- "The first share of encrypted digital currency" was officially born.
On the evening of April 14th, Coinbase, the largest cryptocurrency exchange in the United States, successfully landed on Nasdaq under the stock code "COIN". The stock price rose to US$429 on the first day of listing, corresponding to a market value of US$112 billion.
Founded in 2012, Coinbase is the largest digital asset wallet and trading platform in the United States. Its main business includes digital asset custody and digital asset-to-dollar transactions. It supports transactions in dozens of currencies such as Bitcoin, and has accumulated over 56 million registered users. , Is the world's largest platform for fiat currency to digital asset transactions, and has a huge influence in the global digital asset industry.
But few people know that IDG Capital invested in the Coinbase angel round as early as 2012 when the blockchain and digital asset industry was still in its infancy. Based on the highest market value of Coinbase on the first day of listing, IDG Capital is expected to reap thousands of times the return on investment.
- 9 years ago, IDG Capital’s magical touch
Counting it down, this is an investment that began nine years ago, when cryptocurrencies were still little known.
In 2012, on YC DemoDay, IDG Capital partner Guo Yihong met Coinbase founder and CEO Brian Armstrong and his team. At that time, even in the United States, the blockchain and digital asset industry was still in its infancy.
"It was a very small project at that time, and we talked about it when we encountered it. It was very interesting. Although I didn't understand it at the time, I was very curious." Guo Yihong recalled to the investment community. Although they didn't know much about cryptocurrency at the time, IDG Capital was keenly aware that this would be a brand new trend, and Coinbase allowed them to see a larger market.
In addition, in Guo Yihong's view, Coinbase founder Brian Armstrong has a big picture and attaches great importance to compliance-this is especially important in the financial services industry.
The development of Coinbase is very fast. According to Coinbase’s first quarter 2021 financial report, its revenue jumped from US$190.6 million in the same period last year to approximately US$1.8 billion, and its net profit increased from US$31.9 million to between US$730 million and US$800 million. 1.3 billion U.S. dollars, with a net profit of 300 million U.S. dollars.
As the first cryptocurrency exchange to be listed on the US stock market, Coinbase brought huge returns to early investors-the angel investor IDG Capital created a return myth.
Since then, the experience has been replicated. IDG Capital has carried out a key investment layout in the field of blockchain and digital assets, and is the most successful institution with the most investment in unicorns in related fields in China and even in the world. In addition to Coinbase, IDG Capital has also invested in the world's largest mining machine developer Bitmain and the world's largest mobile Ethereum wallet imToken, as well as the world's largest digital asset-related license U.S. company Circle, and Japan's largest licensed legal currency pair Liquid, a digital asset trading platform, etc.
- Enlightenment for VC:
Fear of the unknown is the biggest risk in investment
"Foresight", this is a key factor for IDG Capital to capture Coinbase in the angel round. Looking back over the past two decades, IDG Capital’s forward-looking layout for early-stage investment is reflected in various fields.
For example, the hot carbon neutralization right now. Entering 2021, carbon neutrality swept the VC/PE circle, and behind it, electric power, transportation, industry, new materials, construction, agriculture, negative carbon emissions, information communication and digitalization and other fields ushered in a new wave of investment boom.
IDG Capital has seen this trend more than ten years ago. Since 2007, IDG Capital has begun to deploy in the solar energy industry, investing in a number of industry-leading companies including Aixu, Junshi Energy, Kunlan New Energy and Tianhua Solar (listed on NASDAQ in the United States).
Among them, Aishu shares can be regarded as a masterpiece of IDG Capital in the field of carbon neutrality. In September 2019, Aishu, a leading domestic photovoltaic cell company, backdoor ST Xinmei landed in the A-share market. IDG Capital holds 31.08% of Aixu's shares through Yiwu Qiguang Equity Investment Partnership (Limited Partnership), becoming the second largest shareholder after the founder. The equity investment of 900 million yuan that year, the value of equity equity last year reached 900% to 10 billion yuan in market value.
There is also the hot chip investment at the moment, and IDG Capital has ushered in the harvest period by virtue of its early layout. As early as 1997, IDG Capital's first listed project-Fenghua Hi-Tech, was from the direction of advanced manufacturing, and then invested in more than 10 subdivisions in chip design, sensors, integrated circuits, semiconductor equipment and other fields The industry's leading projects, and more than half of the companies have or will be listed.
There are many classic cases among them. For example, when domestic institutional investors seldom pay attention to the chip industry, IDG Capital participated in the A-round financing of VeriSilicon shares in 2002, which was also the first round of financing of VeriSilicon shares. In August 2020, VeriSilicon successfully listed on the Science and Technology Innovation Board. In December of the same year, BES Hengxuan Technology officially struck the bell, and IDG Capital was the founding investor of BES Hengxuan Technology.
To sum up, VC not only needs to pre-judgment before the wind outlet, but also has the courage to dare to try. Especially early investment requires a game with the unknown, and the risks involved are self-evident. But looking back on the investment history of the past, Guo Yihong believes that if you miss a bet on new opportunities and new trends because of fear of the unknown, that is the greater risk.