Behind the IPO of Mixue Bingcheng, the investment story of Dragon Ball: Consumption, Technology and More

On March 3rd, Mixue Bingcheng officially listed on the Hong Kong Stock Exchange. After the opening, its market value quickly exceeded 100 billion. However, the expectations of global investors for them had already been sky - high before that.

Mixue Bingcheng introduced a total of 5 cornerstone investors. Besides the old shareholders Meituan Longzhu and Hillhouse, it also attracted institutions such as M&G (M&G Investments), Sequoia, and Boyu Capital, with a total subscription of $200 million.

"2097" is Mixue's listing code, referring to their long - term goal - to build a brand that can last for more than 100 years (Mixue was founded in 1997). Some people may think it's just empty talk, but Longzhu, the earliest institution to invest in them, is convinced that Mixue has seriously considered this for a long time.

Zhu Yonghua, a partner of Longzhu, recalled that once when communicating with an executive of Mixue Bingcheng, the other party suddenly asked him, "Have you ever thought about what global level we can reach in this field on behalf of China by 2049, the centenary of New China?"

In the first half of 2021, Longzhu successfully invested in Mixue Bingcheng. This financing caused a sensation at that time. Mixue Bingcheng had just unlocked 10,000 stores and was on the verge of explosive growth. There was fierce competition for shares, and all the well - known consumer investment institutions in the market were involved in this case.

For good investment projects, the opportunity to enter is fleeting. Later, we saw that this was also the only time Mixue opened up financing before its IPO, and Longzhu was the first confirmed leading investor.

In the tea - beverage track, besides Mixue Bingcheng, Longzhu also led a major investment in Guming in 2020. Statistics show that the two are the first and second in terms of GMV in the ready - to - drink tea industry respectively. Guming also successfully completed its IPO last month.

With the update of the listing materials of the two companies, Longzhu - a market - oriented VC initiated by Meituan - was suddenly pushed into the spotlight.

We found that Longzhu's investment story is no longer limited to consumption. In the past few years, Longzhu has grown and evolved into an investment institution exploring multiple fields. Besides consumption, they also focus on AI, robotics, and all cutting - edge technologies.

01

Early - stage Longzhu: Heavy Investment in the Tea - beverage Industry, Three Consecutive Shots

Longzhu's style of making heavy investments can be traced back to its investment in Heytea.

In 2018, Longzhu invested 400 million yuan in Heytea. At that time, Heytea had only about a hundred stores and had just started its national expansion. As a pure financial investment institution, Longzhu had just been established not long ago and had just raised its first - phase fund. The amount of funds was not large, but it still resolutely took the first shot.

Longzhu doesn't "like" to make heavy investments, but rather "dares" to do so when it spots the right track and opportunity.

At that time, Longzhu focused on food and beverages in the large - scale consumption field. Food included buns, dumplings, noodles, and baked goods, while beverages mainly referred to milk tea and coffee. In comparison, the milk - tea track had significant advantages. In just four or five years, the scale of the new tea - beverage market quickly increased from 7 - 8 billion yuan to 30 - 40 billion yuan, featuring a "large audience and rapid growth."

According to 36Kr, when choosing to invest in Heytea, Longzhu initially judged from the brand perspective that Heytea was the "high - point" in the industry.

After investing in Heytea, Longzhu conducted a more systematic study of this industry. They calculated at that time that by 2030, the overall market scale of the tea - beverage industry would reach 300 - 400 billion yuan, similar to the scale of the hot - pot industry, with 400,000 - 500,000 existing stores.

Following this line of thinking, there would not be only one leading opportunity in the tea - beverage industry. Longzhu further divided the tea - beverage market into three price ranges: below 10 yuan, 10 - 20 yuan, and above 20 yuan.

In the below - 10 - yuan range, Mixue Bingcheng had a prominent brand recognition. However, at that time, they had not opened up financing. But Longzhu didn't want to miss the opportunity. After the initial contact in February 2019, Longzhu continuously communicated with them. Finally, in the summer of 2020, they finally received a call from Mixue.

Looking back and summarizing this "project that took the longest time to negotiate since Longzhu's establishment," Zhu Yonghua told 36Kr that Longzhu's successful investment in Mixue was both accidental and inevitable, and it was also fortunate to catch up with the times. "Longzhu is proud to have invested in such an excellent enterprise. It's not about how much money was made from this project, but about supporting the best Chinese company that can truly compete with the best companies in the world on behalf of China."

There were also unexpected discoveries during the market research. In the sinking market, Longzhu noticed Guming. At that time, Guming had only more than 2,000 stores, but "its operation was solid and its products were good." The management of Mixue Bingcheng also praised Guming, which made Longzhu even more determined.

Image source: IC photo

In May 2019, Huang Yaoxin, the managing director of Longzhu, first made an appointment with Wang Yunan, the founder of Guming. At that time, the other party had no intention of financing, but they still maintained high - frequency communication. This is a method for Longzhu to judge projects internally. "If you can't see clearly at one time, just talk a few more times, and talk several times at regular intervals."

In the subsequent communication, this entrepreneur left a deep impression on them. He was low - key in doing things, could describe many business details of the company clearly, was good at calculating accounts, and was kind to employees and franchisees.

From the perspective of the price range, Guming chose a completely different path from Mixue and Heytea. They focused on the 10 - 20 - yuan range, built their own cold - chain supply chain, and sold good products at lower prices in the sinking market.

At the end of 2019, after Guming decided to start financing, it met with major well - known funds in the market. Finally, they chose Longzhu as the leading investor.

Heytea, Guming, and Mixue Bingcheng. In just three years, Longzhu continuously made heavy investments in the same track, which is not common in the large - scale consumption field. It also made Longzhu's investment style clearly recognizable in the industry. However, this is not easy to imitate, as it requires both courage and patience, because the opportunity to make a move may only come in an instant.

"The financing of excellent companies may only be for one round. When they develop particularly well later, they may no longer be short of money, or their valuations are too high to make an investment," Huang Yaoxin said. "Investment often occurs at the moment when a company transforms from a dark horse to a white horse."

02

Not Just Consumption, Betting on the Best Enterprises in the "Category of the Era"

Within Longzhu, there is a term called "category of the era." Simply put, they hope to seize those investment opportunities that can truly define an era.

The tea - beverage industry is such a category. In 2019, Longzhu had already formed a judgment internally that there would be a tea - beverage brand that could reach 100,000 stores. The reason is that most brands would compete in the 10 - 20 - yuan range, and the market concentration was relatively low, while the brand concentration in the below - 10 - yuan range was higher. In terms of market capacity, it was estimated that there would be a volume of 200,000 stores in the below - 10 - yuan range.

Once Longzhu identifies such opportunities in the category of the era, it will firmly make heavy investments. This is not only true for the tea - beverage industry but also for other tracks. In the first five years after the fund was established, Longzhu invested 7 billion yuan in only more than 20 projects, with an average investment of more than 300 million yuan per project.

The courage to continuously make heavy investments is, on the one hand, due to the optimistic outlook on the long - term development of the category. During the investment process, Longzhu also continuously strengthens its ability to discover excellent entrepreneurs.

For example, they found that Mixue Bingcheng not only had low - priced products but also a very low store - closing rate. One of the important reasons was that Mixue's franchise management was very efficient, the procedure for selecting franchisees was very strict, and there were clear requirements for store location and the franchisees' understanding of the local market. At the same time, Mixue had a strong altruistic spirit.

Once, an executive of Mixue Bingcheng told Zhu Yonghua that the space - time efficiency of a certain store was not high. He suggested arranging the stools in the store properly, putting some flowers at the door, pasting some red decorations to "make it look festive," going out to greet customers, and sitting there to say hello more often. Maybe the store's efficiency would increase. Zhu Yonghua said, "The methods they taught were very simple and practical."

In the process of contacting Guming and more projects, the Longzhu team strengthened this judgment. They found that the altruistic spirit of excellent entrepreneurs came from the bottom of their hearts. "Especially when the enterprise encounters setbacks, this value is particularly crucial," Huang Yaoxin said.

Huang Yaoxin believes that Longzhu was lucky to seize the opportunity of the era of offline chains. "It was hard to imagine 20 years ago that a brand could open 10,000 stores in a year," he summarized. Behind the strong chain - building ability is that the entire industry benefits from the continuous improvement of online and offline infrastructure and the rapid improvement of chain - management talents. "We hope to be the supporters behind these most excellent entrepreneurs."

Represented by the tea - beverage industry, Longzhu focused on the food and beverage track for a long time in the early stage. They also invested in brands such as Manner, Adopt a Cow, Xueji Roasted Nuts, and Xiong Daye, and gradually expanded their consumer - investment map. Beyond food and beverages, it extended to clothing, housing, and transportation.

From the perspective of the "category of the era," Longzhu invested in Li Auto in 2019. This investment was initially decided based on the logic of consumption.

"If we regarded Li Auto as a pure technology project, we would not have invested at that time," Zhu Yonghua said. The consideration at that time was that technology should serve consumers, and EV (Electric Vehicle) was a typical product. Investing in Li Auto, first, they recognized its SUV positioning, that is, "a family car"; second, the car was large, "bigger than the Alphard"; third, the extended - range technology route could ensure no range anxiety.

Longzhu invested $25 million in Li Auto's Series C financing. One year later, Li Auto was listed on the NASDAQ. This was the first IPO of an invested enterprise since Longzhu's establishment.

Longzhu's forward - looking judgment on the "category of the era" of EV was more clearly confirmed in the following years. In 2024, the sales volume of new energy vehicles accounted for 40.9% of the total sales volume of new vehicles. In this year, Li Auto's annual delivery volume exceeded 500,000 vehicles, becoming the first brand to reach this milestone and a choice for more family cars.

Li Auto also became the intersection point of Longzhu's investment in consumption and technology. After that, Longzhu's investment map more clearly aimed at the dual - wheel drive of "consumption + technology."

03

Think Big Picture, Invest at the "Inflection Point" of Technological Innovation

Now when the industry mentions Longzhu, it is not only about its investment in consumption. Projects such as Unitree Robotics and Moon's Dark Side also let the industry see Longzhu's professionalism in the field of technology investment.

In 2021, Longzhu established a technology team led by partner Wang Xinyu to systematically look at the technology track.

However, taking this step also had challenges. They needed to spend time explaining to entrepreneurs and LPs why Longzhu also wanted to invest in technology.

"The core is to be optimistic about the industrial transformation brought about by technology," Wang Xinyu said. Compared with efficiency, innovation from scratch is more important. "If the increase from '1 - 10' is 10 times, the increase from '0 - 1' may be infinite." In other words, new technologies not only solve existing needs but also create brand - new opportunities.

Generally speaking, Longzhu focuses on two major directions in the technology field. One is electrification, and the other is intelligence. These are also the major opportunities that occur when there is a generational switch in technology, that is, the world changes from "Powered by Oil" to "Powered by Electricity."

Specifically, Longzhu further disassembles this direction into "three verticals and three horizontals." Among them, the "three verticals" are more technology - oriented, including semiconductors, AI, and energy, while the "three horizontals" are more platform - and scenario - oriented, namely EV, robotics, and hardware. Among them, robotics is the key track that Longzhu Technology focuses on.

Under this framework, they invested in a number of technology - innovation companies such as Unitree Robotics, Moon's Dark Side, Shumei Wanwu, Unisoc, Qingchun Semiconductor, EcoFlow, and Kaye Technology.

Longzhu is also brave enough to place bets on embracing new technologies. For example, in July 2023, they were the leading investor in the A1 round and invested in Moon's Dark Side early on. This was the first time this star large - model company introduced new investors after being incubated by Sequoia Capital.

That was a year of explosive development of large models. Due to the emergence of ChatGPT before, giants, talents, and hot money flocked in, and the industry changed almost every month.

But as early as the end of 2022, Longzhu had clearly determined that large models were a worthy investment direction. Behind this was Longzhu Technology's habit of venture capital - to deeply understand the industry for a long time, establish judgments and cognitions about technological trends, maturity, and time points, and have a global perspective.

"Technology has no boundaries. We need to have a Global Vision," Wang Xinyu told 36Kr. Investing in technology is also investing in people. Talents will flow and regroup. Since the end of 2022, everyone in Silicon Valley has been talking about AI. "They are not interested in anything except AI."

Longzhu's ability to invest in Moon's Dark Side before the industry reached a consensus was also due to its long - term attention to this track and the excellent entrepreneurs in it. According to 36Kr, the Longzhu team had contacted Yang Zhilin early on. They found that this young entrepreneur was not only a top - level scientist but also had in - depth thinking about business, products, and strategies early on. He "thought according to the first - principle" in cognition and was leading in technology, belonging to "the right person in the right direction."

From Longzhu's technology - investment cases, some projects receive heavy investments, while others involve only a small amount of capital participation. However, this is not the only criterion for Longzhu to judge whether it is optimistic about the technological development. The reason is that on the one hand, Longzhu very much hopes to make heavy investments to support the founders to go further. But each sub - industry has its own characteristics, and founders also have