"We have not felt the cold winter and have been very passive in the financing process. Until now, we have never been short of money." The founder of a digital procurement SaaS service provider told the investment community (ID: pedaily2012). After being founded in 2018, the company received two rounds of financing in less than a year, with a total amount of 100 million yuan.

"In the past 12 months, To B investment has been the most popular. Many peers have spent more time in this field. Some of them used to only look at To C, but now they are also looking at To B." A Said a PE investor who focuses on the To B track.

The capital market is unevenly hot and cold, and To B investment is booming. Whether it is from the financing side of startups to the exit side of investment projects or the investment side looking for projects, the entire To B track has shown unprecedented popularity.

At the same time, there are constant voices of vigilance about the risks of To B investment. At the previous Zero2IPO annual meeting, more than one well-known investor said that 2020 will be a very dangerous year for the enterprise service field.

The past 12 months have been the most popular, and the next 12 months will be the most dangerous. What exactly happened in the field of enterprise services?

Chinese VCs have always been "in debt" in ToB investment

Dividends have been reduced and the cycle has restarted. In the past two years, the focus of many domestic VCs has gradually shifted from To C to To B.

Statistics from Zero2IPO show that in 2006, 92% of the top 50 companies with the most investment value in China were To C companies; in 2018, this number was reversed, and the companies with the most investment value On the top 50 sprout list, 80% of the targets are To B companies.

Looking at the development history of the venture capital market, in the past two decades, a large number of people and capital in the primary market have flocked to the consumer Internet field, and many VCs have also made a lot of money and risen rapidly. But on the other hand, Chinese VC's investments in the To B field have always been "unaccountable."

"China's venture capital does not make much money from corporate services. The money they make basically comes from consuming the Internet. In the next ten years, I believe there will be changes. In the context of the increasing number of labor remuneration and In the context of large-scale application of cloud services, supplemented by the empowerment of artificial intelligence and big data, enterprise services can create more value for enterprises," said Zhu Xiaohu of Jinshajiang Venture Capital. This investor, who is well-known in the industry for investing in C-end projects, has been emphasizing his admiration for the To B business in public.

As an investor, this is just a microcosm. Behind the scenes, in the past two years, the focus of the primary market has quietly shifted.

Take Jinshajiang Venture Capital as an example. The number of service projects it invested in in 2018 exceeded that of the consumer Internet. “Next year our To B investment layout is expected to exceed half.” Liu Yiran, a partner of Yuanjing Capital, said. In 2016, this Hangzhou-based investment institution began to deploy corporate services, and the proportion of To B investment in the entire market continued to increase.

The trend of To B and To C investment becoming hot and cold has spread from 2018 to 2019.

"Consumer Internet companies are having a very difficult time financing. Everyone says there is a cold winter for capital, but in the fields I am responsible for, including hard technology and enterprise services, it is still spring." Qiming Venture Partners Partner Ye Guantai also said, "In more than ten years of To B investment, the companies invested by Qiming Venture Partners have performed very well. Most companies were able to raise money at a relatively satisfactory valuation in 2019."

The demographic dividend is gradually disappearing, the demand of enterprises to reduce costs and increase efficiency is soaring, and the Science and Technology Innovation Board has rekindled the hope of exit. These are the fundamental reasons why To B investment has become active.

Liu Yiran believes that changes on the To B side often correspond to those on the To C side. "In the past five years, China's 1.0 billion population has continued to go digital and online on the front end, which has forced the middle and back-end links of the industry to adapt forward, and the innovation opportunities for industrialization have appeared in the process of forward and backward transmission. It can be directed to Front-end operation traffic can also be integrated into the back-end supply chain business, and the mid- and long-tail aggregation will form a large traffic entrance. We are optimistic that such integration will bring opportunities for the upstream and downstream extension of the industrial Internet. No matter where you start, you can start a business. Investors have the opportunity to integrate forward or backward, continue to create value for the enterprise, and make their moats wider.”

Investors must focus on the longer-term future. From the comparison of the Chinese and American venture capital markets, the layout of investment institutions in the two countries in the enterprise service track is very different. Overall, the gains of American investors in the To B market are basically the same as those in the To C market. In the investment structure of many Silicon Valley VCs, To C may only account for 20%, and the remaining 80% is deployed in the field of corporate services, while Chinese VCs are just the opposite.