Which market makes the most money? Tencent tells you!

[[127236]]

The Investment and M&A Department is one of the most mysterious departments within Tencent, and also one of the most powerful departments. With a team of no more than 20 people, it has invested a number of investments and funds that are envied by the industry in just a few years. This year, Tencent's Investment and M&A Department has focused on four vertical industries: O2O, healthcare, tourism, and e-commerce, and will continue to show its prowess.

In the atmosphere of "mass entrepreneurship and innovation", Tencent, which compares itself to an Internet connector, has become more methodical in investment and entrepreneurial support.

On January 31, the "Tencent Entrepreneurship Training Camp" jointly organized by Tencent and 21st Century Business Herald and co-organized by the MBA Center of Lingnan College of Sun Yat-sen University opened at Sun Yat-sen University in Guangzhou. A person from Tencent's investment and mergers and acquisitions department revealed that this year Tencent's investment will focus on four vertical industries, including O2O, medical health, tourism, and e-commerce.

"These four markets are all trillion-level markets, and Tencent hopes to connect with the best projects in these markets in the A and B rounds." The person from Tencent's investment and mergers and acquisitions department said that China's current policies and environment are very conducive to entrepreneurship, and China's entrepreneurial atmosphere is also quite strong.

The investment team has less than 20 people

The Investment and Mergers and Acquisitions Department is one of the most mysterious departments within Tencent. It rarely accepts media interviews. The outside world can only get a glimpse of it from the big transaction cases that are constantly disclosed.

In fact, Tencent's investment efforts are closely related to its strategic shift after the 3Q war. In early 2011, Tencent announced the establishment of an industry win-win fund, with an initial scale of 5 billion yuan, and the investment scale has been continuously increased since then.

According to Tencent insiders, the Industry Win-Win Fund and the Investment and M&A Department are two different brands with the same staff. Currently, the Investment and M&A Department is the main one. This department has no more than 20 people in total, and is divided into different groups. Investment projects are generally divided into strategic and early-stage projects. Among them, strategic project investment focuses on strategic positioning, and generally the investment amount is large, such as JD.com and Dianping.com. Early-stage projects are mainly A and B rounds, hoping to participate in the early stage of the startup company.

Compared with its well-known strategic projects, most of Tencent’s early investment projects have not been disclosed to the public.

"Angel investors are currently rarely involved." The person said that the reason is that it is difficult to judge early-stage projects. "For projects that are too early, our capabilities are currently insufficient." In Tencent's layout, the function of discovering early projects is currently mainly undertaken by Tencent's open platforms, entrepreneurial bases, etc.

At the Tencent Entrepreneurship Training Camp event on January 31, a person related to Tencent Investment revealed that this year Tencent's investment and M&A department has identified four major vertical industries: O2O, healthcare, tourism, and e-commerce.

The person believes that each of these four areas is a trillion-dollar market, and after being connected to the Internet, a large number of promising startups will inevitably emerge.

Specifically, the value of O2O lies in its ability to optimize the allocation of social resources. Wu Hao, the founder and CEO of Zero Line, who gave a speech as an "entrepreneurship mentor" at the Tencent Entrepreneurship Training Camp that day, belongs to this category.

Wu Hao, born in the 1980s, chose to study in Australia after graduating from university and working for three years. He founded "Zero Line" upon returning to China. This takeaway platform, which is popular in Shanghai, Nanjing and Suzhou, received a round B investment from Tencent. This O2O e-commerce platform provides local food, supermarket online ordering, real-time delivery and other services. As of January 2015, it has covered five cities, including Nanjing, Suzhou, Shanghai, Wuhan and Shenzhen.

In an interview with a reporter from 21st Century Business Herald, Wu Hao said that catering companies under the "Line Zero" model can greatly save expenses such as shop rent and service staff in the traditional catering model, and thus use this part of the cost to improve the quality of food and enhance user experience.

Tencent's investment and mergers and acquisitions department believes that healthcare is also a trillion-level market, and China's current medical resources are not scarce. Behind the apparent scarcity is the failure of a whole set of operating mechanisms such as triage, referral, and guidance. Optimizing and adjusting this system is the space for entrepreneurial projects. Guahao.com and Dingxiangyuan, which Tencent invested in, are examples of this.

The growth momentum of the tourism market comes from China's consumption upgrade. Although there are many successful companies such as Ctrip and Tongcheng, tourism service providers in the past mainly focused on products. Future opportunities will shift to people-centeredness and address the needs of a certain group of people, such as parent-child travel.

E-commerce is an area that Tencent once gave up. In fact, Tencent also sold its e-commerce business to JD.com. However, the person in Tencent's investment and mergers and acquisitions department believes that in the era of mobile Internet, e-commerce has ushered in new opportunities, and the focus of competition is no longer the previous traffic aggregation model of competing for SKUs.

Tencent's investment in "CEO Box"

The person from Tencent's investment and mergers and acquisitions department said that from the perspective of early projects, Tencent, as China's largest Internet company, although it has many resources such as traffic, users, and portals, Tencent Investment never uses these resources as a valuation, nor does it regard them as a commitment.

However, from the perspective of supporting entrepreneurs, the value that Tencent Cloud, Guangdiantong, Open Platform and other companies under Tencent Group bring to entrepreneurs cannot be underestimated.

Among them, Tencent Cloud, as Tencent's cloud sharing platform, is good at online analysis of big data. Obviously, its online resources can provide effective guidance for entrepreneurs. At the end of last year, Tencent Cloud upgraded its cloud video solution, paving the way for the entire video relationship chain with open audio and video capabilities. For entrepreneurial teams, they can not only enjoy convenient services, but also master cloud service rights and truly control the status of cloud hosts.

Guangdiantong focuses on "no marketing, no interconnection", and will market traffic based on Tencent Cloud data analysis, and develop multi-channel marketing models such as WeChat, authentication space, O2O and mobile alliance advertising. Based on Tencent's advertising platform, precise targeting has become the most basic capability of performance marketing, which is also the premise of intelligent allocation of advertisers.

Tencent Open Platform helps entrepreneurs online through platforms and traffic, and builds entrepreneurial bases offline to support entrepreneurs. In addition, it has launched the "Double Hundred Plan" to contribute 10 billion traffic to support 100 startups within three years.

In the opinion of the person from Tencent's investment and mergers and acquisitions department mentioned above, although Tencent as an investor will provide as much help as possible to the invested projects, the success of a project is basically determined at the moment the investment is made. The key lies in the team. "It is difficult to change whether a team is good or not, and our principle is non-interference."

The person said that the quality of the team's CEO is the key to investors' assessment. This quality can be evaluated using "three boxes". The first box is the innate factors, namely IQ and learning ability; the second box is the deep-rooted personality, including focus, diligence, integrity and other personalities; the third box is the ability that can be cultivated, which is manifested in vision, leadership and execution. In order to obtain considerable financing, these are the qualities that team leaders must cultivate. Only when the CEO's quality is in place can the entire team's ability be improved.