial field. This result in a collision between “Internet+” and “AI+,” which is constantly producing new forms of business.

In the “last mile” of the industrial Internet, the robotic fields in which we are focusing on is actually experiencing the superimposition of three deciding factors: the right time, the right place and the right people.

The right time because the state’s support provides a major development opportunity, and the MIIT (Ministry of Industry and Information Technology) and its newly established Industrial Internet Research Institute are good policy drivers. The pressure of external environment provides external motivations, which may, in the short term, lead to a certain degree of restraint, is proved to be a strong development stimulus in the long run. In addition, in the wake of this post-epidemic era, many questions have arisen. For example, under what circumstances are the industry critical links stable? When facing a virus, people can no longer be a reliable factor, and the use of robots in some key positions has become an inevitable reality.

As for the right place, China is the world’s largest manufacturing center, with a wealth of applications and technology accumulation, which is a major geographical convenience. Take autonomous driving for example. With a large amount of governmental and capital investment, the technological accumulation and its industrial chain are relatively complete, but are still far from large-scale commercial application. However, if we slightly reduce the range of open roads and manned scenarios involved in autonomous driving and allow them in a relatively closed limited space, such as factories and warehouses, and unmanned situations, we can dramatically lower risk factors. Technology spillovers like the one in autonomous driving can create favorable conditions for the development of robots.

Last but not least, the right people. Dr. Zhang Hongjiang, Venture Partner at Source Code Capital, one of the top scholars in the field of artificial intelligence in China, made a very compelling argument. He pointed out that the number of skilled AI personnel in China has surpassed that of other countries in the world; and as you know as well, China possesses the highest number of engineers in the world, and we could go on and on.

Driven by the combination of those three deciding factors, place, time and people, Source Code Capital has seen the market for robotics n China constantly maturing during recent investment practices.

Value Creation of Robots and Robotics

There are two main aspects to the value creation of in the field of robotics.

The first one is data. At the moment, many applications from the Industrial Internet can achieve data connection, but robots equipped with various sensors could become the equivalent of human’s “five senses,” therefore becoming better at collecting various data at a production level. Hence allowing the development of a basis for a large-scale and at an in-depth level of an industrial database.

The second is intelligent manufacturing. Robots can also play the role of “hands and feet”, realizing production and manufacturing functions such as sorting, handling and manufacturing. From an industry 1.0 to 4.0, there is a process starting from mechanization, then electrification, moving towards automation and finally to intelligence. But we observed that many manufacturing industries in China have not yet fully realized Industry 3.0, which is automation. This means that we now have the opportunity in the manufacturing industry to realize both automation and intelligence at the same time, resulting in swift progress in the domain of intelligent manufacturing. Being at the crossroad of automation and intelligence, robots will be an important part of this process.

Investment Expectation: New Robot “Species” and Flexible Manufacturing

As investors, we expect to see longer-term, more transformative innovations. For example, we have invested in many robotic companies that focused on storage solutions, including AGV (Automatic Guided Vehicle), lifting, sorting and palletizing robots. In Industry 3.0 stage, many robots are still independent. Now, as these robots become more intelligent and more interconnected, we feel that unexpected synergies might occur.

Just like with our investment experience in the Consumer space,the 3G era saw the rise of Meituan and Toutiao, although many people didn’t expect this outcome when 3G applications started to make their way into commercial practices. The 4G era was more “classic” as almost everyone knew from the start that video would experience major development with 4G application. Still though, many didn’t foresee that the winner would be the short video format developed by TikTok at it appeared relatively late. We now think that new kinds of robots will be developed, but we do not have yet much details on that. From our past experience with the Consumer Internet, we predict that they may appear in the field of flexible manufacturing.

We can see that the “new consumption” model is obviously characterized by smaller quantity and multiple batches. This change in consumer practice will in turn stimulate the manufacturing side, forcing the industry to adapt to the new above-mentioned characteristics of demand. Therefore, we expect new “species” of robots to arise to better fill in the demands for flexible manufacturing. They will have the following characteristics: first, they will be able to meet flexible requirements induced by smaller quantity and multi-batch production needs; second, they will need to be intelligent and modular, while being able to carry out efficient production and transformation.

As an investment institution focusing on the “new economy”, we are closely following the evolution of those new “species”. We hope to be able to communicate and discuss this subject further with you. Let us, together, look forward to new investment opportunities in the Industrial Internet domain.

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.

The LPs for RMB Fund IV primarily come from mainstream domestic financial institutions, top-tier funds of funds, large-scale listed industry groups and government-led funds. Over 70% of the Fund came from previous LP investors, who have all re-upped and continuously increased their participation. This impressive 70% re-up ratio shows investors’ trust in Source Code’s outstanding performance. The cumulative DPI from Source Code’s RMB funds totaled over RMB 6 billion, and includes seven initial public offerings (IPO’s) so far, including the recently listed Li Auto (NASDAQ:LI) and KE Holdings (NYSE:BEKE). This level of recognition and commitment also comes from Source Code Capital’s core principle: Creating enduring real value. In the future, Source Code Capital will keep working with visionary new economic entrepreneurs to promote the continuous development of the industry.

Cao Yi, CEO and Founding Partner of Source Code Capital, said, “Despite a volatile environment this year, the fundraising work went smoothly, especially with thanks to the extensive support of our existing LPs. With our new LPs, we now have what the industry references as the “Seven Dragon Balls” of the industry. With their help, we will be able to provide sustainable and effective support to new economy enterprises across various development stages, and help propel excellent entrepreneurs to become leaders in their respective industries. Our wish is that the underlying changes in technology and commerce can increase the quality of life for society.”

Over the past six years, Source Code Capital’s team has expanded and now includes nearly 80 professionals, divided into investment, post-investment, and platform operations, all linked together in an organic fashion. Source Code Capital has also won many TOP LIST awards in the venture capital business, both locally, and internationally. Cao Yi, Founding Partner of Source Code Capital, made it on The Forbes Midas List for the third consecutive year, and Huang Yungang, Partner at Source Code Capital, made his debut appearance on the 2020 Midas Brink List.

Qualitative Change

Since it was established, Source Code Capital has been following its “3 Fundamental Drivers” investment roadmap, looking for tenacious entrepreneurs in the fields of “Internet+”, “AI+” and “Global+”, in order to create, together with them, real and lasting value. After six years of joint evolution, Source Code Capital and the Code Class members experienced development from the early stage to the growth stage. Whether from the To B industrial Internet, which includes intelligent manufacturing and robotics, or from the To C industry, focusing on new consumption content and channels, new entrepreneurs actively continue to join Code Class. Those enterprises gradually move forward from the “first curve” to the “second curve” and even the “third curve.”

In addition, Source Code Capital’s investment team has already achieved professional division and organic cooperation between the early-stage and growth-stage teams. This allows Source Code to better support promising companies from early- to growth-stages, through continuous investment and continuous guidance.

Based on long-term thorough industry research and efficient due diligence, Source Code Capital can complete an investment decision of hundreds of millions quickly and with impactful insight. The recent IPOs for companies, such as Li Auto (NASDAQ:LI) and KE Holding (NYSE:BEKE), are excellent examples of investments during the growth stage. The growth stage investment team also invested in “To B” enterprises such as Baibu, Casstime, XiaoYaoYao, Yijiupi, Yimidida, and Zhongneng United, as well as “To C” enterprises such as ByteDance, Meituan Dianping (3690.HK), Li Auto, KE Holding, Ziroom, Pagoda, Pai Technology and Cha Yan Yue Se. Some of them were continuously invested in from an early stage onwards, and others in their growth-stage.

A combination of both early and growth perspectives can lead to a more comprehensive vision and a scientific decision. It also ensures that the investment team has a more accurate overall view of the industry and stages. This allows them to enhance their value judgment, which in return can provide Code Class members with more support on both board and strategic levels across different stages.

Until now, Source Code Capital has partnered with nearly 200 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), KE Holding (NYSE:BEKE); Li Auto (NASDAQ:LI), NIU Technologies (NASDAQ: NIU), RELX Technology, Narwal Robotics, Ziroom, Julive, Huizhaofang, Pagoda, Meili Inc. (Mogujie) (NYSE:MOGU), XinChao Media, Walnut Coding, Weimai, Huishoubao, Linji Convenience Store, Qing Hotel, Cha Yan Yue Se, WangBaoBao; Yijiupi, Yimidida, XiaoYaoYao, BaiBu, Edianzu, Zhongneng United, Keenon Robotics, Honganrobots, YQNLink, RuiGuShop, Cassmall, Che300; Qudian (NYSE: QD), Asset360, Insnail Hospital, Magnet Finance, ABC FinTech; KrazyBee, Zenjoy/ME2ZEN (KOSDAQ:A950190), BLUE, and OPay.

The Power of the Organization

Over the past six years, Source Code Capital has conducted an in-depth exploration and iteration of its organization. This resulted in various improvements in Source Code Capital’s organization. Cross-functional collaboration within the company increases efficiency, creates new synergies and effectively simulates a teamwork between the “Special Forces” and the “Arsenal.” The “Special Forces” include both the early and growth stage investment teams; the “Arsenal” includes professionals with various functions in the post-investment and platform team, to empower the “Special Forces” and portfolio companies.

With the improved cooperation between early and growth and the post-investment teams, entrepreneurs can benefit from the in-depth knowledge of Source Code Capital regarding the industry and regarding entrepreneurship, right from the start. They can feel the dedication of the post-investment team, and experience the efficient execution ability of the operation team. Efficient collaboration is also organic, as it promotes mutual help and stimulates common growth among investment, post-investment and operational colleagues.

For example, when COVID-19 broke out around Chinese New Year 2020, the investment team was able to quickly understand the impact of the epidemic on member companies and their urgent needs. Meanwhile the post-investment and operation teams immediately offered eight “Code Brain” courses on the following theme: “Help each other, Fight COVID-19.” Code Brain is devoted to help entrepreneurs deal with various practical problems ranging from epidemic prevention, to financing, to online-remote work solutions, to policy interpretation and cash flow management.

As the epidemic came under control, resuming production and growth became the most urgent needs for company development. Source Code Capital also figured out channel and marketing support needs from the portfolio companies focusing on new consumption models. During preparations for 11/11 (China’s Singles Day, like “Black Friday” in the U.S.), portfolio companies promoting new consumer brands collaborated with ByteDance’s Tik Tok to carry out new innovative marketing strategies.

There are many other examples like this, from the continuous evolution of the “Code Class” ecosystem, the value of IT data capabilities, and cooperation between LP’s and member enterprises. The development of a more organic organization supported by multiples levels and cross-functional interactions can help the Source Code team adapt ahead of peers. Entrepreneurs and investors can feel the continuous innovation and iteration at Source Code Capital.

With the completion of this new RMB IV fundraise, Source Code Capital will continue to work hand-in-hand with the dedicated, audacious, and creative entrepreneurs to promote business transformation. This mission, relying on the compounded power of technology and capital, is all about creating enduring real value. Cao Yi said: “Whether it is technology or basic business, the essence [of that change] is to liberate people, to give them more freedom and make their time more valuable. We have invested in a wide array of excellent entrepreneurs and good companies. They are all making life better, making businesses smarter, making humans freer, and making life richer and more meaningful. This is the value we create together, and the most profound change we want to make.”

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.” The IPO price was set at US$20/ADS, 106 million ADS shares were issued, and the company had a pre-market value of US $2.12 billion.

From the perspective of the company’s GTV, back in 2019, Ke Holding already had become China’s largest real estate transaction and services platform. It is also China’s second largest commercial platform, just behind Alibaba. Ke Holding’s three main businesses are, existing housing transactions, new home deals, and other emerging businesses. Its commitment is to provide comprehensive and reliable residential services for over 300 million families. 

From Source Code Capital’s view, Ke Holding is a typical S2B2C business model. Source Code Capital, confident in this model, started investing in the company’s B round, and continued to do so increasingly in the subsequent C and D rounds, growing alongside Ke Holding.

Cao Yi, Founding Partner of Source Code Capital, said: “In our “Three Fundamental Drivers” (3×9) investment map, in the basic necessities provided by the “Internet+,” Ke Holding has become the most preeminent actor. In addition to Ke Holding, in the pan-residential sector, Source Code Capital also invested in other star enterprises like Ziroom, Julive, Huizhaofang, and Narwal. Housing services-related companies embody our investment logic. In traditional Chinese aspirations, one major aspect is the desire for a “home,” the wish for a better family life. The COVID-19 epidemic further reset our priority, making everyone more willing to “invest” into “living well.” We firmly believe that in that particular field, driven by forces such as Internet+ and AI+, those businesses will continue to develop and see the emergence of leading entrepreneurs, such as Ke Holding, creating enduring, real value, to improve the life of Chinese people.”

The Promising and Long-term Ke Holding Model

In a note, “A Letter to Shareholders,” founder and chairman of Ke Holding Zuo Hui said, “we divided the entire business chain of the real estate model into four mains areas: manufacturing, trading, housing, and financial service support. We believe that between the in-depth services provided by offline brokers and the consumer awareness established by online data, we have the potential to create new value across the entire business chain.”

China’s real estate transactions services market is vast, but due to weak infrastructure, the experience and the efficiency of practitioners and consumers alike has been proven difficult to improve on. In order to address the weaknesses of that business, Ke Holding built the ACN (Agent Cooperation Network, a broker cooperative network) model to redefine the relationship between service providers. As the underlying operating system of our platform, ACN connects different brands and brokers to help service providers cooperate efficiently and share success, which results in providing customers with better and more convenient services.

At the 2018 Code Class Annual Meeting, Mr. Zuo said that digitalization of the real estate industry represents the future. He said,“It seems to me that the real estate industry is the last one, or one of the last few industries in China, that struggles to go online. The main reason behind it is the fact that the whole industry chain is too long.”

Mr. Zuo said, “For us, the main issue in the complex delivery format is in the coordination of multiples roles. How to create more efficient synergies between the so-called platform B and C? How to reflect the data gathered online? These are part of the core changes we want to see happening in the future. In the real estate transactions chain, those changes are already occurring, and but when it comes to furnishing, major changes are likely to take place in the near future.”

The business model of Ke Holding can be summarized by “two networks.” Through the digitization and standardization of data, transaction processes and service quality, Ke Holding has built a “data and technology-driven online operating network” to help consumers make more accurate decisions, promote mutually beneficial collaboration between platform service providers and brokers, and enhance the whole industry’s efficiency. Whereas for offline, as according to the IPO Prospectus, Ke Holding is stationed in 103 cities across the country, connecting more than 456,000 brokers and 42,000 brokerage businesses from 265 brands, forming a “community-centric network of offline stores.”

“An online network” greatly improves the efficiency and the quality of offline operations. On the other hand, the “offline network” helps owners, customers and Ke Holding to generate more interactions and connections, generating therefore more and better behavior data. The two helps and complements each other, creating a virtuous ecological cycle. Ke Holding calls this transformation of the traditional service industry the “Agent-Engineer,” or “A-E,” where E turns data into a tool to empower A, helping him or her provide better services for their consumers.

At the same time, after years of research, Ke Holding built the ACN, redefining the relationship between service providers, and by a large extent, creating a huge “network effect.” While the existing homes transaction volume stays relatively constant and the number of broker-agents continues to consolidate, Ke Holding can superimpose on top of it even more services, fully enabling the “platform effect.” This “Dual network and dual core” system drove its growth to unexpected levels.

This is another reason why Source Code Capital is so enthusiastic about the S2B2C model of Ke Holding. Following this investment logic, Source Code Capital also invested into star enterprises with similar models such as Ziroom, Baibu, XiaoYaoYao, YQNLink, and Julive. These star start-ups, albeit playing in different industries, are making the most of the advantages of this model, and have introduced profound changes with far-reaching effects for the traditional industry.

The Layout of the leading digital company in the food, clothing, housing and transportation industries

In addition to the advantages of model, having a wide range of needs is also an important requirement. Source Code Capital believes that under the digitization of daily life needs, such as clothing, food, housing, transportation, etc., a group of platform enterprises, worth potentially hundreds of billions of dollars in value, will definitely emerge in the Chinese market. These start-ups will become a pillar in Chinese people’s lives.

In food delivery, Meituan, which survived the early battle for market staying power, has always regarded catering distribution as its core business, and gradually expanded to become a giant in the daily life services industry. As an absolute leader in the food delivery industry, Meituan’s single-day order volume currently exceeds 40 million, and continues to maintain strong growth.

Regarding travelling, the new car ideal, represented by Li Auto, is accelerating a new technological revolution. Combined with the rapid iteration of the Internet and technology, Li Auto redefines the concept of “car and home” with the ultimate product, using electrification, AI, and connectivity. It has won the market’s trust, and is, unsurprisingly, currently leading with regards to sales.

Concerning digital content, ByteDance started with information distribution and algorithm content push, and incubated many high-quality internet products, including TouTiao, Tiktok, and Feishu (Lark). At the same time, with efficient organization and management and a global international strategy, ByteDance is becoming a world-class enterprise lauded by Internet users around the world.

Through many years of personal investment, hard work and growth, Source Code Capital’s portfolio companies, Meituan, ByteDance, Ke Holding, and Li Auto, have become leaders in their respective industries. Among them, the market value of Meituan continued to break new highs this year, while Li Auto and Ke Holding successfully landed in the U.S. stock market. The successful IPO of Ke Holding means that following its “Three Fundamental Drivers” (3×9) investment map, the early layout of Source Code Capital in the pan-residential track will also enter a mature development period. Source Code Capital hopes that with the help of high-quality innovative companies, it can invest in future leaders encompassing a whole range of industries in this digital content era, such as food, clothing, housing, and transportation. Source Code Capital wishes to deliver more high-quality products at lower cost and with higher efficiency, to help people improve their daily life. 

The Entrepreneurial Spirit of Continuous Breakthroughs

Lianjia, established in 2001, engaged in the second-hand housing and new housing transactions, leasing, and decoration business. In April 2018, Ke Holding Inc. was officially launched. Leaving the comfort of the traditional intermediary model, it was determined to switch to a digital platform, and not afraid of the challenges ahead. Much of this is due to the management team’s philosophy based on “long-termism” and an insistence on “doing the difficult but right things.” This “pushing the limits” state of mind is characteristic of a pure entrepreneurial spirit.

At the 2019 Code Class Annual Meeting, Peng Yongdong, co-founder and CEO of Ke Holding Inc., said, “The industrial Internet has too many roles, the process is too long and complicated. There is no SOP for the same set of service procedures. Many organizations are driven by KPIs and do not necessarily see value through time. This is a real issue.

Peng Yongdong said, “The Industrial Internet is an excellent supply-side business. There are only two basic models of supply and demand in the industry. In the first one, supply and demand are independent and separate. In the second one, supply and demand are integrated. Our core focus is the integration of those two basic models into three groups: in the first group the supply and demand are between buyers and sellers, which refers to the business model of separation; the second is the supply and demand between consumers and service providers, and between service providers and brokers, which revolve around the supply and demand of services and the value exchange of those services. This is a business model that also separates supply and demand. The third is unique to our industry. Brokers are a business model that integrates supply and demand. Each broker is both for another broker. Suppliers are also demanders, thus creating a very strong network effect between the different actors. This model is the real essence of the industry. For example, after a broker puts his own housing supply on a shared platform, others can have access to this information, or even be able to cooperate on this housing source basis. This is a true cooperative network, and this is the essence of the industry.” 

For Ke Holding Inc., there are only two criteria for checking whether things are right or not. First, is whether or not they benefit the consumers, and the second, is whether or not the service provider is good for end-users. Their strategy is to do the difficult but right thing. Difficult things need long-term perspective and a realistic attitude.

Ahead of the IPO, Mr. Zuo said in his “letter to shareholders,” that by adhering to long-term values had constantly forcing the growth of the organization, Ke Holding Inc. will go great lengths to ensure that consumer promises are fulfilled, and will constantly explore new “challenging and exhausting” leads, that if successful, will prove to be a huge opportunity.

The management team led by Zuo Hui has an average experience of 10 years. When still in the position of an industry leader, being able to foresee great strategic opportunities for future development, means one must abandon personal pride, and have outstanding efficiency when it comes to implementation. He needs to make every effort to promote model transformation and upgrade, even if it means starting from scratch. This is the most powerful manifestation of an entrepreneurial spirit.

House is home, a treasured aspiration for every Chinese

The basic happiness concept for Chinese people is a house, because it is a home, and the home is the starting point of all happiness. The happy life that every family pursues is like a pearl that Ke Holding Inc. cares for.

As the supply and demand relationship in China’s residential services market becomes more balanced, the real estate brokerage services will generate huge market opportunities. The rapid development of the industry will give Ke Holding even more space to grow. It will also provide help to many Chinese families, by giving them a place to start building their happiness. 

Congratulations again to Ke Holding Inc! This IPO will be a new starting point. We would also like to extend our blessing to all Code Class members and all entrepreneurs. Source Code Capital will continue to work hand in hand with you, to “do the difficult but right thing,” and together, to create enduring real value.

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.

Source Code Capital, as the earliest institutional backer of Li Auto, was its main investor during the A round, and continued to increase its investment and support in subsequent rounds. Right now, its cumulative shareholding value ranks Source Code Capital amongst the two top financial investment institutions backing Li Auto.

Assistance of Code Class

Tesla entered the Chinese market at the end of 2013. Combined with the rapid iteration of Internet and technology, electrification, intelligence and network, and driven by the booming demand in China’s travel market, Chinese new carmakers, rather than traditional auto giants, are the most likely to create the next generation of super unicorns.

Cao Yi founded Source Code Capital back in 2014, and Li Xiang founded Auto Home (the predecessor of Li Auto) in 2015. When Source Code Capital was established, as a leading entrepreneur, Li Xiang decided to join Source Code Capital as a LP (Limited Partner). It came as no surprise when Source Code Capital became an A-round investor in Li Auto after its launch.

Before the IPO, Wang Xing and Meituan owned 23.5% of the shares in Li Auto. Bytedance is also one of its investors, as it invested in Li Auto during the C round. Both of them have become cornerstone investors in the IPO. The strength of Code Class is like the Li ONE model technology: the perfect way to create real lasting value. 

Before the IPO, Li Xiang said, “Source Code Capital has built a cordial and lasting industry connector, Code Class, which creates efficient exchanges between domestic top Internet companies and founders. It has played a major role in introducing Meituan, ByteDance and other investors to Li Auto.”

Regarding the investment into Li Auto, Wang Xingshi from Source Code Capital said, “New cars are a once-in-a-lifetime opportunity. They need to combine many advanced technologies such as manufacturing, batteries, motors, car machines, cloud, and autonomous driving. This new generation of vehicles connects multiple industries together. The automobile, new material development, electrical power, smart terminals, and Internet. Source Code Capital is honored to have accompanied Li Auto for the last 5 years, redefining the concept product of the “car” and the driving experience. Success is verified by the high purchase volume and positive users feedback. We believe that this IPO is a key milestone for Li Auto. Whether from a value creation perspective, or from “traditional product” to creating a “smart technology-empowered car,” or from “sales” to delivering “quality services and experience” to customers, Li Auto is solidly on the path to success.”

In 2016, Li Auto completed its A round financing with RMB 780 million. During the annual Code Class meeting that same year, Li Xiang said, “Essentially, in the past, the entire car market opened two windows directly related to manufacturing. In my opinion, a third window will opened during the next decade, from 2015 to 2025. It will be the result in a change in consumer demand and a change in technology. Electrification, self-driving, and car connectivity, are the three key technology innovations that will announce the era of smart cars. Electrification is the biggest opportunity for new brands to join the market. Self-driving will make commuting a time to read and learn. Connectivity (Internet) will change the whole car/auto business model.”

In 2017 and 2018, Li Auto successively completed its Pre-B and B rounds of financing, and created their first intelligent electric vehicle brand called “Ideal Intelligent Manufacturing.” Then, on October 18, 2018, they proceeded to officially launch “ONE,” the first intelligent electric vehicle (with extended range electric solution). At the 2018 Code Class Annual Meeting, Li Xiang said, “We must ensure that customers are 100% willing to pay for this car. If the customer’s needs are not met, then we should do our best to satisfy them.” In his eyes, capital was only useful to make sure that the customers’ needs were satisfied.

In 2019, Li Auto entered a stage of rapid development. In April, they announced that they were accepting pre-orders for “ONE”. In August, they completed a C round of financing with USD $530 million, and officially began shipping in November. At the press conference of ONE, Li Xiang said that he firmly believes that “technology is a kind of productivity, which can change the driving experience, continuously improve vehicle safety, and revolutionize the extremely inefficient business model currently, making it cheaper for customers to buy and use.”

During an interview in Code Class 2019, Li Xiang said, “In the future, there will be three types of players taking part in the fully automated driving competition. The first is going to be top technology companies like Apple, Google, and Huawei; the second will be Internet companies that master the scene, such as DiDi, Uber, Meituan, Alibaba, etc.; the third will be strong automobiles companies that adapt to survive. In the subsequent integration, the remaining players will probably only be a little more than the top player in the smartphone industry.” Long-term wise, for the company, Li revealed that he hopes that the market value can reach trillions of dollars in 2035, on a 200-300 million users’ worldwide basis. In the past decade, Ideal Auto hoped for “the automotive industry to enter a highly efficient network and systematic management, abandoning obsolete linear management,” and strived to get “a ticket to the competition” in the later period.

In June 2020, the 10,000th ONE was delivered, positioning Li Auto in a strong position by setting a record for delivery. Li Auto has become one of the top players in China’s new energy vehicle industry.

The Entrepreneur’s ideal

Li Xiang founded PaoPao.com in 2000, and established Autohome in 2005, which successfully listed on the New York Stock Exchange. In 2015, Li Xiang started his own business again with Li Auto, a smart electric car brand. He publicly stated that this would be his “last” venture. Regarding this venture, Li Xiang’s main goal is to “improve traffic efficiency through the use of digital technology and achieve the realization of the ideal car and home.”

In addition to his top product capabilities recognized by the industry itself, Li Xiang once said in an internal interview that his learning method is framework-based, and that he organizes learning objects into a framework to thoroughly understand the whole process. He said, “I organize the learning objects into a frame and then aim to thoroughly understand the whole picture.” When confronted with the rise of smart cars, Li Xiang conducts thorough studies in various fields such as technology, organization, and strategic planning, to gradually improve his knowledge on the matter. In order to achieve an ideal, a clear strategy is not enough, excellent execution, rigorous organization and management, are also required for entrepreneurs, as well as a deep connection to the system ecology.

Li Xiang’s three ventures span over the Internet PC era, the mobile era, and the smart era. From IT products, automotive content to new energy vehicles, he maintains absolute compliance with user needs. In order to achieve this, he conducted intense studies on industrial transformation, organizational development, and top-level strategies. Li Xiang possesses the purest entrepreneurial spirit of the new economic wave.

We would like to congratulate Li Xiang and Li Auto one more time. Today is an important milestone on the road to becoming a world-class unicorn company. We would also like to extend our blessing to all our Code Class members and all entrepreneurs. Source Code Capital will continue to work hand-in-hand with you, the tenacious and courageous actors who fight to create enduring real value.