By Li Yian of www.eeo.com.cn from Shanghai
"In the investment of any project, we never look at a project individually, just like when you are playing a chess game, the best approach is not to set down a lone piece, instead the key thing is to deploy a complete game, for the sake of uniting vertically and horizontally.” Said by Tracy Ji, Partner of Meridian Capital, when mentioning investment experience learned from past projects.
In August 2014, Meridian Capital joined hands with Shanghai United Media Group, and Oriza Fund of Fund to complete 1.2 billion yuan of fundraising for 825 New Media Industrial Fund, wherein, Shanghai United Media Group and its subsidiary Xinhua Media together contributed 300 million yuan, Fund of Fund Oriza Chenkun under Suzhou Oriza Holdings Co., Ltd contributed 150 million yuan, meanwhile it completed investment in Weimob, miniu98.com projects within six months after setup.
Although projects invested by Meridian Capital, such as eastmoney.com, 25PP.com, adSage, 500.com, and ichuanyi.com projects, are mostly very well-known by the public, it still keeps its own profile low. In the eyes of Tracy Ji, this is associated with the communication feature of Internet and Meridian Capital’s own “small but beautiful” positioning. “Each year we will inspect several thousand projects, currently we are managing over 70 active projects, and 80% of them are related to mobile Internet.”
As early as in 2008, former Investment Director of IDG David Shong founded Meridian Capital in Singapore. As the first private equity investment fund with Chinese background approved by Singapore Economic Development Board (EDB), before 2010 Meridian Capital more often than not used foreign currency fund to finish transaction in its investment projects in China, the size of the first fund was about 80 million Singapore dollars, equivalent to more than RMB 400 million yuan. Nevertheless, restricted by the background and trading complexity of foreign currency fund, listing and exit of enterprises invested by Meridian Capital in China needed to go though overseas channel.
In the second half of 2009, the restrictive policies in China on RMB fund set up by foreign invested organizations began to relax, Tracy Ji took advantage of the opportunity to preside over preparation and setup work of Meridian Capital’s RMB fund, the setup of RMB fund enabled Meridian Capital to develop greater freedom in project selection. From 2010 to 2011, Meridian Capital progressively raised three RMB funds, whose size was close to RMB 60 million yuan. The three funds were respectively registered in Suzhou, Wuxi and Changshu. The RMB 1.2 billion size of the latest phase of 825 New Media Industrial Fund far surpassed the fund size in the past.
In terms of project, apart from adopting vertical classification method similar to those adopted by general venture capital institutions, Meridian Capital also classify projects into traffic entry, cash conversion tool and cultural consumption types based on the attribute of projects being invested.
“The annualized rate of return of past projects in TMT field invested by Meridian Capital in the past predominantly surpassed 50%, growth tendency is a factor that VC values most.” Tracy Ji said, “Accordingly, based on our past experience and judgment on cycle, we will also make very sound judgment in investment, Meridian Capital does not have very large size in VC circle, there is no way to splurge several dozen million US dollars in one deal, therefore by taking into account industry status and our own condition, we will invest projects closer to capital reward, so as to improve our success rate.
