Source Code Capital Closes RMB 3.8 Billion Fund IV to Support New Economy Enterprises Across Stages

VCBeat has learned that Source Code Capital recently completed the fundraising for its RMB Fund IV, raising a total of RMB 3.8 billion. With the completion of this raise, Source Code Capital’s total assets under management have reached USD 1.5 billion and RMB 8.8 billion.

The capital for Source Code Capital’s fourth RMB-denominated fund is primarily sourced from mainstream domestic financial institutions, top-tier fund-of-funds, large listed industrial conglomerates, and market-oriented government guidance funds. Over 70% of the commitments come from existing investors increasing their stakes. Investors’ confidence in Source Code Capital stems not only from the fund’s consistently strong performance—with cumulative exits from its RMB funds exceeding RMB 6 billion and seven portfolio companies going public, including the recently listed Li Auto (NASDAQ: LI) and KE Holdings (NYSE: BEKE)—but also from a shared commitment to the core value of “creating enduring, tangible value.” Looking ahead, these investors will join forces with Source Code Capital and more outstanding new-economy entrepreneurs to drive comprehensive industrial upgrading.

Founding Partner Cao Yi stated, “Although the external environment has been relatively turbulent this year, this fundraising round has proceeded quite smoothly. We are deeply grateful for the broad support from our existing LPs. The new LPs have also enabled us to assemble the seven RMB-denominated LPs known in the industry as the ‘Seven Dragon Balls.’ With their support, we can more sustainably and robustly back new-economy enterprises across more stages of development, empowering resilient and bold entrepreneurs to become leading figures in their respective industries, and allowing the underlying transformations in technology and commerce to bring greater freedom and well-being to people’s lives.”

Over the six years since its inception, Source Code Capital has grown to a team of nearly 80 professionals, achieving specialized division across its investment teams (early-stage and growth-stage investing), post-investment team, and platform team. This structure forms an integrated entity where front-, middle-, and back-office functions mutually support one another and develop in tandem. Source Code Capital has repeatedly received awards from top domestic and international venture capital rankings. Founding Partner Cao Yi has been listed on Forbes’ Global Midas List for three consecutive years, while Partner Huang Yungang was named to the Global Midas Brink List in 2020.

Since its inception, Source Code Capital has established an investment framework defined by “Three Horizontal Axes and Nine Vertical Sectors,” seeking out resilient and bold entrepreneurs in the fields of “Internet+,” “Intelligence+,” and “Globalization+” to jointly create enduring, tangible value. Over six years of shared growth, Source Code Capital and its portfolio companies have navigated the transition from early-stage to growth-stage development. In the To-B sectors of industrial internet, intelligent manufacturing, and robotics, as well as the To-C sectors of new consumer content and channels, new entrepreneurs continue to actively join the Source Code community. Meanwhile, invested companies are progressively completing their exploration and implementation of transitions from the “First Curve” to the “Second Curve,” and even to the “Third Curve.”

Source Code Capital’s investment team has long established a specialized division of labor and seamless collaboration between its early-stage and growth-stage teams. This structure enables the firm to more confidently and effectively increase its investment in outstanding companies and entrepreneurs from the early stage through the growth stage, providing continuous multi-round funding and ongoing support to exceptional founders.

In-depth, long-term industry research and efficient, professional due diligence have enabled the rapid and high-quality execution of investment decisions involving hundreds of millions of dollars. Recent IPOs such as Li Auto (NASDAQ: LI) and KE Holdings (NYSE: BEKE) are exemplary cases of Source Code Capital’s growth-stage investments. The growth-stage team has also invested in B2B enterprises including Baibu, Casstime, Yaoyao, Yijiupi, Yimidida, and Zhongneng United, as well as B2C companies such as ByteDance, Meituan Dianping (3690.HK), Li Auto, KE Holdings, Ziroom, Pagoda, Bloke, and Chayan Yuese. Some of these investments involved continuous capital infusions starting from the early stages, while others were made at the growth stage following extensive long-term evaluation.

By integrating perspectives from both the early and growth stages, we achieve a comprehensive and diversified outlook, enabling more scientific decision-making. This approach ensures that the investment team maintains a holistic view of industry dynamics, development stages, professional expertise, and value assessment, thereby providing portfolio companies at various stages with enhanced support at the board and strategic levels.

As of now, Source Code Capital’s portfolio comprises nearly 200 companies, spanning major sectors such as media content, consumer services, industrial enterprises, finance, retail, automotive and housing, and education and healthcare. Portfolio companies (partial list) include: ByteDance, Meituan Dianping (3690.HK), KE Holdings (NYSE:BEKE); Li Auto (NASDAQ:LI), Niu Technologies (NASDAQ:NIU), RELX, Narwal, Ziroom, Julei New Homes, Huizhaofang, Pagoda, Meili Inc. (NYSE:MOGU), Xin Chao Media, Walnut Coding, Weimai, Huishoubao, Linji, Qinzhu, Cha Yan Yue Se, Wang Baobao; Yijiupi, Yimidida, Yaoyiwang, Baibu, E-Dianzu, Zhongneng United, Keenon Robotics, Chuxin, Yunquna, Ruigu, Casstime Auto Parts, Che300; Qudian (NYSE:QD), Asset360, Woniu Insurance, Ci Finance, Abbots; KrazyBee, Zenjoy/ME2ZEN (KOSDAQ:A950190), BLUE, OPay, among others.

Over the past six years, Source Code Capital has engaged in deep exploration and iteration of its organizational structure. The enhancement of organizational capabilities has facilitated more efficient internal collaboration, establishing a highly effective partnership and professional division of labor between “Special Forces” and the “Arsenal.” The “Special Forces” comprise the early-stage and growth-stage investment teams, while the “Arsenal” consists of professionals from various post-investment and platform functions who empower both the “Special Forces” and portfolio companies.

Through the synergistic collaboration of front, middle, and back offices, entrepreneurs can gain deep insights into industries and entrepreneurship from the investment team right from their initial contact with Source Code Capital. They can experience the post-investment team’s dedicated and heartfelt support, as well as the platform team’s meticulous and efficient execution. This high-efficiency collaboration also fosters mutual assistance, organic integration, and shared growth among colleagues in investment, post-investment, and platform functions.

For example, during the Spring Festival period in 2020, when the COVID-19 outbreak surged, the investment team swiftly assessed the impact on portfolio companies and their urgent needs. In response, the post-investment and platform professional teams urgently launched eight sessions of the “MaNao” series titled “Standing Together Against COVID-19,” addressing topics of greatest concern to enterprises—ranging from epidemic prevention and control, financing, remote work, and policy interpretation to cash flow management—to provide practical solutions for entrepreneurs.

As the pandemic eased, resuming production and achieving growth became the top priorities for corporate development. Many companies in Source Code Capital’s new consumption sector expressed concerns about traffic acquisition to their investment counterparts. In response, the post-investment team addressed these needs by facilitating in-depth communication and collaboration on marketing between portfolio companies in the new consumption sector and ByteDance’s Ocean Engine (Douyin) during the lead-up to the Double 11 shopping festival.

There are many similar examples, including the continuous evolution of the “Code Hui” ecosystem, the initial emergence of the value of IT data capabilities (only the tip of the iceberg), and the fundraising team’s enhanced facilitation of interaction and collaboration between LPs and portfolio companies. The continuous iteration of organizational capabilities has enabled the Source Code Capital team to operate more smoothly and vibrantly, allowing entrepreneurs and investors to perceive Source Code Capital’s sustained innovation and iteration.

With the completion of its new fund’s fundraising, Source Code Capital will continue to partner with resilient and bold entrepreneurs, leveraging the power of technology and capital to drive business transformation and create enduring, tangible value. Cao Yi stated, “At their core, both technology and commerce are about liberating people—granting them greater freedom and making their time more valuable. We have invested in a diverse array of outstanding entrepreneurs and high-quality companies, all of which are contributing to better lives, smarter business practices, greater human freedom, and richer, more meaningful lives. This is the profound value we create together.”