GLP and Sequoia China Close Nearly US$800 Million Strategic Investment in Leading Consumer PE Firm Harvest Capital

SHANGHAI, Aug. 5, 2021 /PRNewswire/ — Following a US$480 million investment from Hongtai Hengye in 2018, Harvest Capital, China’s leading consumer PE firm, closed a strategic investment of nearly US$800 million from GLP Pte. Ltd. and Sequoia China last month.

Harvest Capital, founded in 2007, is a veteran PE firm focused on large-scale consumer-oriented and modern service industries. Over the last several years, the company has developed and followed three key investment tracks: a track which meets the most common yet most rigid expectations of our investors by focusing on livelihood infrastructure companies with deep potential and long-term compounding investment value; second, consumer-oriented growth brands that are responsive to changes in consumer expectations in China’s lower-tier cities; and, third, innovative and iterative companies that are tacitly integrated with technological advances and transformation in traditional consumer industries.

In the view of Song Xiangqian, founding partner and chairman of Harvest Capital, the company abides by certain immutable investment principles that drive the company’s acquisition decisions: "buy industry growth, buy company growth, and buy the learning ability and mental growth of the entrepreneurs that run them". To take it a step further, Harvest Capital believes in the importance of professional empowerment and value creation, and is committed to being not only an investment institution but also a business partner and a co-founder of the companies that it invests in, to grow symbiotically with the companies and brands that it invests in.

"As we let the application of the three principles trigger "buy" signals, we can achieve corporate value growth fueled by the ‘Davis Double Whammy’ effect, and truly create long-term compounding value," Song said. "We are an organization that believes in the compound value of time."

Currently, Harvest Capital has some 20 billion yuan (approx. US$3 billion) of capital under management, with several of China’s renowned brands having been recipients of investment, among them, Chacha Food, Jiajia Food, Zhongyin Babi Food, Home Original Chicken, ORG Packaging, Meituan, Lyfen, Aimer, Eastroc Beverage, Wenheyou, Easyhome New Retail and Taikang Insurance Group.

"The systematic injection of the long-term capital coupled with the capital management capabilities of an insurance company, the global warehousing, logistics and real estate fund management capabilities of GLP and the world-renowned investment capabilities of Sequoia China are a recognition of Harvest Capital as a professional consumer investment institution and a big bet on China’s consumption sector," said Mr. Song, the company chairman, when commenting on the investment. "This round of investment is an important component of the strategy to firmly support China’s economic growth and boost the country’s consumption while enhancing the quality of life of its population through better consumer services. It reflects the determination of like-minded investors to rise together with the growth of both the Chinese economy and of its consumption, as well as their long-termism of being bullish on China. We believe that such a combination of shareholders and resource advantages will greatly enhance the competitive strength of Harvest Capital, making the ‘super training partner of existing champions’ stronger and the ‘business partner of enterprises’ better, while facilitating the growth of China’s consumer service industry."

Leave a Reply

Your email address will not be published. Required fields are marked *