China’s Mobility & Electric Vehicle Companies Investment Landscape
There has been tremendous financial support flowing into the China innovation scene, especially the rising mobility economy. Gao Feng is helping to shepherd the ideas, help build a disruptive business model and execute the disruption to fruition.
In August, the ride-hailing scene turned on its head. China’s homegrown player, Didi Chuxing, had humbled global giant Uber and won the battle for the Chinese market. It was proof that China’s innovation scene is far more robust than the casual outside observer may think.
There has been tremendous financial support flowing into the China innovation scene, especially the rising mobility economy. A particular case in point was Apple Inc’s massive $1 billion investment into Didi in May, which may have accelerated Uber’s decision to give up its dream to conquer the world’s most populous country.
Apple’s pick implies that there was more to Didi than simply copying Uber, and many have noted that by the time the contest ended, Didi had raised more capital than Uber did — which meant for the first time in its quest to conquer the world, Uber could not outspend a local rival.
The aftermath of Uber and Didi’s long, costly fight that reportedly cost the former some $2 billion over two years has seen common investors emerge in both entities in addition to those who were already in both entities before the August announcement.
Not only does both Uber and Didi own substantial stakes in each other now, but so do their investors such as Baidu (China’s answer to Google) and China Life Insurance as well as global investment firms Blackrock and Hillhouse Capital Management, to name a few.
There are many more renowned names with fingers in multiple rising players in China. An Uber investor, Sequoia Capital, is also backing Tesla-inspired NextEV, an electric car start-up which had just opened its Silicon Valley office in October, for example.
Other notable investors in NextEV include Singapore’s Temasek, Tencent Holdings and Lenovo. In turn, Temasek and Tencent are also backing Didi, while Lenovo has placed a bet on luxury rental car app UCAR, whose backers include U.S. private-equity firm Warburg Pincus and the world’s biggest e-commerce player Alibaba Group — the latter also invested in Didi.
The list of heavyweight investors in the local scene goes on and on. It helps, of course; capital arguably enables innovation nearly as much as brains and ideas do. As the massive waves of cash continue, however, the spotlight has also shone on critical but probably underappreciated roles in disruption: consultancy, strategising and problem-solving.
China had previously outlined a goal to have 3 million electric vehicles sold annually by 2025 compared to 330,000 last year. To get there, many start-ups will have to look to the likes of Gao Feng Advisory, a global thought leader with roots in China riding the technological wave in China’s mobility economy and beyond.
Gao Feng represents an essential part of the ecosystem. Innovators and entrepreneurs may come up with great disruptive ideas, but they do not always have the capability to see it through on their own.
Where Gao Feng and its peers come in is by helping to shepherd the ideas, help build a disruptive business model and capabilities if necessary and execute the disruption to fruition. In the company’s own words, it not only help clients ‘design’ the solutions but also assist in implementation, often hand-in-hand.”
So with disruption the name of the game, don’t discount the great Chinese incubator of innovation. And pay attention to the ones who help execute these disruptive innovations too — they might someday be called upon to build up your rival start-up.