Keytone Ventures:

A case study of ADB Climatech VC Initiative Investing in Clean Tech in China: Approaches and Opportunities
Presentation to Asia Clean Energy Forum 2011

Jin Yi Manila, 06/22/2011 JinYi@keytonevc.com

Who is Keytone Ventures?

A leading China-focused venture capital fund Allocating large percentage of the capital investing in clean tech. Starting investment in 2007 Fund I closed in 2009 with $200m size, with 10+ portfolios Fund II target size of $200m and investing

Who is Keytone Ventures?

Compared with U.S. peers

Keytone is more of a growth capital for our focus on mid market or early-growth investment stage, research driven deal sourcing, targeting high success rate, rigorous investment selection process, small number of deals and high per deal allocation and shorter holding period;

Compared with China peers Keytone is more of a venture for our dedicated technology focus, strong vertical expertise and not focusing on pre-IPO deals.

Team
Founded by Joe Zhou (former Founding & Managing Partner of KPCB China), Stella Jin (former Venture Partner of IDG) and Peng Jin (former Partner of IDG) Built on the spinoff of KPCB Chinas Beijing team

Joe Zhou Founding & Managing Partner

Stella Jin Founding Partner

Peng Jin Founding Partner

Qi Li Operations Partner

Team

Dr. Eric Tao Principal

Dr. Jin Yi Vice President

Mr. Yu Cheng Senior Associate

Mr. Lu Guo Senior Associate

Mr. Jeff Chu Associate

Ms. Winnie Shi IR Manager

Mr. Michael Xu Advisor

Investment Process
Call Reports
Concept Paper

Term Sheet

Investment Committee

Closing

Rigorous Investment Process and Discipline

The Key Tones of Keytone

Strong market presence benefiting from
Partners collective experience and expertise in the VC industry Effective and disciplined execution of firm strategy Commitment to performance

Top investment team

One of the most successful track records in the industry Investment experience in China since the 1990s Emphasis on industry expertise in team building

Proven investment strategy

Growth venture focus: less competition, reduced risk, high return potential Systematic market coverage yielding promising opportunities ahead of the market trend

Uncompromised investment disciplines

Consistent industry and stage focus over the past 15 years Rigorous and thorough internal process

How?
Investment Strategy
Seeks strong proof of business models and execution capabilities, looking to invest before inflection point Invests in companies that passed start-up hurtle

Deal flow
Follows proactive, research driven, systematic market coverage approach Pre-defines investment themes within the four focused industries and build strong vertical expertise Resulting strong, steady proprietary deal flows

Portfolio Construction Selection Process

Focuses on high success rate, relatively shorter holding period Extremely high hurtle, disciplined selection process

Portfolio Management
Emphasizes on hands-on portfolio management to create value for portfolios

Investment Strategy Clean Technology

Focus on clean technology value chains and related services Key issues
Technology viability Team capability Market maturity Operation scalability Capital efficiency

Clean Tech Sectors

5 categories 33 sub categories 78 sub sub categories 90 sub sub sub categories

Clean Tech Sectors with high potentials

Energy Source Solar Clean Coal Building Energy Management Smart Distribution Grid LED Industrial Energy Efficiency Electric Vehicle Water Treatment Wind Coal-bed methane Large Energy Storage Energy System Optimization Smart Appliance Fuel Cell Building Materials Bifuels Hydrogen Geothermal

LED
Key materials Epi Process Packaging

C Capture/Storage

Energy Transmission/ Distribution

Energy Efficiency Industrial Application

Heavy industry System efficiency New business model

Energy Utilization/Conversion

Green IT

EV/Battery
Key performance materials High performace cell design Scalable EV drivetrain developer Scalable BMS component New business model of charging infrastructure High efficiency crystalline cell Better ROI enabler BOS side

Power Battery Air Pollution Control Agriculture

Environment

Solid Waste Treatment

Logistics Project Financing

Goods/Equipment Transportation

Solar

PPA/Leasing/EMC

For Internal Use Only

Portfolio I - Lattice Power

Company
Lattice Power manufactures IC chips for LED lighting products using their innovative manufacturing technology and processes. The company utilizes established fabrication equipment for large volume manufacturing. The disruptive cost structure gives the company the opportunity to be a dominant player in the market within five years.

Investment Rational
Disruptive technology with potential to achieve industry changing cost advantages in a fasting growing multi-billion dollar global market Superior technical expertise in the field built on 20+ years of research and development with 50+ patents filed Strong government support including cheap land, special-purpose grants and favorable tax policies

Portfolio II - SinoWyde
Company
Sinowyde is leading technology company specialized in energy conservation. Utilizing its proprietary technology, Sinowyde helps industrial and power plants realize significant savings in coal consumptions through improving the boiler combustion efficiency. Sinowyde shares energy savings with its clients over a 6~10 year contract period (EMC).

Investment Rational
Over $10 billion addressable market with no significant competitor Unique technical expertise in combustion efficiency and automated controls Highly scalable business model Self-optimizing algorithms feed on actual boiler operating data and provide sustainable technological advantages Over Rmb65 million contracts signed

Deal Pipeline - Solar

High efficiency Solar Cell Manufacturer
Offering high efficiency cell/module that is lead-edge in the industry Device and process innovation that utilizing off-the-shelf process equipment and technology which are mature in semiconductor and solar industry Concept proved with test results from national labs Manufacturing ready to ramp up Experience team with substantial experience in semiconductor and solar industry in both US and China

Deal Pipeline - Battery EV

Battery Key Performance Material Manufacturing
Offering key battery material that substantially improving battery power and/or energy density Technology innovation in mass manufacturing technology in low cost Manufacturing capacity built and concept proved, and ready to ramp up Experience team with experience in large multi-national material/battery companies

Power Battery Manufacturer

Offering power battery for power-tool, electrical bicycle, and electrical vehicle Market leader in electrical bicycle battery manufacturing Innovative manufacturing technology that tailored for power application Experienced team in battery manufacturing

EV battery-pack and EV drivetrain solution provider

Offering battery-pack and control system for electrical passenger car and electrical bus Designed in with two major domestic auto manufacturers Experienced team with experience with world-leading EV manufacturer

Thank You!
Jin Yi JinYi@keytonevc.com