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Gobi's Michael Zhu: In 2019, Pursue Valuable Investments

In 2018, the capital market changed dramatically, and financial institutions, investors, and enterprises alike faced a lot of challenges. The private equity industry, which has developed rapidly over the past 10 years, is facing unprecedented issues to do with valuations, exits, capital, and assets. 

Although one company after another has successfully been listed recently, the venture capital community has felt the slowdown in the flow of capital. Enterprises "bled", and online travel companies were collectively shutting down; many companies had difficulty fundraising. All in all, 2018 was a "baptism of fire" for many companies, and exposed the industry's general troubled state, as well as the bubble that is present. 

Thus, if the environment is changing, how do investment institutions find high-growth startups in the new year? What are the trends and opportunities available in the early to B series stages? What are the potential sectors for foreign investments? With these questions in mind, PE Daily interviewed Michael Zhu at the annual "Financing China" summit. 

As a veteran venture capital firm that was established nearly 17 years ago, Gobi Partners continued to keep up a steady stream of investments in startups in 2018: 41 new deals were made at a total investment cost of US$61 M, and 7 exits were achieved. In terms of cash returned to investors, the firm was able to give back US$126 M to their Limited Partners. 

To achieve these accomplishments in the past year, Michael has maintained a rare and calm overall vision for the firm. He stated frankly that the demographic and capital divides are gradually fading. After the troubles of last year, the situation for entrepreneurs and investments has indeed become relatively difficult. However, opportunities in China continue to exist, although the methods to be used to take advantage of them change. 

In 2019, Gobi Partners will continue to take advantage of their existing strategy and their regional coverage, and continue to strengthen itself by pursuing investments in deep technology, FinTech, and the startup ecosystem.