Sunday, May 10, 2020

Ask A VC Anything: A Home for Deep Tech Globally > Jeff Chi, Vickers Venture

For our 6th Silicon Global Online episode, we turned to Shanghai and featured venture capitalist Jeff Chi, vice chairman of Vickers Venture Partners. Jeff described how the firm, which grew out of a successful early bet in 2000 on Chinese search engine Baidu, has emerged as a deep tech investor in breakthrough companies that have the potential to solve big problems.
Jeff described several of the firm's deals: a 'fountain of youth' biotech startup in San Diego that Vickers holds a 3% equity stake at a $12 billion valuation, a biodegradable plastics producer in Georgia, and a geothermal energy business in Canada that operates at a fraction of alternative sources. Vickers recently closed on $200 million toward a fund of $500 million, its sixth since a start in 2005. 

Here are a few takeways from our chat with Jeff Chi online. 

1. Has no regrets about missing the consumer internet boom in China a decade ago. It was too difficult to differentiate the companies and see which one might emerge as a winner. 

2. Instead, Vickers moved to deep tech investing and to a global perspective. "In deep tech, we have a better idea of the market potential so the risk becomes whether the technology can work and the team can execute." 

3. The coronavirus is slowing the investment pace. Usually Vickers does about 10-15 deals per year. For the first quarter, the firm made five deals but the rest of the year will be slower because of market uncertainty. 

4. When Vickers launched, Jeff moved from his home base of Singapore to set up the firm's office Shanghai, a center of the action.  

5. Southeast Asia a decade ago was not happening for startups. But progress is being made, thanks to government funding for startups and the creation of several successful businesses. 

6. Still, Southeast Asia lags China by about 10 years in development of a startup ecosystem and tech company successes. 

7.  He's spending about 80 percent of his time working with portfolio companies on helping them to expand and make connections. And about half of that time currently is spent on helping investee companies deal with the Covid-19 economic crisis.

8. He's encouraging founders to have a runway of at least 12 months before having to raise more funding. It will be very challenging for startups to raise new finance in thish climate. 

9. While many of the firm's companies  have a social impact element, that's not necessarily the investment driver. It's more about the financial returns but often these two go together. 

10. While the firm benefits from an Asian VC angle, having a global perspective helps when evaluating technologies and companies to see possible comparable businesses and to determine how breakthrough the technology might be. 

An on demand recording of the show with Jeff Chi is available: $20 on PayPal or QuickPay with Zelle, events@silicondragonventures.com



 


1st Chinese IPO in U.S. Since Covid-19 Blasts Past Headwinds

China's angel investor and tech
entrepreneur Lei Jun
In the first significant IPO since the coronavirus pandemic and the first Chinese listing since the Luckin Coffee fiasco, Kingsoft's cloud spin-off raised $510 million on Nasdaq at a $3.5 billion market cap, despite the tough stock market environment and negative U.S.-China relations. 
As readers of Tech Titans of China know, Kingsoft is the company that famed Chinese serial entrepreneur Lei Jun ran and spearheaded its transformation from a struggling word processing software maker to a games and computer security business and onward to a public listing on the Hong Kong Stock Exchange in 2007. After that listing, Lei returned as chairman to lead Kingsoft into the mobile internet era. 
Now, the spin-off of Kingsoft Cloud as an independently operated company, the deal is a payday for early backers, Xiaomi founder and angel investor Lei and the parent Kingsoft which owned 54 percent, and Chinese private equity firm FutureX Capital and its founder Cynthia Zhang, with 5.7 percent of the shares. The China-based cloud service provider closed up 40 percent on its trading debut on Nasdaq. 
While unprofitable with an operating loss last year of 1.14 billion yuan ($161 milllion), the company grew revenues in 2019 by 78 percent to RMB 3.96 billion ($560 million). Kingsoft Cloud has growth opportunity in China's large and relatively un-penetrated cloud computing market, but faces steep competition from much larger players. The Kingsoft spin-off will use the capital to invest in technology and product development.  Kingsoft is the third largest provider of internet cloud services in China in a market of $23 billion, according to consultancy Frost & Sullivan. It competes against tech titans Tencent Cloud and Alibaba Cloud.  
It was the busiest week for the IPO market since February, with three upsized IPOs, according to IPO tracker Renaissance Capital. The two others were London-based GAN, an Internet gambling software maker, and oncology biotech Ayala Pharmaceutical in the U.S. and Israel. 







Saturday, May 2, 2020

10 Key Takeaways: Jay Eum on Ask A VC Anything

VC Jay Eum

Our 5th episode of Silicon Global Online, Ask A VC Anything, featured Jay Eum, one of the best connectors from Silicon Valley to Seoul and the world. On our one-hour program, Jay shared his view of leading technologies of the future and offered ample advice for startups in the trenches trying to dig out from the impact of the coronavirus.   

Here are several takeaways from our online chat with Jay, recorded April 29, 4-5pm PT. 

1. Startups need to act quickly to counteract the current downturn. Make the hard decisions early -- cut expenses, do layoffs. Those who make the decisions early will have a much better chance to make it through.

2. The bar will be higher to raise venture capital. Startups need to have their house in order first with a track record of revenues before seeking to raise financing. It will be a longer runway to get the funding.

3. Those who get ready now will be in a good position to take advantage of an upturn when that happens. 

4. It matters less about the valuation right now in raising finance and more about raising cash to survive to get to the next milestones.
5. This crisis period for startups will last at least six months.  

6. If few alternatives exists, founders should seek government checks to keep their startups afloat. 

7. If an opportunity comes along for investment from a corporate venture investor, consider it carefully. A strategic investor can be a good fit. But make sure your startup is ready to ramp up quickly. Oftentimes, startups have to race to meet hurdles demanded by their new investor that wants to leverage a strategic fit. 

8. Technologies that will do well in this current environment include robotics that can safely transport goods from warehouses directly to consumers. Robots will also be called upon to handle medical tasks such as cleaning up infectious areas. 

9. South Korea has been able to manage the Covid-19 pandemic effectively compared with other countries because it had experience with prior viruses that swept Asia. It was prepared with medical equipment and prevention measures to fight the virus this time and to act quickly to stop its spread. 

10. The South Korean high-tech scene is quite dynamic now and has seen many unicorns rise such as Coupang in e-commerce and Toss in fintech. Both attracted financing from Sand Hill players - Coupang from Sequoia Capital and Toss from Kleiner Perkins Gaming was an initial growth area for South Korean startups that  got going after the Asian financial crisis of the late 1990s, and gave rise to gaming leader NCSoft

Bio: Jay Eum

Jay Eum is a venture capitalist, angel investor and startup advisor with more than 20 years of experience across the U.S. and Asia. He co-founded TransLink Capital, a Palo Alto-based early stage VC firm, investing in artificial intelligence, fintech/blockchain, and consumer technology. Noteworthy exits including Carbonite (NASDAQ: CARB), Coin (acquired by Fitbit), Enterprise DB (acquired by Peak Equity), and YuMe (NYSE: YUME).
Prior to TransLink, Jay was Managing Director of
Samsung Ventures, where he established and led its US VC operations, handling $50 million of equity investments in 16 startups, and overseeing introductions of more than 600 startups to Samsung business units.
Jay started his VC career at
Vertex Management, Singapore-based venture capital arm of investment firm Temasek Holdings. Jay has recently joined DTCP (Deutsche Telekom Capital Partners) to advise on growth in Asia and help with the firm's new office in Seoul.  

On-demand recordings of Silicon Global Online are available for $20 each. 
Contact events@silicondragonventures.com

Tune in May 7, 4pm PT for our next show, featuring VC Jeff Chi of Vickers Venture Partners.
Sign up here soon and receive an invitation to join a discussion group online after the show. 





   


 

Saturday, April 25, 2020

10 Key Takeaways from 'Ask A VC': Gary Rieschel, Qiming Venture


Silicon Dragon's 4th 'Ask A VC Anything' featured Gary Rieschel, founding managing partner of Qiming Venture, one of the most established and dominant US-China VC firms. Rieschel is a thought leader in the venture business and manages to stay ahead of the trends with a long-term perspective.  
Here's 10 key takeaways from host Rebecca Fannin's conversation with Gary at Silicon Global Online Series
Ask A VC Anything.

1. Innovation will enter a hyperactive period that will last well into a decade as a result of the Covid-19 virus speeding up changes in lifestyles and norms

2. VC fund raising will become exceedingly difficult as limited partners that are already over-allocated in this asset class become more selective

3. VC investing in tech will be more selective as China faces its first downturn ever since Chinese venture took root nearly two decades ago 

4. China tech investing into the U.S. is dead, a victim of politics

5. Stricter financial disclosure requirements for Chinese companies listing in the US could come into play in the wake of alleged fraud at China's Luckin Coffee

6. Fair competition between the US and China over tech dominance is healthy, but both country's governments are too involved

7. New rules of the road will need to be developed for the use of AI, regarding such issues as patient data protection, which is more freely shared in China than in the US

8. Tech markets are moving away from a focus on the consumer internet to product solutions plus data

9. Sectors that will be hurt the most in this coronavirus crisis include commercial real estate and the shared economy such as co-working while those that will benefit include online education and pharmaceutical

10. US-China relations are at a low point politically but putting moats around tech with dual standards and decoupling of US and China markets won't work since technology likes to move, to flow 


Highlights of Gary's career

• Co-founded or sponsored 4 China VC firms and helped to jumpstart China venture investing
• 30 years experience as a venture investor working in Silicon Valley, Japan, Shanghai and now Seattle
• Co-founded Qiming Venture in 2006, which now manages $5.3 billion with nine US $ funds and four RMB funds
• Despite challenging times, recently raised a new $1.1 billion fund focused on healthcare and tech investing  
• Returned to the US in 2016 and launched the firm's 1st US fund investing in healthcare, and raised a second fund to total $300 million in capital

On-demand recording

An on-demand recording of Silicon Dragon Online with Gary Rieschel is available through the end of April 2020. Payment of $20 goes to Silicon Dragon account on PayPal, events@silicondragonventures.com. 


Sunday, April 19, 2020

Ask A VC Anything: 10 Key Takeaways from the VC Who Named Zoom

Zoom founder Eric Yuan with
Jim Scheinman, Maven Ventures
For our third "Ask A VC Anything' episode, we put Jim Scheinman, the VC who named Zoom and invested extra early under the spotlight. Jim is currently investing from Maven Ventures and its $64 million, third fund focused on seed financing in game-changing consumer tech and self-driving startups. He's made a mark in venture investing with such deals as Zoom, which went public last year and is now the hottest startup around, and with self-driving tech startup Cruise, sold to GM for $1 billion. Jim has found his calling following this career path after trying his hand at being a lawyer, business executive and entrepreneur.  He's achieved five unicorn exits ($1 billion + exits/valuations) since forming Maven Ventures in 2013. Here are some insights from his investing style, as outlined during Silicon Dragon Online's weekly webinar, April 16. 


TEN TOP  DRIVERS


1. Strives to predict future consumer trends but not too far out. Examples include autonomous driving, tele-medicine, grab 'n go cashless outlets, and distance learning -- many of which are strongly emerging in this Covid-19 era. 
2. Invests in founders who are driven, trustworthy, passionate and have a vision worth fighting for 
3. Gets pitches from 3,000 companies per year primarily on Zoom and invests in only 6 annually
4. Invests at the earliest stage and works closely with the founding team on ramping up5. Keeps his fund size at a micro level (under $100 million) to hone in on investments at the earliest stage 
6. Invests in only one portfolio company in a market category at a time
7. Takes few board seats or observer roles, typically no more than 5 at one time contrasted with 10 or more by many VCs
8. Exits the board generally after the A round investment. Most of his portfolio companies get funded after the initial seed money
9. Focuses on the sectors he and his partner know best
10
. Invests in founders who come from trusted sources within his extended network 

During our one-hour webinar, we also discussed how the coronavirus has changed our lifestyles at home and work in ways we couldn't have imagined a few months ago. It won't be 'back to normal' after the Covid-19 pandemic clears, and it could take one to two years before a vaccine or cure is developed. Meanwhile, new ideas are already being developed by entrepreneurial souls. Jim is ready to fund a select few of these innovations that are arising during this crisis period.

ON-DEMAND RECORDING

For more insights into what makes this VC tick, we have an on-demand recording of the webinar available for only $20. Click PayPal.me/silicondragon to purchase, and Silicon Dragon will send you the recording.Our thanks to Jim and Maven Ventures for matching this webinar's registration fees and making a charitable distribution to local healthcare workers on the frontlines of the Covid-19 battle.

NEXT EPISODE: APRIL 23

The next Silicon Dragon Online webinar is with Gary Rieschel, founding managing partner of Qiming Venture, a pioneer of early US-China cross-border investment and a specialist in funding healthcare and tech deals. 

Tune in April 23, 4-5pm PT. Sign up here to join in: Silicon Dragon Zoom with Gary






Saturday, April 18, 2020

Silicon Dragon Launches Online Weekly Series: Ask A VC Anything





Silicon Dragon has launched an online weekly series, 'Ask A VC Anything'.
Hosted by Silicon Dragon founder Rebecca Fannin, these webinars feature chats with prominent VCs. Online audience ask questions during these sessions.
These webinars provide an up-close profile of leading VCs and their investment strategies and portfolio companies. They give the audience a chance to interact and learn more about how these VCs think. 
On-demand recordings of these sessions are offered for $20. Payment can be made to PayPal account: events@silicondragonventures.com
This weekly series launched in April 2020.
SCHEDULE
April 3: Bill Tai, the VC Who First Backed Zoom, Silicon Valley
April 8: Brian Cohen, NY Venture Partners; First Investor in Pinterest, NYC
April 16: Jim Scheinman, Maven Ventures: The VC Who Named Zoom, Silicon Valley
April 23: Gary Rieschel, Qiming Ventures, the VC Who Pioneered US-China Venturing, Seattle
Sign Up for Gary 
April 29: Jay Eum, Samsung Ventures, the VC with the Best Korean Connections, Silicon Valley/ Seoul
Sign up for Jay

NEXT IN MAY


May 7, Jeff Chi, Vickers Venture Partner, Singapore/ Shanghai
Sign up for Jeff

May 14, Kamran Ansari, Venture Partner, Greycroft, New York City


Tuesday, April 14, 2020

Lightspeed Is Latest VC Firm to Beat the Odds and Raise New China Funds



In quick order, another China-focused venture firm has defied the odds and raised more capital for new investments.

Following Qiming Venture last week with a $1.1 billion new fund, now Lightspeed China Partners
comes out swinging with $4 billion of new capital in three funds to invest in early and growth stage startups.

Much credit goes to James Mi, founding partner at Lightspeed China. He's pictured (middle) at a Silicon Dragon awards event in Hong Kong.

Mi has been racking up the wins in China with investments in social commerce startup Pinduoduo and superapp Meituan-Dianping. Both went public in 2018.

You can get an idea of his views of the China market from this quote of his in my latest book,
Tech Titans of China.

"China's enterprise service and deep tech innovation is in the early innings of development. Given China's vast market, deep talent pool and increasing demand for home-grown deep technologies across various industries, we are seeing accelerated growth and significant investment opportunities."

Mi joined Lightspeed in 2008 from heading up M&A for Google in China, where he spearheaded an investment in Baidu.