"In the past 12 months, To B investment was the hottest. Many colleagues spend more time in this field, and some used to only watch To C, but now they start to watch To B. "A PE investor who focuses on to B trajectory said.
The capital market is uneven, and To B investment is booming. Whether it is from the financing end of start-ups, to the exit end of investment projects, and then to the investment end of finding projects, the entire track of To B has shown unprecedented enthusiasm.
At the same time, the sound of vigilance about the investment risk of To B is constant. At the previous annual meeting of Zero2IPO, more than one well-known investor said that 2020 will be a very dangerous year in the field of enterprise services.
The past 65438+February was the hottest month, and the following1February was the most dangerous month. What happened on this track in the field of enterprise services?
China VC has always had "debt" in ToB investment.
Dividends decrease and the cycle starts again. In the past two years, the eyes of many domestic venture capitalists have gradually shifted from To C to to to b.
According to the statistics of Zero2IPO, in 2006, 92% of the top 50 enterprises with the most investment value in China were To C enterprises; In 20 18, this figure reversed, and 80% of the top 50 most valuable enterprises were to b.
Judging from the development history of the venture capital market, in the past two decades, a large number of people and capital in the primary market flocked to the consumer Internet field, and many venture capitalists also made a lot of money and rose rapidly. On the other hand, the investment of China venture capital in the field of To B has been "heavily in debt".
"China's venture capital didn't earn much money from corporate services, and the money earned basically came from the consumer Internet. I believe there will be changes in the next ten years. Under the background of increasing artificial remuneration and large-scale application of cloud services, supplemented by the empowerment of artificial intelligence and big data, enterprise services can create more value for enterprises. " Allen Zhu of Jinshajiang Venture Capital said. This investor, who is famous for his C-side project investment in the industry, has been emphasizing his admiration for the To B business in public.
As an investor, this is just a microcosm. Behind it is that in the past two years, the eyes of the primary market have quietly shifted.
Taking Jinshajiang Venture Capital as an example, the number of service projects of 20 18 investment enterprises has exceeded that of consumer Internet. "The layout of our investment in To B is expected to exceed half next year." Yuan Jing Capital partner Liu said. In 20 16, this investment institution in Hangzhou began to lay out enterprise services, and the proportion of To B investment in the whole sector continued to increase.
To B and To C invest in ice and fire from 20 18 to 20 19.
"Consumer Internet companies are very difficult on the road to financing. Everyone says that capital is winter, but in these areas I am responsible for, including hard technology and corporate services, it is still spring. " Ye Guantai, a partner of Qi Ming Venture Capital, also said, "In more than ten years of To B investment, the companies invested by Qiming Venture Capital have performed very well, and most of them can get money with satisfactory valuation at 20 19."
The gradual disappearance of the demographic dividend, the soaring demand for enterprises to reduce costs and increase efficiency, and the resurgence of the hope of withdrawal from the science and technology innovation board are the fundamental reasons why To B investment has become active.
Liu believes that the change at the To B end often corresponds to the change at the To C end. "In the past five years, the population of China 1 100 million has been continuously digitized and online at the front end, forcing the middle and back-end links of the industry to adapt forward, and the opportunities for industrial innovation have been passed back and forth. You can go to the front end to operate the traffic, or you can go to the back end to integrate the supply chain business, and the long tail will aggregate to form a large traffic portal. We are optimistic that such integration will bring opportunities to the upstream and downstream extension of the industrial Internet. No matter where you cut in, entrepreneurs have the opportunity to integrate forward or backward, continue to create value for enterprises, and make their moat wider. "
Investors must focus on the longer-term future. From the comparison of venture capital markets between China and the United States, there are great differences in the layout of investment institutions of enterprise service tracks between the two countries. On the whole, the income of American investors in the To B market is basically the same as that in the To C market. In many investment structures of venture capital in Silicon Valley, To C may only account for 20%, and the remaining 80% is in the field of enterprise services, while venture capital in China is just the opposite.
According to institutional statistics, 50% of listed companies in the United States are To C and 50% are to B (half are trading platforms and half are SAAS enterprise services), while in China, 96% of listed companies are To C and only 4% are to B..
All these indicate that the turning point of China's investment in B is coming soon.
ToB's startup is very fragile.
No matter for entrepreneurs or investors, To B is more bitter than to C.
Wang Xingzeng, CEO of Meituan, once commented on China's to B service. "The companies in China to C are all awesome. The biggest one is Ali, followed by Tencent and Baidu. The companies in to B can't be found, or they are alive, but they live miserably. "
"In China's To B field, startups have to face two major challenges: A round of death or B round of death." According to Xu Siqing, founder of Alpha Commune, for To B enterprises, Round B will become an obvious watershed, and there must be enough good products to achieve scale.
That's true. "20 19 when we were in the most difficult time, we didn't know how to pay employees next month. "A person in charge of B2B e-commerce of FMCG recalled the development of the past year. In the middle of 20 19, they just got financing of1600 million.
"In the future, we have three paths, 99% will die, 0.5% will be acquired, and the other 0.5% will be listed. The probability of our death is very high. We are ready to let everyone burn their bridges and then push the whole result back. " The founder of the above SaaS service provider also said that even if it was established less than a year ago, it took two rounds of financing.
To B is a typical marathon. Yang Shang (pseudonym) left the hotel industry two years ago and chose to start a business with the goal of business travel management.
Looking back to To B's entrepreneurial experience in the past two years, he said with emotion: "Everything that was done to C before was very fast, and it was launched in two or three months, and it was quickly adjusted after user feedback. We know it is difficult to go to B, so we should be patient. It takes half a year to produce the product. As a result, a year later, I found that there was no wool and nothing was formed. "
Even if the product comes out, how to open the market is a difficult problem. In the past two or three decades, the American enterprise service market has been quite mature, and small and medium-sized enterprises have formed the awareness of using software and the habit of paying, even better than the to C industry.
However, for most enterprises in China, the willingness to pay for software or services is still in its infancy, and the lack of ability to pay is a big mountain in front of entrepreneurs in China.
This is also a concern of many investors. "There are two kinds of people who can afford money now. One is a state-owned enterprise with a high salary, and the other is BAT, but there are a few customers in the middle. When we make software for a big company, there are even fewer customers. " Ye Guantai believes that this will be a big challenge for To B innovation.
Another big challenge is that domestic big customers have lower requirements for product functions and higher requirements for integration and customization. "The products of start-ups are often integrated by large enterprises like Ali or Huawei, and cannot be sold directly on their own." He further pointed out.
Nowadays, many customers served by To B enterprises are new economic companies represented by the Internet. For example, one thing Tencent has done in the past two years is to fully embrace the industrial Internet.
2020 is the most dangerous year?
The market is already on fire, and everyone is wondering when there will be SaaS companies with annual income exceeding 100 million in China. But at the same time, 20 19, many people are wary of To B investment.
Especially in the context of macroeconomic downturn, the upstream and downstream of most enterprises will be affected. Who is swimming naked in the To B industry, the answer will gradually surface.
Around 20 14 and 20 15, B2B vertical e-commerce projects are the outlet, and the risks are being exposed. "Many B2B companies undertake some functions to support account settlement, and the gap in account period is often filled by equity financing. Enterprises are so chaotic that they can only rely on financing for blood transfusion, "Liu said.
"2020 is a very dangerous year in the field of To B enterprise services. In the past two or three years, I have seen too many companies doing AI, RPA, SaaS, big data and data. These companies are all rich. They have all expanded and their valuations have gone up. But most companies actually find it difficult to find a suitable landing scene. " At the 19 annual China equity investment forum held by zero2ipo, Li Jiaqing, managing director and chief investment officer of Junlian Capital, also said.
There is a bubble in To B investment. Since 20 18, building an intermediate platform has become a very popular concept, and many startups have emerged in this segment. Some teams can get financing at the valuation of 10 times PS when they are just established, which is very unreasonable for many investors.
"The biggest problem is that a new valuation system has not yet been formed for the To-B industry. Most investments have two valuation systems. The first one is for consumption. It is very dangerous to simply use the accounting method of consumption GNV to the conversion method of transactional To-B, as well as the direct benchmarking of American companies and the differentiation of TO-B in 2020. Investors should reorganize the TO-B system. " Wei Zhe, founding partner and chairman of Jiayu Fund, thinks.
Of course, dangers and opportunities often coexist. From the perspective of growth potential, China enterprise service market is a gold mine to be tapped.
Data show that there were 35 million enterprises in China in 20 17, and the scale of enterprise service market exceeded one trillion. Compared with the United States, China's enterprise service market still has a lot of room for development.
According to Jixun Foo, managing partner of ggv capital GGV, a major theme is the trillion-dollar cloud migration. In the United States, the entire cloud migration has been going on for ten years, and it is a tens of billions of companies. Where are these service companies of China Enterprise Internet Cloud? Will there be such companies in the next five or ten years?
To B is in power, and in 2020, a new investment campaign has begun.