BEIJING, CHINA - 10/02/2017 — The Belt and Road Initiative (BRI) is bringing a new era of globalization and huge opportunities to venture capital projects in China. Previously known as the “One Belt One Road” (OBOR) project, the vast BRI network encompasses countries between China and 65 other countries along land and sea routes from Malaysia to Eastern Europe, which account for 30% of global GDP. Already, US$900 billion is committed to infrastructure networks, leading to considerable economic development in other industries.
“BRI focused cross-border businesses will thrive in the next decade, especially those who can catch the next wave of the emerging middle class consumption, and possess strong business backgrounds and high execution capacities,” says N5Capital founding partner Will Jiang.
Top Chinese venture capital firm N5Capital is already capitalizing on the BRI opportunity by focusing on start-ups that best utilize mobile as an infrastructure to disrupt traditional business productivity. N5Capital’s portfolio of over 60 companies includes Transfereasy, a leading online cross-border wiring, FX and settlement provider, which significantly simplifies payment through an automatic application, verification and compliance check for cross-border businesses. Another portfolio company is Hot & Hot, a leading crawfish delivery company, which acquired upper stream supply chain from Egypt at low price and high quality. Since then, it has claimed over 50% of Beijing online crawfish market. Another portfolio success is Microsslink, a company that connects with Chinese Customs system with its technology and system, which greatly improve efficiency to clear through customs.
“Mobile technology and the internet are challenging traditional business models and creating winners for Belt & Road Initiative focused businesses”, says Will Jiang.
What does the BRI mean for investors?
Venture capital opportunities are abundant but speed and timing are critical. Industries and sectors will be reshuffled and evolve with the overlap of government incentive and tech advancement. Investors should pick the entrepreneurs who have really been in the business and can generate revenue from the first day, and those who are willing to disrupt the traditional business with the mobile tech and infrastructure. Pure technology-based opportunities still deserve attention but may take a while before taking off, such as VR & AR, etc.
“Investors should partner with VC firms with a successful track record of selecting companies that take advantage of the Belt & Road Initiative in the coming years”, advises Will Jiang.
N5Capital is a Beijing-based leading venture capital firm. Its investment philosophy targets early stage Chinese businesses in the consumer sector and industries that utilizes content generation, mobile technology and the Internet to improve productivity and gross margins. N5Capital is the only early stage USD venture fund in China to specializing in the internet, big data and the cloud’s disruptive convergence with consumer sectors. Founded in 2013 by Mr. Will Jiang and Mr. Weiguo Zhao, N5Capital currently manages two RMB funds and one USD fund, with total assets under management of $350 million USD. In 2016, N5Captial was awarded the Top 20 Early Stage Venture Capital Firm in China.
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