In Conversation with Frees Fund’s Shen Ying: The Underlying Logic of Early-Stage Cross-Border Investment and the Profile of Next-Generation Global Brands

【Ebrun Original】Cross-border expansion remains one of the few consumer investment segments still favored by mainstream institutions.

Having moved past its early phase of leveraging supply chain advantages, the sector has entered a deepwater era of technology innovation-driven brand globalization, unlocking a long structural cycle of value investment.

From smart fitness equipment that replaces traditional weight training, to smart musical instruments that let beginners experience joy quickly, to medical devices that apply semiconductor thin-film technology to breath ketone monitoring, technology-driven product innovation is flourishing across all categories. As an early investor in the cross-border space with over a decade of layout, Frees Fund has backed many innovative brands in the segment.

In this interview, Ebrun Research Institute invited Shen Ying, Executive Director at Frees Fund, to share insights from an investment perspective on emerging cross-border trends, the potential unlocked by AI, perceptions of brand globalization, and today’s most popular cross-border projects, offering a highly valuable professional guide for entrepreneurs in this era of global expansion.

Globalization of Chinese brands has only just begun

Ebrun Research Institute: Frees Fund is one of the few institutions that entered the cross-border investment space very early. From your perspective, how has cross-border investment evolved, and what phase is the sector in now?

Shen Ying: Frees is among the earliest institutions to invest in cross-border expansion. Our earliest cross-border investments, made over a decade ago, focused on the wave of seller-type projects in categories like apparel and small commodities, built on China’s labor cost and supply chain advantages. At that time, Chinese brands had very little presence overseas, with most players being sellers or exporters of Chinese supply chain capacity.

That phase lasted around five years before the sector moved up a tier. A large number of Chinese engineers and entrepreneurs began to seek opportunities based on their industry and technical expertise, entering new segments from a technology-first perspective. For example, in action photography, where ordinary cameras struggle to capture highlights from extreme sports, some teams targeted this less competitive scenario to build brands.

Later, such innovations spread across categories: from sports, outdoor fitness to pets, smart music, and even more capital-intensive medical devices. The overall trend is moving toward segments with deeper technological moats and higher requirements for consumer trust.

In recent years, we have backed many technology-driven projects in the cross-border space, such as smart hardware and consumer medical products. Teams driving cross-border expansion through technological innovation are a key focus of our current investments.

Our judgment is that cross-border expansion is an irreversible trend. It will not be a decade-long phenomenon, but a very long-term process that will persist for decades to come. The cross-border expansion and globalization of Chinese brands will be a remarkable journey.

Ebrun Research Institute: In your view, what kind of companies have the potential to become the next generation of global brands? What key barriers do they need to overcome?

Shen Ying: Chinese cross-border companies are already very strong, with extremely fast GMV and revenue growth — some have grown from zero to billions in revenue in just a few years. But frankly, they are still very young when it comes to brand building. Compared to European and American brands with decades or even centuries of history, they are still in a very early stage.

There are no shortcuts to building a brand; it requires time to accumulate. Only brands that truly befriend time, stay with consumers over the long term, and continuously create value can gain global recognition. A brand’s capability is only proven when it survives long enough to weather multiple economic cycles.

Ebrun Research Institute: What is your take on the changes AI has brought to Chinese companies’ cross-border expansion? Which cross-cutting areas of AI and cross-border business deserve special attention?

Shen Ying: AI has now become an essential productivity tool and infrastructure. It is used across organizational management, market research, marketing and ad placement, and customer service. Where previously we had hardware plus software, now an AI layer is being added to all software stacks: collect data, build vertical models, and then develop AI Agent services.

AI will definitely become standard configuration eventually. But from the perspective of new entrances and new ecosystems, real disruptive opportunities have not yet arrived. Becoming a new entrance requires deep moats formed by hardware plus AI technology, and the entire technology is still in a phase of rapid evolution. As hardware in major segments collects more data, AI capabilities will improve rapidly. Every vertical consumer segment is a data entry point, and the combination of growing data volumes and AI integration will unlock enormous value.

Ebrun Research Institute: Cross-border expansion faces a complex international environment, with multiple variables including geopolitics, legal systems, data sovereignty, and cultural differences. What risk indicators do you focus on during the decision-making process?

Shen Ying: With the current volatile global situation, we are more cautious about projects targeting a single developing market. Most developing markets face common challenges of political instability and financial system risk exposure, which we prioritize in our assessment.

Against this backdrop, it is a reasonable choice for founders to diversify risks through multi-region, multi-country layout. Compared to developing countries and regions, developed markets such as Europe and the US have relatively better institutional frameworks and security, so focusing solely on these markets is usually not a major issue.

Technology and products must deliver value simultaneously

Ebrun Research Institute: What stages and types of cross-border projects do you mainly invest in?

Shen Ying: We focus on early-stage startups from angel round to Series A.

Our top priority is always people: the quality and track record of the founder and core team, as well as how well the segment’s characteristics fit with cross-border expansion. On that basis, we evaluate products, technology, and overall market trends.

We often talk about timing internally — you have to invest in the right thing at the right time. Investing in apparel and small commodities was the right move ten years ago, but now we need to focus on new categories. Even if we look at those same categories now, the specific investment targets would be completely different.

Team background on, we hope the team has technological barriers, and preferably also capabilities in marketing and other areas. We put more emphasis on the combination of technology and products, because there is a gap between technology and a marketable product, and both are required.

Ebrun Research Institute: Do you focus on specific sub-segments? Are there any requirements for the market size of the segments?

Shen Ying: We value the ability to build unique moats and create value in specific areas more than purely chasing the absolute size of the market. Of course, the market cannot be too small or too niche — for example, a product that only serves an extremely specific niche demand of a certain age group may have a limited ceiling. But we do not take large market size as a mandatory prerequisite for investment; we do not require segments to be as large as the automotive or mobile phone markets.

Some small and medium-sized sub-segments, even entirely new categories built from scratch, are very good investment targets for us. Take Shokz’s bone conduction headphones, for example: the category was extremely small a decade ago. Insta360’s action cameras and DJI’s drones also created entirely new categories from nothing — these are the types of opportunities we like most.

Even for the most niche segments, the global market size will almost always exceed our internal threshold. So we focus more on growth potential, rather than defining the future by current market size.

Ebrun Research Institute: You mentioned that Frees has backed many technology-driven projects. What specific technologies are you referring to?

Shen Ying: Let me give a few examples. One is smart fitness brand SPEEDIANCE. Strength training is a very old industry, where traditional equipment uses iron plates to generate physical weight. The SPEEDIANCE team replaced iron plates with electric motors, reinventing the traditional approach to strength training and enabling digitalization, which has now been augmented with AI.

Another example is the smart musical instrument segment we invested in, where intelligent technology is used to rebuild guitars and drum sets. Traditional instruments produce sound through resonance chambers, but these teams have completely redesigned the underlying structure, using sensors and supporting technology to generate music — essentially reengineering the guitar from the inside out. Even someone who has never played the guitar can pick one up and play a song in a few minutes, greatly lowering the barrier to learning a musical instrument.

Recently, we also invested in a consumer medical project that applies thin-film technology from the semiconductor industry to medical monitoring. Take breath ketone testing, for example: ketones are present in blood, urine, and breath, and testing previously required blood or urine samples, which was inconvenient and had high barriers. Now, users can get results close to the gold standard of blood tests just by blowing into a device, allowing them to track their fat-burning efficiency at any time.

Ebrun Research Institute: Are there any universal technological iteration opportunities?

Shen Ying: For example, the entire automotive manufacturing industry, from electric motors to LiDAR, sensors, and intelligent driving systems, is a giant sector that will drive a series of upgrades in the broader supply chain. Technological iterations in electric motors, sensors, LiDAR and other areas will spill over into other fields, such as smart home appliances.

Industrial iterations in the largest consumer sectors will usually bring huge improvements to the entire consumer track. So we look at which niche consumer scenarios these technologies can be applied to.

Entrepreneurial opportunities vs. lifestyle business opportunities

Ebrun Research Institute: Many institutions now also look for profitability even in early-stage projects. Do you focus on revenue and profit metrics and exit paths?

Shen Ying: For early-stage projects, we generally do not require companies to prove themselves in terms of revenue and profit before investment — those are post-investment requirements, not pre-investment indicators. But being able to generate revenue and profit at an early stage is a big plus.

We will evaluate whether the project is ultimately a lifestyle business opportunity or an entrepreneurial opportunity. We definitely want to invest in entrepreneurial opportunities, which require relatively imaginative exit potential.

If a segment allows for the formation of a leading brand with rapid growth, it is an entrepreneurial opportunity. If the segment itself is decentralized and fragmented, with many small independent players, it leans toward a lifestyle business.

Ebrun Research Institute: What are the most frequently mentioned terms and cross-border hotspots you have heard in the capital market this year?

Shen Ying: The main one is AI, followed by embodied intelligence, world models, and more cutting-edge areas such as quantum technology and commercial aerospace.

Cross-border hotspots include maker economy, with 3D printing, laser engraving, Tufting and other maker directions gaining huge traction. Another hotspot is fitness sector, covering both aerobic and anaerobic exercise — HYROX, for example, is very popular this year. Overall, cross-border expansion has become an all-encompassing major direction, no longer concentrated in just a few segments as in the past, but flourishing across the board.