Since 2010, VC has had 38 investment cases in the field of agriculture, forestry, animal husbandry and fishery in China, with an investment amount of US $ 1.363 billion.
More and more venture capitals are “fleeing to the countrysideâ€, and some of these venture capitals have tasted the sweetness in rural China.
According to the latest statistics from third-party organizations in the industry, as of 2010, VC has had 38 investment cases in China's agriculture, forestry, animal husbandry and fishery industry, with an investment amount of US $ 1.363 billion, several times the total investment in 2009. In 2009, there were 20 venture capital investment projects in agriculture, forestry, animal husbandry and fishery, with an investment amount of 199 million US dollars.
As the Chinese government pays more and more attention to agricultural development and the construction of new rural areas, venture capital no longer focuses only on TMT (technology, media and communications), which is a high-growth area that shrouds too many dazzling auras. At present, venture capital and private equity involved in China's agriculture include Sequoia Capital, CDH Capital, Jiuding Investment, Zhongke Investment Fund, Advantage Capital, Dachen Ventures and many other "gold diggers".
"Agriculture can also make a lot of money"
In fact, some private equity funds and venture capitalists began to focus on agricultural projects as early as a few years ago, and many new venture capital institutions more directly regard agriculture as a strategic investment field.
In November 2010, Qingyun Venture Capital and Hanli Prospect Fund, a subsidiary of Hanli Capital, jointly announced a joint investment of USD 10 million in organic agriculture producer Dolly Farm. "The agricultural industry is just like Chairman Mao said, 'The vast world has great achievements', investing in agriculture will benefit the country and the people." Qian Xuefeng, chairman of Hanli Capital, interpreted this investment move.
Duoli Farm is the largest supplier of organic agricultural products in Shanghai, integrating R & D, planting, production, processing, distribution, sales and after-sales service. Qian Xuefeng believes that "2010 is the first year of the potential release of organic food".
According to data from the Hanli Prospect Fund, the three major characteristics of organic agriculture are urban, ecological and high value-added. In the European and American markets, the consumption of organic vegetables accounts for 15%, and the Asian "Four Little Dragons" (South Korea, Singapore, China Taiwan, Hong Kong, China) organic vegetable consumption accounted for between 7% and 8%, while China's organic agriculture is still very backward, accounting for less than 1%.
"The products of China Linong International Co., Ltd., which is different from Sequoia Capital's investment, are mainly exported, and Dolly Farms pays more attention to domestic demand." Qian Xuefeng further said.
Qian Lifeng's China Linong International Co., Ltd. (hereinafter referred to as "Linong International") has attracted investment from Sequoia Capital, Heiner Asia, and Walden International, etc., and then in Nas, USA on October 28, 2010 Dak went public.
Headquartered in Hong Kong, Linong International is a comprehensive international agricultural company integrating R & D, standardized cultivation, standardized processing, and branded sales of agricultural products such as vegetables and fruits. Its main customers include Walmart and Hong Kong ’s three supermarkets (Wellcome , Parkn Shop, Vanguard Supermarket, Vanguard).
"Don't think that the return on investing in agriculture is low, and if you do well in agriculture, you can make a lot of money," said Fu Zhekuan, a partner at Dachen Ventures.
One of the venture capital ventures that Dachen Ventures is proud of was investment in Fujian Sunnong Development Co., Ltd. (hereinafter referred to as "Sunnong Development") in December 2006. In December 2007, Dachen Ventures once again increased its investment in Shengnong Development.
Sunnong Development was successfully listed on the Shenzhen SME Board on October 21, 2009. "More than 20 times more profit in 2 years." Fu Zhekuan revealed.
The above-mentioned high returns are common to Fu Zhekuan. “Technology-based agricultural companies make a few dozen profits.†Fu Zhekuan said that Dachen Ventures will follow the direction of modern agriculture. It is found that China ’s agricultural technology is too poor and too scattered, which also means that there is a lot of room for future growth, so agriculture was used as a strategic industry at the beginning. "
At present, Jiangxi Huangshang Group Food Co., Ltd. is also a relatively successful investment case of Dachen Ventures in the agricultural field. Fu Zhekuan said, "The development of Shengnong takes upstream aquaculture and deep processing, and Huangshanghuang is more a branded channel."
Some VCs have gradually invested directly in the field of agricultural production from the original raw materials and auxiliary materials for agricultural production. Lingyue Capital's path into agriculture is a case that can be substantiated by investing in pesticide and fertilizer companies first, and then gradually entering more subdivided fields such as planting and aquaculture.
The relevant person in charge of Lingyue Capital said that most of Lingyue's team comes from Fosun Group and has many years of investment experience in the TMT field. But at the beginning of their establishment in 2008, they took agriculture as a main investment direction.
Has “sounded†to find water conservancy projects
Venture capitalists have repeatedly emphasized that the important criteria for screening projects are the management team and business model, and these investors are optimistic that the agricultural industry itself is already preparing for some integration.
The aforementioned person in charge of Lingyue Capital said that many companies involved in the back-end distribution of the industry are learning from the FMCG industry, and they are digging into corners of FMCG companies such as Unity, Master Kong and Wahaha. And many senior management talents are also flowing to agricultural enterprises. The person in charge revealed that a fertilizer distributor in Guangxi, where it is investing, is now hiring the former executives of the former Roland Berger management consulting company.
Qian Xuefeng also said that the founder of Dolly Farm is a "super farmer" with many years of entrepreneurial experience, while the general manager and sales director of Dolly Farm are both graduated from the CEIBS MBA.
In addition, state support and policy encouragement also have a certain guiding effect on their choice of projects.
Although the Central Document No. 1 of 2011 has not yet been issued, Fu Zhekuan said that the new agricultural policy should not have major changes, nothing more than "emphasis on agricultural industrialization."
Fu Zhekuan believes that the government's support and policy for agriculture is very large, and encourages the industrialization of agriculture. To put it bluntly, without the protection of the government, many agricultural enterprises are unable to participate in the competition. "The protection of the state is a necessary prerequisite for us to invest in agriculture. There are many subsidies and many can be exempted from taxation. Some industries have low gross margins. But after not paying taxes, the net interest rate can be very high. "
The Central Rural Work Conference held from December 21 to 22 has delivered the message "Daxing Water Conservancy and Strong Foundation". The aforementioned person in charge of Lingyue Capital stated that they estimated that the state ’s investment in the field of “drip sprinkler irrigation†in 2011 would be tens of billions of yuan. There is currently no leading company in this field in China. The person in charge said that a company that Lingyue Capital had invested in was already in the layout. Although the company was not directly engaged in the water conservancy industry before, the company started as a biological fungus and set foot in bio-fertilizer, which can reduce the pollution of rice straw burning and waste of resources. It has already occupied orders from more than 20 provinces in government bidding and procurement. Strong channel capabilities.
Qian Xuefeng also revealed that he is already optimistic about a company that monitors surface water quality, Shanghai Mowei Environmental Technology Co., Ltd. (hereinafter referred to as "Mowei"). It is reported that Morwell's position is to build automatic monitoring systems and develop corresponding management software for environmental protection monitoring stations and water conservancy departments around the country; to provide automatic monitoring solutions, technical equipment and after-sales service. Mowei has so far participated in the construction of nearly 100 monitoring sites.
Fu Zhekuan also said that he is tracking some water conservancy projects. He believes that when looking at projects, innovation is the most important, including business model innovation and technological innovation. For example, the industrialized farming model developed by Sunnong is innovative and can make live animals into standardized products. "The investment will be the same in the future, and technical companies will use some high-end technology to do some industrial upgrading."
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