By WU Rong

Tiantu Capital, the venture capital firm behind buzzy consumer brands including Naixue (previously Nayuki) and Chinese Instagram equivalent Xiaohongshu, has been approved by the Hong Kong Stock Exchange for an IPO. If everything goes as planned, it will be the first venture capital firm from China to be listed in Hong Kong. The IPO was first announced in May. The fundraising target then was US$500 million. 

Tiantu, founded in 2002, has been in the spotlight in recent years for having invested in some of the most internet-famous consumer startups. CEO FENG Weidong once described his strategy as choosing “fast-growing companies in big, fast-growing consumer categories.” 

Bragging or not, Tiantu does a knack for picking publicity generators. Its brands are known for having the longest queues (Naixue, the bubble tea chain), generating the weirdest controversies (Chicecream, the 40 yuan ice cream that does not melt), or simply having a store on every block (Chayan Yuese, occupying almost every street corner of Hunan’s capital city Changsha).  

According to the prospectus, Tiantu has 222 companies in its portfolio – 180 in the consumer sector – about a third of which have doubled in valuation since Tiantu got involved. Many have gone public. Four are waiting for approval. 

Tiantu made 2 billion yuan in revenue in 2021, an 18.6 percent decrease from the previous year. The company attributed the decline to the non-asset management business suffering from the pandemic. 

Less than 500 funding deals of consumer brands took place in the first half of this year, only two-thirds of the number a year ago. It has been even quieter in Q3 with only 173 deals. 

Tiantu said in May that it is trying to pivot to "consumer technology" instead, and has been cautious about money sinks that rely too much on web traffic but show no possibility of scaling up. In the venture capital circle, the rhetoric has been to focus on "innovation" and find companies with technological advantages.

Tiantu made 15 investments this year, covering entertainment, healthcare, the metaverse and retail.