When Wang Jun was asked by Fosun International Ltd, a Chinese conglomerate, to head a new venture capital fund, he accepted with barely a second thought.
“Fosun needed VC funding to perfect its asset management platform and discover new strategies and business models. Venture capital investment is my passion, and I knew there would be big opportunities, especially at a time when China’s macro economy and its larger industries are changing so dramatically,” said Wang.
With spells at Peking University, Illinois’ Kellogg School of Management, followed by McKinsey & Company, CDH Venture — an arm of one of China’s biggest asset managers CDH Investments — and finally working as president of the US listed Xueda Education Group, Wang has an impressive pedigree.
He was asked to set up Fosun Kinzon Capital with three other partners at the start of 2013, with the aim of becoming a global VC fund focused on “Internet Plus” — the new business model that combines the Internet with traditional industries.
The VC arm now has 36 people in offices in Beijing, Shanghai, Shenzhen and Silicon Valley in the United States.
“I was immediately on the lookout for hardworking, smart and cool people from diversified back grounds, when we were setting up the team,” said Wang. But his most important conditions were a willingness to learn, an ability to handle constant change, and a passion for startups and entrepreneurship.
Wang said he has entrenched a democratic decision making culture in the company, to encourage young people to show case their abilities, and to encourage innovation.
“Venture capital investment is a very personalized thing, and democratic decision making is the only way to ensure we have a wide portfolio of good companies,” said Wang, adding this is not an organization top-heavy with over-bearing managers.
There are six people in Fosun Kinzon Capital’s investment decision making committee, including himself running Kinzon Capital, with three others from the parent company involved, including Fosun International Ltd’s Chairman Guo Guangchang.
“If I was to summarize Fosun Kinzon’s direction and strategy, it would be aggressive and decisive,” said Wang.
Fosun Kinzon has two funds so far under management: a yuandenominated vehicle worth 800 million yuan ($125.4 million), and a dollar denominated one worth $200 million.
The funding of both came directly from Fosun, but it is now financing a new yuandenominated fund worth 600 million yuan, and another dollar-denominated one worth $250 million in which the investor base will be more diversified.
Since being formed, the two launch funds have invested in 36 deals at home and abroad, worth a total 1.1 billion yuan.
Those have included United Statesbased Scanadu, a Silicon Valley company that makes handheld multisensor mobile health devices and personal health data platforms; Guahao.com, China’s largest online hospital registration booking system, medical treatment and health care service platform; and HEcom, a leading domestic mobile sales management solution provider for small and mediumsized enterprises.
Six of its investment targets are due to be listed on the National Equities Exchange and Quotations, China’s third national equity exchange which is popularamong microsized, small and mediumsized companies, by the beginning of 2016.
“We generally look at some types of ‘Internet Plus’ deal: service commerce (or onlinetooffline), business to business, digital entertainment and artificial intelligence,” Wang said.
So far, finance, healthcare, education, travel, automobile and real estate sectors have been the most successful at generating new investment opportunities.
He reckons in the past too much venture capital investment went into business to consumer companies instead of business to business services, which have actually proved far more lucrative, and more beneficial to small and mediumsized enterprises.
The most recent figures from Zero2IPO Research Centre show there were 613 deals completed by Chinese venture capital and private equity companies in the first half of this year, worth a total of $16.4 billion — a 33.6 percent rise compared with last year.
Investment in the Internet sector was the most popular, followed by information technology, according to its findings.