China Pings Silicon Valley Redefine Chinese Tech Startup Ecosystem

Sherrie Wang PeakView Capital

At A Glance of Shengjing Group

Shengjing Group

Biz Training & Consulting

Arm

Capital Management Arm

(Shengjing360) (Peakview Capital)

Biggest Biz Management Consulting Brand for Growth Stage

> 30,000 Customers,

>1,500 Customers listed on NEEQ Market

(National Equities Exchange and Quotations)

10 Billion RMB Valuation

>2 Billion USD Managed (end of 2016)

Biggest China-2-Globe VC/PE FoFs

Invest to >60 Top-tier VC/PE funds

in China, USA & Israel

The Best Chi a I vestors’s I vestor

Fu d’s Portfolio i US & Israel

U.S.A

Israel

Forbes The Midas List Of Top Tech Investors List

4/11/17

To Be Super Hub Bridge China and Global Innovation Ecosystem

Running the Israel-China Accelerator Program for IL Ministry of Economy is the Milestone of SJ Global Ecosystem

Overpraised?

“Expert Market” Nov. 2017 Features including Salary of Software Engineers, Time to Set up a company

Living cost and monthly rent, Growth Rate Index and Output of Entrepreneurship

The Global Startup Ecosystem Ranking

Compass, The Global Startup Ecosystem Ranking 2015 (Unit: 100m USD

Global Unicorn Club with Two Polars

Top 5 Most Valuable Unicorn

Company Valuation Country

Uber $68 Bn USA

Didi Chuxing $50 Bn China

Xiaomi $46 Bn China

AirBnB $29 Bn USA

Palantir $20 Bn USA

215 Unicorns Globally

108 from USA

(Sept., 2017)

Global Unicorn Club with Two Polars

Nov. 21st, 2017

Tencent Exceeded Facebook in Valuation

Tencent’s Valuation 4000 Bn HKD＝522.9 Bn USD

Breakthrough of History

China Central and Local Governments Play Very Active and Key Roles

in Stimulus Policy, Industrial Plan Making and Fund Supporting

China Central Government: National Emerging Industrial Plan

The State Council released national industrial plan: —May 19th, 2015: “Made in China 2025”—Future Advanced Manufacturing

—July 20th, 2017: "A New Generation of Artificial Intelligence Development Plan”

The 13th Five-Year National Development Plan defined “Five Strategic Emerging Industries”

The industrial scale has continued to grow, becoming a new impetus to economic and

social development. The added value of the strategic emerging industries accounts for

15% of the GDP, forming a new pillar of 5 trillion yuan output value scale with a new

generation of Information Technology, High-end Manufacturing, Bio and Medical

Technology, Green and Low Carbon Industry, and Digital Creativity

First National Certified AI Open Platform

Ministry of Science & Technology Nov. 15th, 2017

Autonomous Driving Open AI Platform

Smart City Brain Open AI Platform

Medical Image Open AI Platform

Intelligent Voice Open AI Platform

Shanghai Declaration

Ministry of Industry and Information Technology

Shanghai City Nov. 18th, 2017

1, Work together to build a smart, low-carbon, efficient, comfortable and convenient intelligent network

system with “zero emission, zero casualties and zero barriers”. 2, Jointly increase the innovation of intelligent network car forward-looking and common key

technologies, and establish a common platform for R & D, testing, evaluation and

demonstration of intelligent network car.

3, Jointly strengthen the construction of intelligent network of automotive laws and standards

system, and actively promote the intelligent network of vehicles to expand pilot demonstration;

4, Will jointly explore the collection, collation, analysis and sharing of big data and promote the

application of big data in automobile, transportation, energy and urban development.

Indicating that the state has made a determined effort to think of the intelligent network car as the

most important holder in the era of industrial internet, and will vigorously promote its

development in various fields such as policies, technologies and standards.

Government Leading Fund of Funds

Beijing Sci & Tech Leading FoFs:

20 Bn RMB, will be Released

Shanghai Sci & Tech Leading FoFs:

30 Bn RMB, Released in Sept. 2018

TMT, Biotech, Advanced Manufacture

Environment Protection & Green Energy

China PE FoFs Distribution

(Capital Managed, Bn RMB)

Government

Leading

FoFs 81.4%

State Owned

Group Leading

FoFs 9.9%

Private Capital

Leading FoFs

8.7%

81%

10%

9%

饼图 Government Leading FoFs

State Owned Group Leading FoFs

Private Capital Leading FoFs

Benchmark City

Beijing & Shanghai

2017 Mainland Best Startup City

Beijing Shenzhen

Guangzhou Hangzhou Beijng

Shanghai

Shenzhen

Guangzhou

Hangzhou

Chengdu

Chongqing

Tianjin

Nanjing

Wuhan

Fuzhou

Guiyang

Three Echelons, L Shape

I ter et Co pa y’s Area Base By Sectors and Cities

SC

Shenzhen

Guangzhou

Dongguan

EC

Shanghai

Hangzhou

MC

Wuhan

WC

Chengdu

Chongqing

NC

Beijing

SC

Shenzhen

Guangzhou

Dongguan

EC

Shanghai

Hangzhou

MC

Wuhan

WC

Chengdu

Chongqing

NC

Beijing

I ter et Co pa y’s Area Base By Sectors and Cities-100Bn Level Platform

Communication Application

Social Platform SmartPhone:

HUAWEI, OPPO, VIVO

E-

Com/Payment/Fin

ance

JD,JD Finance

E-Commerce & Payment

Ali,Ant Finance, Alipay

E-Com/Payment/Finance

Tenpay, Wechat Pay

Search

Engine

Platform

SmartPhone:

XIAOMI

SC

Shenzhen

Guangzhou

Dongguan

EC

Shanghai

Hangzhou

MC

Wuhan

WC

Chengdu

Chongqing

NC

Beijing

I ter et Co pa y’s Area Base By Sectors and Cities-10Bn Level Platform

Security,

Software Tool

Top 3 Internet

Video Platform

News Feed

& Portal

O2O

Life Service

AI/Autonomous

Driving

O2O

Life Service

SC

Shenzhen

Guangzhou

Dongguan

EC

Shanghai

Hangzhou

MC

Wuhan

WC

Chengdu

Chongqing

NC

Beijing

I ter et Co pa y’s Area Base By Sectors and Cities- Bn Level

Training &

Educaiton

Independent

Internet

Finance

Live Video

App

Live Video

App

Live Video

App

Mobile

Game

Training &

Educaiton

Independent

Internet

Finance

CHINA

Beijing vs Bay Area，ZGC vs. SV

USA

Beijing

Zhongguancun (ZGC)

Bay Area

Silicon Valley

Beijing: China Startup Storm Center

Four Key Startup Eco Features: Talents, Market, Environment, Capital All Ranked Best among all cities 1，20% Active Tencent Open Platform Developers based in Beijing 2，> 230, 000 university students graduate in a year like 2015 3，Companies successfully raise fund in Beijing, 2X times more than Shanghai 4，>50% China Unicorn ( 1 Bn RMB Valuation) born in Beijing and totally raised 200 Bn USD, including Global Top 5 Unicorn: Didi, Xiaomi both 5, >250 Startup Space, >150 Incubator and university science Park, 50 of them are national level,

1, Going-out Stage

China to Offshore 2, Inviting-in Stage

Offshore to China

Offshore

Inno

Center

(Space)

+ FoFs+

Venture

(Capital)

+

Offshore

Accelerator

(Connection

Servie)

Onshore

Inno

Center

(Space)

+

Landing

China

Funds

(Capital)

+

Onshore

Global Inno

Accelerator

(Servie)

ZGC, Top Leading GIE in China

Peakview-ZGC Co-GP USA Fund

300m USD launched in Sept., 2017

Wit essed y Beiji g’s Mayor in Silicon Valley

Left: Chen Jining, Mayor of Beijing Right: Erik Lassila: General Partner of Peakview Capital

ZGC, Top Leading GIE in China

7 Chi a’s lPO Nu ers Hit a Re ord High

2007 - 2017 Q3 Chinese enterprises both at home and abroad

124

76 99

347

281

154

0

125

219 227

352

118

37 77

129

75 47

66 96 89

64

20

0

100

200

300

400

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 3Q

境内上市 境外上市

till Nov.:385

2017 Leanding Funds in China IPO Market

16 IPO 10.03X Book Value

14 IPO 7.41X Book Value

11 IPO 12.70X Book Value

11 IPO 6.32X Book Value

11 IPO 7.32X Book Value

Israel Innovative Company China Mainland Market China Private Investment

Hong Kong Security Market

HK Se urity Market’s Pote tial for IL High Tech an New Economy Companies

New Israel Fund is being Set Up 100m USD

Fund Investment+ Company Co-investment

China Mobile Internet Growth is Slowing Down

2008-2016 China Internet Users and Their Growth Rates

700m Users 10% Growth Rate

100Bn and 10Bn Platforms With Solid Positioning

E-Commerce Platform

Internet Payment Service

Communication Platform

Search Engine Platform

Car-Sharing Platform

Taking-away Service

News Feed

100 Billion USD

Platform

10 Billion USD

Platform Smartphone

Huge Internet Traffic Entrances Concentrated

Internet Traffic Concentration Make Pure Online Startup Based on Traffic Difficult

More strict and governing policies make content production facing challenges

The disappearance of user market bonuses leads to high marketing cost

Price war is difficult to repeat, Offline has become an important user access channel

China Unicorn Top 300 (2016)

(Valuation > 1 Bn RMB)

China Unicorn Sector Distribution

1, Internet Finance(Fintech): 40:44

2, E-commerce: 37: 36

3, Automotive & Transportation: 26:23 4, Medical & Health 15:21

5, Online 2 Offline: 24: 17 6, Online Education15:14 7, Online Video 9:12

8, Games 15:11 9, Enterprise Service 7:11

10, Hardward 5:9

11, Logistics 8:9

Vertical: Financial, Medical, Enterprise, Transportation Entertainment, Tourism, Intelligent: Artificial Intelligence for Vertical Application

(Automonomous Car, Finance, Medical, Industrial

Deep: Disruptive Technology Hardware +Software New Retail Offline resources activated and integrated Cross-border

Key Word of Future Opportunity

Artificial Intelligence: USA vs China

42% American 1078

23% China 592

Global 2542

The total amount of artificial intelligence start-ups in China and the United States

China and the United States Artificial intelligence Startup in Sectors

China American

Natural language Processing

Machine Learning

Computer Vision and Imaging

Technology platform

Smart Drone

Smart Robot

Autonomous Driving

AI Processor / Chip

Voice Recognition

Artificial Intelligence: Startup Sectors

BAT Investment Map: Finance and Automotive Transport as Main Battlefield

BAT investment in a wide range of areas, and there is a clear cross between each other, but also dabbled in foreign investment M & A.

Baidu actively looks for the next leading opportunity through commercially-available new technologies such as deep learning, artificial intelligence and autonomous driving.

Alibaba is not just an e-commerce company. It has strong competitiveness in the fields of finance, cloud business, big data, culture and entertainment.

Tencent around QQ and WeChat set up a rich life and consumer scene services, rapid transition in the era of mobile games and get the lead.

BAT Investment Map for the First Half of 2016

Tencent

Social Internet Game

Alibaba

Baidu

Tool software

Automotive Transportation Finance

Sports Enterprise

Local Life service Entertainment

Medical health E-commerce

Logistics

Tourism

Hardware

Real Estate Servie

Fintech: Tide of IPO and Regulations Coming

Nov. 21st, Internet Finance Risk Governing Lead Group, Stop issuing license and more governing policies will be issued following

AFTER NETS UNION BEFORE NETS UNION

其他第三方

TraderA TraderB TraderC

其他第三方

TraderA TraderB Trader C

China Nets Union

China Nets Union Clearing Corporation

Payment institutions and banks will be connected to a unified

clearing platform set up by Payment & Clearing Association of China.

Commercial Bankers

3rd Party Payment Service Alipay Tenpay Alipay Tenpay

Consumption Upgrade Opportunities on Internet Emerging

8.

9.5

23.3

24.5

26.6

36.7

36.7

37.6

58.1

0. 15. 30. 45. 60. 75.

Watch video with smart TV / box

Spend more money on digital products

Buy video members to see the play / movie

Personal Consuming Loas

Online takeaway

Mobile phone taxi / car rental

Cross Border Online Shoppings

Offline shoppingr mobile phone payment

Internet-based Consumption Sector Significantly Increased

58.1%

As of October 2016

Online Knowledge Paid Consuming: 8% Smart TV/Box: 9.5% Spend more money on digital products:23.3% Online Video Platform Membership:24.5% Personal Consuming Loans:26.6% Online Takeaway:36.7% Tax/Car Calling with Mobile Phone: 36.7% Cross-border Online Shopping:37.6% Offline Consumer Mobile Payment:58.1%

Top Content Maker Popular and Better Paid

Professor of Economics Beijing University

215104 Subscriptions, 6 million USD/year

BitCoin Early Player How to be Financial Free

Business Consultant Psychological Counselor

Professor of Management Tsinghua University 102344 Subscriptions, 3 million USD/year

Oversea Investment of BAT

0

18

35

53

70

2014First half 2014Second half 2015First half 2015Second half 2016First half 2016Second half 2017First half

Baidu Alibaba Tencent

Global Innovation

Changing

World