Sequoia Capital Partner Wang Cen Understood Wang Ning in 2016
In 2016, Sequoia Capital partner Wang Cen instantly grasped Wang Ning’s vision and provided him with very “honest” advice: to acquire top IP resources as much as possible. This advice essentially formed the core structure of the current strategy of Pop Mart. Wang was even willing to invest 100 million for a 15% stake, which today would be worth 500 times more, but still missed out because of “it”. This article is sourced from Jiangshan Johnson, written by PR personnel and PRREN, and reorganized and rewritten by Deep Tide.
Background Information
Pop Mart’s LABUBU meme coin surged 2000% in two weeks, and Pop Mart is globally acquiring “super IP”, with stock prices hitting new highs.
Everything has already been predetermined; it’s fate, and it is not up to individuals.
(1)
As of the close on June 11, Pop Mart’s stock price was HKD 269.8 per share, with a total market capitalization of HKD 362.3 billion. Founder Wang Ning holds a 48.73% stake in the company, with a net worth of HKD 176.5 billion. This 38-year-old new billionaire from Henan has further widened the gap with the second place.
Let’s briefly outline the development timeline of Pop Mart:
- 2010: Pop Mart was established, opening its first store in Beijing’s Euro-Asia Shopping Center, positioning itself as a trendy toy retailer. It sourced products from other brands but struggled to stay afloat.
- Wang Ning grew up familiar with the “grocery store” and “retailing” model, as his parents ran a grocery store. He started his entrepreneurial journey while studying at Zhengzhou University in 2008, including running a popular “grid store”. After graduating, he opened the first Pop Mart store in 2010, unwilling to work for others.
- 2014: Wang Ning traveled to Japan to seek potential products and discovered the blind box sales model of the Japanese doll “Sonny Angel,” which was popular among young people. He quickly established contact with the brand and introduced it to China, pioneering the “trendy toys + blind boxes” sales model.
- 2015: Sales of “Sonny Angel” rapidly rose in China, generating over 30 million in sales, accounting for nearly one-third of the company’s total annual sales. However, Pop Mart was still operating at a loss. This year marked a pivotal point in Pop Mart’s history, as it clarified its core strategy, which included securing investment and key IP in 2016, propelling it onto a fast track for growth.
The success of “Sonny Angel” proved the vast potential of the trendy toy market. Wang Ning conducted a survey on Weibo, asking fans what other trendy toys they liked to collect. Molly was frequently mentioned in the comments. Wang then traveled to Hong Kong to meet Molly’s designer, Wang Mingxin. After three rounds of discussions, he secured exclusive distribution and manufacturing rights for Molly in mainland China and launched the first Molly Zodiac series in July, which quickly sold out.
From then on, bolstered by the sales success of Molly, Pop Mart entered a rapid growth phase. From 2017 to 2019, the revenue generated from self-developed products based on the Molly character were CNY 41 million, CNY 214 million, and CNY 456 million, respectively. In 2023, MOLLY achieved revenue of CNY 1.02 billion, a year-on-year growth of 27.2%. In 2024, MOLLY’s sales are projected to reach CNY 2.5 billion. Summing these figures, from 2017 to 2024, Molly contributed approximately CNY 4.231 billion in sales to Pop Mart.
Then comes the story of Pop Mart’s current success.
(2)
Although Wang Ning had gradually clarified Pop Mart’s direction by 2015, the company still suffered a loss of nearly CNY 25 million that year (following losses of CNY 14.98 million in 2014 and CNY 2.77 million in 2013). After three consecutive years of losses, Pop Mart was undoubtedly in dire need of funds, and Wang Ning was at his most anxious.
Fortunately, he had basically figured out the direction—agenting high-quality trendy toy IPs and signing exclusive agreements for quality IPs. The growth from the agency of Japan’s “Sonny Angel” was already evident, and the revenue from a single IP of 3,000 confirmed the development strategy that “a hit product is the core competitiveness”.
However, securing the rights to Molly meant that “finding money” was the most critical task in 2016.
In 2015, Wang Ning met Zhou Lixia, chairman of Jinhui Feng Investment.
Zhou invested several million in Wang Ning in August 2015 (the exact amount has not been publicly disclosed; several million is my personal guess, as Zhou’s venture capital firm is relatively small). Even in 2016, when Wang Ning sought to acquire Molly, he still needed to raise funds. After four failed rounds of financing, Zhou Lixia helped raise another CNY 5 million with her investment company’s employees, indicating that the initial investment was likely around that amount.
With insufficient funds, finding money became Wang Ning’s most important task in 2016. Zhou was a benefactor to Wang Ning, utilizing her connections to help Wang raise funds. Public records show at least four attempts:
- Zhou took Wang Ning to a roadshow at Zhenghe Island, where investors and entrepreneurs did not understand the business model, and no one was willing to invest.
- Zhou took Wang Ning to a golf tournament sponsored by Jinhui Feng, attended by several investors. Wang continued his pitch, but still no one invested.
- They went to a large state-owned enterprise for a presentation. Although the general manager of the investment department recognized the potential, it ultimately failed to pass the group’s headquarters’ approval.
- They participated in a show called “China Maker”, where several investors assessed entrepreneurial projects for possible investment; this was Wang Ning’s closest encounter with securing significant funding in 2016.
(3)
Indeed, the encounter between Wang Cen, the partner from Sequoia Capital known for understanding retail, and Wang Ning was pivotal. Looking back at the video from that time, it is clear that Wang Cen deeply understood retail and was spot on with his feedback. He was the investor willing to offer the highest valuation and the most funding to Wang Ning.
Let’s review:
Through his engagement with Wang Ning, one could only perceive him as a seller with a low entry barrier, leading to a rather penetrating question from the judges: What is your core competitiveness?
Wang Ning’s response was that their operational products and services had accumulated over five years, culminating in numerous SOPs. This garnered dual certification from many high-end malls and luxury brands, enabling them to open stores adjacent to high-end brands like LV.
This indeed represented a rare core competitiveness. Additionally, it elucidated why top celebrities like Rihanna and Lisa would attach Labubu to their Hermès bags. Wang Ning aimed to place Pop Mart stores next to luxury brand outlets ten years ago, establishing “Pop Mart” as the best endorsement for trendy toys. Trendy toy figures naturally became companions to luxury bags, appealing to consumers who buy both a bag and a Pop Mart figure, showcasing both wealth and personal taste.
Returning to the dialogue at that time, Wang Ning continued, stating that his second core competitiveness was signing similar creative artists from the two-dimensional IP realm, akin to how Jay Chou stands in music. This included the creator of the Molly IP, Wang Xinming, who truly helped Pop Mart break into the mainstream.
Wang Cen, known for his retail acumen, promptly responded —
Upon receiving Wang Ning’s affirmative reply, he immediately understood Wang Ning’s vision.
Then, Wang Cen provided the highest valuation and largest investment intent from all the investors present — an investment of 100 million for a 15% stake.
Furthermore, when Wang Ning asked how they should utilize the 100 million, Wang Cen continued providing pointed advice — to continue accumulating top IP resources and acquire them outright.
This essentially became the core strategy of Pop Mart today, which has cumulatively signed over 200 top designers and artists globally. IP incubation + trendy toy operations + Pop Mart’s premium channels ensure the hottest trendy IPs, first Molly, and this year Labubu.
Extended Reading
LABUBU meme coin surged 2000% in two weeks, and Pop Mart is globally acquiring “super IP”, with stock prices hitting new highs.
(4)
Today, everyone knows the answer. Yes, although Wang Cen understood well enough and expressed his intent to invest 100 million for a 15% stake, this investment would now be worth CNY 49.6 billion, appreciating nearly 500 times, enough to allow Wang Cen to retire and become a legend in one fell swoop. However, he did not invest.
In recent interviews, Wang Cen admitted that he only understood half of it and did not spend much time learning.
I believe he still hasn’t fully disclosed his true thoughts — the entire process of their conversation in 2016 clearly shows:
- Wang Cen understood Pop Mart very well (two core competitive elements, instantly grasped).
- The advice given to Wang Ning was very incisive, essentially outlining Pop Mart’s current core strategy.
The real reason is that he did not anticipate the degree to which the trendy toy business could grow and progress so rapidly! If he represented the investors and put down 100 million, he would have to bear the risks and responsibilities, or the opportunity costs compared to other investment projects.
Meanwhile, Wang Ning at Pop Mart could not foresee the rapid growth and expansion of the trendy toy business either! However, for him, building Pop Mart to 1 billion, 10 billion, and even trillions is his “everything”, and he intends to keep going. Thus, Wang Ning maximized his share of the lucrative “trendy toy industry”.
But Wang Cen did not, and thus he missed out.
2017: Pop Mart reported revenue of CNY 158 million, with a net profit of CNY 1.56 million.
2018: Revenue reached CNY 514 million, with a net profit of CNY 99.52 million.
2019: Revenue soared to CNY 1.683 billion, with a net profit of CNY 451 million.
From then on, things only improved, and profits kept increasing…
It is said that after 2017, Wang Cen stopped looking for investors. As Pop Mart continued to profit after 2017, more investors sought out Wang Ning, including many top investment institutions and large investors, but Wang Ning invariably declined graciously.
Wang Cen might often sigh in regret late at night…
Yet everything was predetermined; it’s fate, and it is not up to individuals.
