Old Friend Cai Haoyu: Valued at 2 Billion Yuan

The game has become popular again.

Wu Meng, a gaming industry guru, has secured another round of financing.

Touzicn learned that XD Inc. announced a strategic investment of $14 million (approximately 100 million RMB) in game company MiAO. The latter is now valued at $264 million (approximately 2 billion RMB).

Born in the 1985s and hailing from Northeast China, Wu Meng dropped out of high school to start his entrepreneurial journey. He is a veteran in the gaming industry and has been friends with Cai Haoyu of miHoYo for many years. Later, at the invitation of Shi Yuzhu, he joined Giant Network and eventually became the CEO. In 2022, he left Giant and founded MiAO. The angel - round investment in that year was quite a sensation, led by Sequoia Capital China, Gao Rong Capital, and Monolith Capital.

Venture capitalists are embracing the gaming industry again. For a long time, the gaming sector was abandoned by the venture capital circle, leading to the collective regret of missing out on miHoYo and "Black Myth: Wukong". In the era of AI, the gaming industry has been given greater scope for imagination, and investors seem to be coming back.

An 85 - post Entrepreneur

From Northeast China, Dropped out of High School

Wu Meng's story has always been a topic of great interest.

Born in a small city in Heilongjiang in 1985, he was a playful and adventurous child who didn't follow the rules. Around 2000, when he was in high school, because he liked Jay Chou, he founded the Jay Chou Chinese website (JayCn) in an Internet café. At its peak, it had over 1.3 million members and became the largest fan community in China.

With such an achievement from his first attempt, Wu Meng soon made an important decision - to drop out of school. At that time, Sina and Sohu were listed on the NASDAQ, and the domestic Internet was booming. "I felt that I couldn't stay in school anymore, or I would miss the opportunity," he said.

In 2005, Wu Meng went to Guangzhou, determined to expand his fan website. With the support of investors, he founded Fanswo, aiming to become the world's largest fan interaction community. However, his first entrepreneurial attempt failed.

Later, through the introduction of Gao Xiang, an investment manager at IDG at the time, Wu Meng formed a new team at Dongwang Pioneer with Li Rui, the COO of Fanswo, and Song Haibo, the founder of Dongwang. They received investments from IDG Capital and Cai Wensheng, the founder of Meitu.

Initially, the company didn't have a core profitable business. Wu Meng, who had always loved playing games, decided to enter the browser - game market. Around 2009, the simulation business game "Business Tycoon" became a huge hit and was the highest - earning browser game that year. Thanks to this game, Dongwang Pioneer's revenue exceeded 100 million yuan and its profit exceeded 50 million yuan the following year.

At the end of 2011, Shi Yuzhu, another gaming legend from Giant Network, approached Wu Meng. At that time, Giant had been successfully listed, with PC games like "Zhengtu" and "Xianxia World" in its portfolio, but its browser - game business was almost non - existent. Wu Meng, who wanted to make high - quality games, didn't refuse and became the youngest vice - president of Giant, an 85 - post.

There was an episode. When Wu Meng left Dongwang, he voluntarily gave up his interests and sold his shares back to the company at the original price. In 2013, Zhangqu Technology acquired Dongwang for 810 million yuan. He once joked that he "missed hundreds of millions".

The pace of change in the gaming world is beyond imagination. After joining Giant, Wu Meng also faced great pressure. Around 2014, he switched to mobile games, creating the casual game "Bounce Balls" with tens of millions of daily active users (DAU) and incubating "Among Us Space" with millions of DAU. In 2020, Wu Meng became the CEO of Giant.

However, two years later, he announced his departure and founded MiAO.

According to the information, MiAO is committed to providing highly entertaining experiences for global users through innovative game products and services. Its first product is an open - world game featuring multiplayer gameplay and is currently in development. The official website states that the founding team has an average of over 15 years of experience in the gaming and Internet industries. Currently, the company is still recruiting game UI designers, development engineers, game planners, and other positions.

In the industry's view, it was only a matter of time before Wu Meng started his own business. "There is no fixed way to start a business. What can kill us must be the waves of the times and the uncertainty in our hearts," he said during an internal sharing session at Giant. He hoped to build a simple and happy company in the future.

Valued at 2 Billion in Three Years

Invested by Sequoia, Gao Rong, and Monolith

Investors are lining up.

The latest development occurred on August 4th, when XD Inc. announced a strategic investment of $14 million (approximately 100 million RMB) in MiAO, acquiring a 5.30% stake. Based on this, MiAO's overall valuation will reach $264 million (approximately 2 billion RMB).

Actually, as early as June 2024, MiAO had a round of financing at a share price of $1.8 per share, with a total financing amount of approximately $27.78 million (approximately 200 million RMB), but the specific investors were not disclosed.

Even earlier, in early 2023, MiAO announced the completion of a 100 - million - yuan angel - round financing, invested by Sequoia Capital China, Gao Rong Capital, and Monolith Capital. At that time, the company had just been founded, and it had already made quite a stir in the venture capital circle.

Digging deeper, XD Inc. has a long - standing relationship with Wu Meng. XD Inc. is a global game developer and publisher and one of the earliest game companies in China to start with browser games. Its founder, Huang Yimeng, is an Internet veteran. He taught himself programming in junior high school and was obsessed with code. He dropped out of Shanghai University in his sophomore year to start a business. His early entrepreneurial project was the well - known eDonkey, VeryCD.

In 2008, Huang Yimeng founded XD Games, and its first browser game, "Heroes of Future Past", became a huge success. In addition to self - developed games, it also has the third - party game download platform TapTap, regarded as the "Chinese version of Steam". In 2019, XD went public in Hong Kong, with ByteDance, miHoYo, Lilith, and Diezhi as its cornerstone investors.

With similar experiences and long - standing involvement in the gaming industry, Wu Meng is good friends with Huang Yimeng, Liu Wei of miHoYo, and Cai Haoyu. Wu Meng has publicly stated many times that Cai Haoyu's success with "Genshin Impact" has greatly promoted the development of the entire industry.

There is also an episode: In 2023, Liu Wei resigned as the non - executive director of XD Inc., and Wu Meng took over. Earlier, in a Clubhouse chat room jokingly named "Shanghai Gaming Industry Bosses Conspire to Teach MiHoYo's CEO a Lesson", Wu Meng, Huang Yimeng, Cai Haoyu, Liu Wei, and others gathered together, which was like the "Spring Festival Gala of the Gaming Industry".

Back to Wu Meng's new project. It can be seen that MiAO has great ambitions, aiming to create a virtual world that combines gaming and social interaction to enrich users' lives and achieve broader interpersonal connections.

Taking a closer look, the new project may be related to AI + gaming. Wu Meng said at a closed - door meeting of Gao Rong Capital that AI has brought unprecedented opportunities to the gaming industry. His long - term expectation for AI is to "generate a Genshin Impact with a single sentence". Even earlier, the MiAO project team published an open - world role - playing language intelligent agent framework called LARP (Language Agent for Role Play) on GitHub, hoping to make NPCs more intelligent through AI.

Simultaneously with the announcement of this financing, MiAO stated that the company had reached another important milestone. It is rare for a company in the early stage of the industry to receive such a high - value investment and valuation. Many listed game companies may not even reach this level, fully demonstrating the market's high recognition of the company's vision and capabilities. It also revealed the progress of the internal confidential testing of the new game, and the results were quite surprising.

After Missing out on miHoYo

Investors are Looking at Gaming Projects Again

"Now, besides AI, we're also looking at gaming projects," an investor told Touzicn this year. They don't want to miss the next miHoYo or "Black Myth: Wukong".

Remember in August last year, "Black Myth: Wukong" emerged and became a global sensation, raking in over 9 billion in sales. However, there were only two investors behind it - YX Games and Tencent, and no VC/PE investors were in sight.

The first investor in "Black Myth" was Wu Dan, the CEO of YX Games and the former vice - president of ZhenFund. As early as 2017, after meeting Feng Ji for the first time, Wu Dan almost immediately signed a contract with the team and invested 60 million yuan. Until Tencent invested in 2021, YX Games was the only investor and the largest external shareholder.

After that, YX Games invested at least another 100 million yuan in the "Black Myth: Wukong" project. Wu Dan was also praised by Liu Wei, the co - founder of miHoYo, as "the strongest investor in the Chinese gaming industry in the past five years".

"Many people ask me how I invested in 'Black Myth'. I really can't answer because the methodology is so simple that there's nothing to say. It's all about the right people," said Wu Dan, the CEO of YX Games. He believes that successful games are made by doing what others can't, and the difficult part is having the courage and patience to do it.

The story of miHoYo is also quite touching.

In 2012, Cai Haoyu, Liu Wei, and Luo Yuhao exhausted their entire 100,000 - yuan startup capital and were rejected by many VCs. In a desperate situation, Song Tao of Sky Networks invested 1 million yuan in this startup team, saving them from a difficult situation.

Years later, "Genshin Impact" became a huge success, and miHoYo became an unrivaled force in the Chinese gaming industry. Song Tao is the angel investor and the only external investor in this phenomenon - level company.

The gaming industry is no stranger to wealth - creating myths and phenomenon - level dark horses. In the past, domestic VC/PE firms also closely followed this sector. However, due to factors such as tightened game licensing and unclear exit paths, many investors withdrew from the market. Eventually, only the strategic investment departments of large companies like Tencent and miHoYo remained.

As a result, VC/PE firms have repeatedly missed out on hit projects, which is a pity.

Changes are quietly taking place. The oncoming AI wave is also transforming the gaming industry. First, AI spent only three hours creating a flight game that became a huge hit. Then, Elon Musk predicted that the first truly high - quality AI video game might be released next year.

Interestingly, Cai Haoyu's new company, Anuttacon, is also targeting AI + gaming. The official website shows that the company will leverage the full potential of AI technology to create new, intelligent, and engaging virtual worlds and AGI products. Currently, its first game is in the invitation - only closed - beta testing phase.

Cai Haoyu said that AIGC has completely revolutionized game development, and it's only a matter of time before this phenomenon fully unfolds.

The gaming industry has always been good at envisioning the future and is naturally compatible with AI, opening up new possibilities for the industry. However, this is still an early - stage exploration and needs time to be verified.

But almost everyone firmly believes that in the era of AI, the next miHoYo will surely emerge in the gaming circle.

This article is from the WeChat official account "Touzicn" (ID: pedaily2012), written by Wang Lu and published by 36Kr with permission.