On the afternoon of June 29, CB Insights China held the “Future of Fintech CHINA and CB Insights China Fintech List” summit, and three Yunqi Partners‘ portfolios – 360 Finance, Inc, IceKredit and Xtransfer – were included in the List. Michael Mao, founding partner of Yunqi Partners, held round table dialogues and discussions with corporate leaders, exchanging ideas focused on key topics such as national policy direction, financial oversight, data compliance and applications, as well as financial security and privacy. An abstract of the views discussed is set out below:
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1. The ups and downs of internet finance: Safeguard your capability boundaries and create long-term value
Prior to founding Yunqi Partners, Mao was a financial team leader at IDG, and looked at quite a lot of financial projects. IDG is China’s first VC involved in investing in internet finance. In retrospect, a wave of internet finance took place in China at the time, triggered by two events in the summer of 2013:
The first was Baidu’s USD1.9 billion acquisition of 91 Wireless. That was a landmark event in the internet finance sector as none of the BAT had spent so much money acquiring a start-up previously.
Another was the debut of Yu EBao. It was an industry and financial sector game changer. There were lots of media reports on fintech every day. Coupled with the proposal for “mass entrepreneurship and innovation”, internet finance start-ups became all the rage, and together with O2O, became the two major start-up booms.
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During that time, internet finance enterprises grew very rapidly, and became unicorns in just three to four years. In addition to being technology- and data-driven, domestic policy driven trends were significant as well. Between 2014 and 2016, start-ups in related industries burgeoned, generating enormous economic dividends, but there were poor quality companies as well. As regulatory oversight tightened, a large number of P2Ps imploded, and the fast money bubble burst. Those that ultimately survived were technology-enabled enterprises with sound growth that nourished their businesses, safeguarded their capability boundaries, and created long-term value.
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