From finding unicorns to supporting pig-raising software

Wang Donghui, co-founder of Ameba Capital, speaks during 2016 Demo China in Hangzhou, Sept 21, 2016. [Photo provided to chinadaily.com.cn]

Currently the corporate service market in China is as big as $50 billion, while in the US it is $1 trillion. Wang predicted that the Chinese market for corporate services will grow by 20 times in the future.

In an information era, traditional enterprises must take advantage of the internet to improve their efficiency, said Wang, which therefore creates large potential for the SaaS industry.

"A steady SaaS is essential for industries such as healthcare, manufacturing, artificial intelligence, Industry 4.0 and big data," Wang said.

His company's focus will be on SaaS that are deeply integrated with industry chain or greatly improve the information level, said Wang.

Wang cited the investment in Taoshihui, an e-commerce platform targeting China's rural population, as an example. "In the countryside where a smart internet is absent, information upgrade is important." Taoshihui allows rural people to buy or sell products from digital equipment available at their rural service centers.

Another investment he cited was industry chain integration, a SaaS software called Zhuzhibao, which offers software for pig farmers to manage their farms.

To be successful in SaaS startups, the founder should have more than seven years of experience, said Wang.

Wang also shared his perspectives on successful startups: Having a workaholic founder, a leading member with specialty in certain field and an excellent power to implement.

Wang ruled out the possibility of investing in smart hardware, games, or online-to-online apps that offer services from the comfort of your home.

For the second round of funding, Ameba will start later-stage investment in excellent projects, with capital injection in each project may be as high as 15 million yuan to 30 million yuan. "It is hard for a venture capital to find a viable project. We should try to build trust with entrepreneurs rather than an early exit for a simple return."

The first fund of Ameba has invested in e-commerce platform Mogujie, ride-sharing start-up Kuaidi Dache, online education start-up Haizixue, which was later acquired by Dianping.com.

Wang said the success of the first fund could not be copied because it was a result of the rapid growth of the mobile internet of that historic period.

"I would rather say that we invested in that great era, instead of just investing in great products."