BEIJING and SINGAPORE, Sept. 21, 2022 /PRNewswire/ — As the world undergoes an energy restructuring, HIKE Capital, a leading seed fund in China, has committed to seize the opportunities presented in the new era characterized by carbon reduction and digital technology.
Anna Xu. The founding partner of HIKE Capital
“Each generation has its own mission. As part of the great wave of carbon neutrality and the historic opportunity of industrial restructuring, we have decided to be all-in.” Anna Xu, Founder of HIKE, shared at SuperReturn 2022 held in Singapore on September 20, HIKE’s efforts and vision for investment opportunities created by China’s transition to a zero-carbon economy.
Transition to an e-mobility future
With carbon neutrality a new consensus and the most urgent mission, major economies including China have announced massive investment plans that involve upgrading technology and changing consumer lifestyles, led by the booming electric vehicles (EVs).
As the world’s largest automobile market, China is the global leader in the electric vehicle sector – China’s electric vehicle sales amounted to 2.9 million units in 2021, accounting for 61% of the world market.
HIKE had a firm belief in electric vehicles long before it became a popular option in the markets. With the vision, HIKE invested in Chinese electric vehicle manufacturer LiAuto back in 2017 and the company has become a pioneer in the field, being listed on NASDAQ and Hong Kong.
Aside from the energy transition, the auto industry is undergoing another transformation – as Marc Andreessen predicted, the software is eating the world – cars are no exception.
The new generation of electric vehicles strives to offer a rich user experience – a process similar to what the mobile phone market has gone through – digitization and IoT bring permanent changes and those who miss this will ultimately fail.
At the intersection of electrification and intelligence, HIKE explores various modes of transportation, from electric scooters to electric airplanes.
Megatronix, an Internet of Vehicles company in which HIKE made an angel investment, has grown into a unicorn in just four years and now partners with 20 major car manufacturers.
China’s electric vehicles are on track to reach 20% nationwide market penetration this year and are expected to reach 40% to 45% by next year.
“20 years ago, Chinese mobile phone OEMs started to grow; 10 years ago, Huawei, Xiaomi, OPPO made their way into the world; I am convinced that a Chinese name will also become a global brand in the automotive industry,” said Xu.
Zero carbon trials by HIKE and partners
As a signatory to the United Nations-supported Principles for Responsible Investment (PRI), HIKE prioritizes sustainable development and integrates responsible investment practices into its operations.
In line with its investment partners, HIKE has maintained its commitment to environmental, social and governance (ESG).
LiAuto’s ONE plug-in hybrid electric vehicle produces 236.1g of carbon dioxide per kilometer for a total of 35,415kg of emissions over its entire life cycle, less than most NEV SUVs in its class.
Through energy-saving measures such as residual heat recovery and temperature control, LiAuto significantly reduced energy consumption during the vehicle production process, saving 200,000 cubic meters of natural gas, 770,000 kWh of electricity and 460 tons of CO2 emissions per year.
Halara is another good example of how ESG and digital are driving change across the supply chain. As a new player in this field, Halara has significantly reduced product waste through the use of innovative eco-friendly fabrics and reduced inventory turnover to 35 days with digitized factories in China, compared to 100 days for its main competitors.
HIKE also invested in AI pharmaceutical research companies such as XBIOME, OnQuality Pharmaceuticals and Artivila Therapeutics to explore how digitalization and AI can support drug research and development, with long-term contributions to human health and well-being being sought.
“Zero carbon is the action that needs to be taken to overcome development bottlenecks. And digital intelligent technology is the key,” said Xu.
HIKE – start-up fund
HIKE was founded in 2015 by those who built their own success from the ground up: Mark Yang, founder of two companies, CARS Group and Ganji.com, both with a market value of one million dollars; and Anna Xu, founder of news app NetEase, a well-known app in China.
“My team and I visited 100 smart factories in China last year. We see the supply side being digitally transformed, the impact of energy shortages and the use of digital production processes in factories. We see that an increasing number of Chinese companies are able to serve the global market,” said Xu.
As a start-up fund, HIKE’s ecosystem includes high-calibre entrepreneurs who can provide core resources to founders and guide them in breaking the boundaries.
HIKE currently manages both USD and RMB venture capital funds focused on investing in consumer upgrades and technology innovation.
SOURCE HIKE Capital