Hillhouse leads the investment, Yaoji backs it: Can Flash Soul become the next "Kayou"?

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Whether in terms of trading volume or attention, the card market has noticeably cooled compared to 2024.

"Mass consumer interest has been drawn towards the trend of vinyl and plush toys driven by Pop Mart. In contrast, the card industry lacks a leading IP with a driving effect, and the overall market heat has declined," Yang Tangtang, founder of Kayoutianghu, told Xin Feng.

After Nezha’s “overwhelming traffic” gradually faded at the beginning of the year, domestic card competition narratives began to diversify.

Although the pattern of "one giant and many strong players” is difficult to shake, capital from all quarters is accelerating its entry.

In August, FlashSoul announced the completion of its first round of funding, amounting to several hundred million RMB, led by Hillhouse Venture Capital, with Gaorong Capital and Cathay Capital also participating, and Light Source Capital acting as the exclusive financial advisor.

This became the largest publicly disclosed amount of financing in the card track over the past year.

Founded in 2023, FlashSoul has existed for less than two years, but the team background is impressive, co-founded by Yao Shuobin, chairman of publicly listed company Yaoji Technology, and Sheng Chuan, former marketing director of Kayout.

Before this, Yaoji Technology was more well-known as a producer of poker cards.

With the completion of FlashSoul’s financing and the continual coordination of the “Yaoji family” resources behind it, a systematic trendy toy ecosystem layout is slowly unfolding.

Dark Horse in the Card Circle

The rise of FlashSoul can be called a "dark horse" in the card industry.

At the beginning of 2024, the company's cooperation with NetEase’s "Identity V" quickly opened up the market upon launch.

Within less than a month after the product launch, online direct sales channels were sold out—which was only the second product launched since FlashSoul’s founding.

Because leading company Kayout had also achieved success with card products based on this IP, FlashSoul was once referred to within the industry as “Little Kayout.”

However, the two quickly showed significant differences in development paths and strategic positioning.

Unlike Kayout, which focuses on young children’s IPs like Ultraman and My Little Pony, FlashSoul focuses on gaming IPs, forming a clear competitive differentiation strategy.

According to investors, product series such as "Identity V", "Genshin Impact - Genius Invokation TCG," and "Reverse: 1999" have become phenomenal blockbusters, driving the company to achieve exponential growth from 2024 to 2025.

In terms of types, FlashSoul is clearly investing more resources into the TCG (Trading Card Game) track, whose core is collection, deck construction and competition, offering stronger competitive gameplay.

In August 2024, FlashSoul collaborated with Genshin Impact to launch the TCG series “Genshin Impact - Genius Invokation.”

A year later, FlashSoul again worked with Riot Games to launch the physical TCG “Runeterra: League of Legends Battle Card Game” in mainland China, set in the League of Legends universe.

This product is fully designed, developed, and produced by FlashSoul, providing systematic support for key stores, and, together with Riot Games, will invest resources worth over 100 million RMB every year for ongoing market promotion.

Compared to CCGs (Collectible Card Games), which are highly dependent on IP fan-driven sales and emphasize rarity, TCGs focus more on community interaction between players.

In mature overseas markets, TCG is a more mainstream gameplay and has some autonomy in maintaining the player base.

Xie Ziqiang, a veteran practitioner of Chinese TCGs and head of TCG card game “Goalkeeper,” told Xin Feng: “As long as a TCG’s shipment scale reaches a certain level, its ROI performance is very good. At the same time, due to strong user stickiness, product market demand is easy to assess and can grow steadily.”

However, correspondingly, TCGs have higher entry barriers, require greater operational investment, have smaller user groups, and place higher requirements on user payment capacity.

Xie Ziqiang stated that although new TCG products continue to emerge in the domestic market, few truly achieve long-term healthy operations. The core problems are a lack of professional talent reserves and that some companies lack sustainable strategic planning and resource investment.

One of FlashSoul's advantages is that it can obtain coordination and resource support from “brother companies” under the same ultimate controller—Yaoji Trendy Products.

As the Chinese agent for Pokémon TCG and Disney Lorcana, Yaoji Trendy Products possesses broad card channel resources and a mature event operation system.

According to the official statement, Yaoji Trendy Products will act as the exclusive card store channel partner for "Runeterra", fully participating in store expansion, sales management, and event organization.

Dissecting the “Yaoji System”

The Yaoji system’s industry layout in the card field is deep and broad, and its influence has penetrated multiple upstream and downstream links.

As early as 2022, Yaoji Technology entered the sports star card market through strategic investment.

Specifically, by holding 38.14% equity in Shanghai Ludaocu Sports Culture Development Co., Ltd., it indirectly invested in star card issuer DAKA and secondhand trading platform CardHobby.

DAKA specializes in the distribution and sale of sports star cards, covering fields such as soccer, basketball, and esports; CardHobby is a leading domestic secondhand trading platform for star cards, with a GMV exceeding 600 million RMB in 2021.

In the first half of 2025, Shanghai Ludaocu Sports Culture Development Co., Ltd. achieved revenue of 105 million RMB and 12 million RMB, a year-on-year increase of 35% and 39% respectively.

Adding in Yaoji Trendy Products, one of the main domestic TCG channels, the high-financing emerging industry player FlashSoul, as well as its own printing supply chain resources, the Yaoji system's influence in the card track is no longer negligible.

However, Yaoji Trendy Products and FlashSoul no longer have direct equity ties with Yaoji Technology.

Yet traces of their relationship can still be found in their history and personnel details.

Yaoji Trendy Products was initially incubated internally by the public company in September 2022.

Then, in December that year, Chairman Yao Shuobin and former board secretary Bian Dayun increased their investment in the company through their respective holding entities, raising the registered capital by 12 million RMB, which diluted the public company's shareholding to 45%.

As of the mid-2023 interim report, the listed company still held an 18% stake and classified it as an associate company; at that time, Yaoji Trendy Products was an early investor in FlashSoul’s operating entity.

However, Tianyancha data in November 2023 showed that the public company had withdrawn from the shareholders of Yaoji Trendy Products.

In the same year’s annual report, Yaoji Technology confirmed that Trendy Products had been spun off from the public company, and was only disclosed externally as an “affiliate controlled and managed by the actual controller.”

The main operating body of FlashSoul, "Shanghai Zhenyouqu Culture & Creativity Co., Ltd.," was disclosed in the 2025 semi-annual report as an affiliate “under the same actual controller.”

Besides all being controlled by Yao Shuobin, there are also several executives in the “external” companies who previously served as executives in the public company.

For example, the public company's former board secretary Bian Dayun is the legal representative of Yaoji Trendy Products and FlashSoul shareholder.

One of the shareholders of Jiangsu Xiuka Technology, a card supply chain company with an annual production capacity of one billion cards and controlled by FlashSoul, Song Xiuwen, was once deputy general manager of the public company.

Some believe that Yaoji may have adopted the external incubation model to isolate strategic risks and avoid the impact of early losses on the public company’s financial statements.

Although there's no clear business overlap between internal and external businesses, the blurred boundaries between them may undermine the independence of the listed company.

For example, Yaoji Trendy Products shares the “Yaoji” brand with the listed company, essentially making use of the listed company’s goodwill and brand endorsement free of charge, making it difficult for the market to clearly distinguish the listed entity from the external businesses.

If external enterprises encounter operating or reputational risks, these may be transmitted to the listed company.

According to Xin Feng, some senior employees of Yaoji Technology, in addition to their main jobs, have also participated in some non-core business operations of FlashSoul.

Such personnel crossover and potential resource coordination increase the possibility of interrelated actions, which may also bring certain challenges to the governance transparency of Yaoji Technology.

Risk Warning and DisclaimerThe market has risks, investment needs caution. This article does not constitute individual investment advice, nor does it take into account the special investment goals, financial situation or needs of specific users. Users should consider whether any opinions, views or conclusions in this article are suitable for their particular situation. Investment is at your own risk. ```