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. 

China Grabs 23 of 100 Spots for Best VCs in the World


The 2020 ranking of top venture capitalists worldwide underscores several trends in the market.
It demonstrates that China is rising as a tech superpower, while Silicon Valley remains at the top.

Definitely, China is showing its muscle, innovating faster, working harder and going global. On just about every score -- patents, R&D, number of engineers, unicorns, venture capital investments -- China is catching up to the U.S.

On the annual Midas list, China grabbed 23 of the spots, a record. Silicon Valley maintained a strong lead with 54 VCs on the tally. Of the 23 from China, five were notably from Hong Kong. Other markets that placed well were New York and Boston.

Once again, Neil Shen of Sequoia Capital China aced the list of top-performing 100 venture capitalists in the world -- the third year in a row.

The list also showed the prominence of a core group of VCs in China. Of the China firms on the list, Sequoia placed 3, GGV Capital had 3 and Qiming had two.

Investment in several Chinese companies that went on to become tech titans tipped the scales toward VCs in China.  They include social e-commerce startup Pinduoduo, entertainment and news app ByteDance, smartphone maker Xiaomi, delivery superapp Meituan-Dianping, ride hailing service Didi Chuxing, food delivery service Ele.me, video streaming site Bilibili, social commerce platform RED and self-driving car startup Pony.ai.

Let me point out that most of these companies and their venture investors are profiled in-depth in my latest book, Tech Titans of China.

Among the up and comer VCs, China also scored two spots.
In a nod to the newcomer tech hubs in Asia, Singapore counted with one VC.

There were none from India, however. This could change for next year's list, as India picks up as a venture tech hubs.
Overall, the annual ranking has been improved over the years to take into account markets outside the U.S., particularly China, which in some prior had a separate country ranking.

See my list below compiled from the Forbes rankings of the best venture capitalists, with their rank and the company that gave them the edge. 

BEST VCs: 23 from China
Neil Shen, Sequoia Capital China (1),  ByteDance
Richard Liu, Morningside Ventures (6), Xiaomi
Hans Tung, GGV Capital (10), Peloton
JP Gan, INCE Capital (13), Bilibili
Kathy Xu, Capital Today (14), Meituan-Dianping
Zhen Zhang, Gaorong Capital (18), Pinduoduo
Xiaojun Li, IDG Capital (19), Pinduoduo
James Mi, Lightspeed China Partners, (21), Pinduoduo
Xiaoping Xu, ZhenFund, (24), Meicai
Steven Ji, Sequoia Capital (30), Ele.me
Nisa Leung, Qiming Venture Partners (33), Zai Lab
Jenny Lee, GGV Capital (35), Kingsoft, WPS
Allen Zhu, GSR Ventures (40), Didi Chuxing
Tuck Lye Koh, Shunwei Capital (42), Xiaomi
John Lindfors, DST Global (48), Xiaomi
Liu Erhai, Joy Capital (49), Mobike
Yi Cao, Source Code Capital (51), ByteDance
Xiang Gao, Gaorong Capital (68), Huya
Duane Kuang, Qiming Venture (69), RoboRock
Kui Zhou, Sequoia China (70), Pony.ai
Jixun Foo, GGV Capital (76), Qunar
Young Guo, IDG Capital (85), iQiyi
Anna Fang, ZhenFund (91) RED (XiaoHongShu)

Up and Comers
Yungang Huang, Source Code Capital, Relx Technology, Qimg Hotels
Yutong Zhang, GSR Ventures, RED (XiaoHongShu)

Southeast Asia
Shailendra Singh, Sequoia India, (64), Pine Labs

Hong Kong

Neil Shen, Kathy Zhu, Richard Liu, Nisa Leung, John Lindfors






Wednesday, April 8, 2020

VC Firm Qiming Pulls In $1.1 Billion for New Fund Focused on Healthcare And Tech



Gary Rieschel, Qiming Venture
In a positive sign for the venture capital business during exceedingly tough times, cross-border investment firm Qiming Venture Partners has raised a new $1.1 billion Fund VII focused on early bets in healthcare and tech businesses. 
The Qiming team of partners in China and the U.S. closed the fund at the target amount and on the initial timetable despite challenges caused by the Covid-19 pandemic as well as geopolitical uncertainties. The backdrop to the fund raising is unfavorable US-China relations as the two tech superpowers battle over leadership and an overall drop in venture capital investment globally. 
"It was quite a process.  We reorganized the firm last year, and we knew that the US – China  relationship dynamics presented some of a challenge," said Gary Rieschel, founding managing partner of Qiming Venture Partners. "We also knew that many limited partners are over-allocated against their models to VC.   Add in the Covid pandemic and we had interesting circumstances."  
The firm was restructured in 2019 to reinforce the focus of technology teams on earlier stage investments.  Qiming has several portfolio companies in the healthcare market, working to combat the coronavirus pandemic such as CanSino Bio, which has recently started vaccine tests in China. 
In announcing the fund raising news, Qiming noted the firm distributed more than $1 billion in cash returns to LPs in 2019 and that anchor investor PRINCO or the Princeton University Investment Company, with the firm since its inception, was in tow.  
Good timing?
Downturns are typically regarded as opportune times for venture investors to make new deals with startups. Valuations are often lower, and entrepreneurs hungrier.  Yet startup financing so far this year is taking a hit. Private market funding in the first quarter of 2020 is on pace to reach $77 billion, a 16% decline compared to the previous quarter and down nearly 12% versus Q1 2019, according to CBI Insights. Seed stage funding is predicted to fall by 22% in the first quarter of 2020, versus the previous quarter. 
Qiming got an early start in China tech investing in 2006, spearheaded by Rieschel and Duane Kuang.  
The venture firm's investments include several Chinese tech titans such as smart phone maker Xiaomi, superapp Meituan Dianping and robot maker UBTech
More recently, Qiming has opened US offices and invested state-side while continuing its China approach. Qiming manages nine US dollar funds and five RMB funds with $5.3 billion under management. 


China Surpasses US In New Patents For First Time

In an ongoing trend to watch, China has surpassed the U.S. as the top country applying for new international patents in 2019 to the World Intellectual Property Organization. It's the first time that the China has been upended the U.S. since WIPO began tracking patent filings in 1978.
This latest report underscores a battle for tech innovation leadership among the two economic superpowers, the U.S. and China. The two markets have been battling for status in a tech cold war that has seen a "splinternet" or decoupling develop as politics and Silicon Valley markets have collided.
China has logged a 200-fold increase in only 20 years to 58,990 applications in 2019, up from only 276 in 1999, when China's entrepreneurial boom began, pointed out WIPO General Director Francis Gurry. The U.S. weighed in with 57,840 patent applications in 2019, followed by Japan at 52,660 with other countries much further down the ranks.
The 2018 findings showed that the U.S. and China were nearly on par, with the U.S. in the lead at 22 percent of filings, trailed closely by China at 21%.  Observing China's climb, the patent organization had predicted that China would surpass the U.S. in 2020 but that leap occurred a year earlier, in 2019. 
Chinese tech giant Huawei remained the top filer among companies, with 4,411 patent applications, far outdistancing Mitsubishi at 2,661, Samsung at 2,334 and Qualcomm at 2,127. Of the top 10 companies, four are from China, two from Korea, and one each from Germany, Japan, Sweden and the U.S.
Followers of Silicon Dragon will recognize that these latest findings are not to be unexpected. The trends are well-documented in my latest book, Tech Titans of China.

Monday, April 6, 2020

VC Bill Tai Answers Everything in Silicon Dragon Webinar

Venture capitalist Bill Tai offered some valuable advice to startups navigating during these tough times. As the first investor to commit to funding Zoom and several other startups that zoomed, he does seem to have more than a little bit of luck.
But Tai said it's more about timing than anything else. "You have to be able to position yourself for a wave and be in the water paddling to be able to executive at the right time," said Tai on a Silicon Dragon webinar held April 3, the first in a series of,  Ask A VC Anything. Known to be a pro kiteboarder, Tai likes to use the surfing analogies like catching the wave at the right time.
What does he look for when deciding to invest? Timing, market, team, technology of course. But what else?
"I invest in authenticity," he replied, meaning that he goes for founders who are passionate and committed to their business and not just in it for mercenary reasons. He credited three founders he's backed with that special ingredient: Zoom founder Eric Yuan, Canva co-founder Melanie Perkins and Treasure Data founding CEO Hiro Yoshikawa.
Often with early stage tech startups, the market need is not apparent and may not be so recognized for several years. Tai said he's worked with founders for up to seven years, coaching them while they keep the burn rate low until the timing gets better.
What's the biggest lesson Tai has learned as a VC investor over his 30-year career as a seed and angel investor? He's learned that he must trust his gut when making decisions, even if it goes against 'group think.'  He recalls a time when he intuitively felt that a startup wasn't going to work but he went along with a group decision in part to keep everyone happy. He doesn't do that anymore.
Keep the burn rate low 
Finally, what did Tai have to say about startups struggling to survive during the coronavirus criss?
Definitely, keep the burn rate low and concentrate on product market fit.
For VCs, this is a critical time too, he pointed out. If one startup in the portfolio is in trouble, it can tie up time and mental energy and ultimately could leave to friction within partnerships.
Typically though, investing during down times has turned out to be fruitful for VCs because valuations are lower and entrepreneurs more earnest and determined about reaching their goals. 
For more tips from VC supremo Bill Tai, check out Silicon Dragon's on demand recording of the 1-hour long webinar. Email events@silicondragonventures.com for more info.
Next Webinar: April 9
Join us April 9, 11am-noon for our next Ask A VC Anything: Brian Cohen, 1st investor in Pinterest and chairman emeritus, NY Angels.
Sign up here: https://zoomwithvcbriancohen.eventbrite.com


Monday, March 30, 2020

China's Online Learing Market Surges: 51Talk Inside View

The online education market is booming in China, as the coronavirus has kept schools and campuses closed.
One beneficiary of this trend is China Online Education, otherwise known as 51Talk. The Beijing-based company that is listed on the NYSE has been growing very fast. It's poised to continue on that growth curve as awareness grows about how online learning can work.
Silicon Dragon interviewed CFO Min Xu to learn more about how 51Talk is keeping ahead in China. Edtech is increasing globally by about 11 percent annually and projected to reach $341 billion by 2025, according to HolonIQ in its Global Education Outlook.  China's market is growing the fastest worldwide, by 20 percent per year. The sector has been attracting loads of venture capital investment, reaching nearly $1.7 billion in 2019 across 105 deals in the U.S., according to edtech tracker EdSurge. China claims four of the five largest edtech investments in the world.
Big Op in China
In China, a large opportunity beckons since penetration is still low, in the single digits, according to Xu.
That is changing rapidly as more students and teachers get used to remote learning.
At 51Talk, first quarter 2020 revenues are poised to surge 40 percent over Q1 in 2019, he noted. It's currently delivering 140,000 lessons per day at its peak and so far "the system has survived the traffic," said the CFO, who is based in the U.S. and speaks perfect English.
Moreover, if current trends continue, the edtech company that went public in 2016 could break even this year, he added. On its board are two leading venture capitalists who backed the company: Hurst Lin, general partner of DCM and Wei Li, an executive director at Shunwei Capital.
Key to continued growth in the market is differentiation with other contenders in this space in China including AI-driven edtech company LAIX and VIPKid.
The core business at 51Talk is K-12, one-on-one lessons in English language learning and focused on smaller cities, outside the ring of Shanghai and Beijing unlike VIPKid. Looking to increase efficiency, 51Talk plans to also emphasize small classes of four to six students with lessons taught by Filipino teachers.
Investors are paying attention, and the stock price has gone up from $4 to $36 in a 10-month period ending early March, before the big overall market drop.







Saturday, March 21, 2020

US-China Team Up to Provide At-Home Testing Kits for Coronavirus

Scanwell Health team led by Stephen Chen
In another sign of US-China collaboration in fighting the coronavirus outbreak, LA-based startup Scanwell Health is licensing technology from a Chinese company to distribute at-home testing kits for COVID-19.
Pending approval via the FDA's emergency use authorization, the kits should be available in the U.S. within two months. The test kits, produced by Beijing-based biotechnology Bioventure-backed company Innovita, have been used in China clinical trials at five institutions for help in diagnosing COVID-19.
The test kit works this way. A patient completes an online questionnaire that is evaluated by Scanwell partner Lemonaid Health, a telemedicine provider in San Francisco with online doctors and a mail order pharmacy. Upon evaluation, an at-home test kit can be mailed out to a patient the next business day. The patient does the test at home in as little as 15 minutes and securely shares the results with a doctor or nurse via the Scanwell app. 
The test detects antibodies against the novel coronavirus in the blood, which indicates that an individual has been exposed and developed antibodies against the virus. Antibody tests are helpful in tracking the spread of the virus because they also identify mild or asymptomatic carriers and those who have been previously infected.
While the gold standard test is DNA based, these at-home tests gives patients personalized guidance in a safe environment while limiting exposure and allowing for wide-scale testing, said Stephen Chen, founder and CO of Scanwell Health. "We hope that these home-use test kits will ease the burden on healthcare centers, so that they can focus on the highest severity cases," added Chen.
Scanwell, a developer of smartphone apps for at-home diagnostics, expects to roll out the kit-testing app in New York, California and Washington first, upon approval. The company was seed funded in 2019 by DCM, Founders Fund, Mayfield and YCombinator

The South Rises to Combat the Coronavirus

University of Alabama at Birmingham
Researchers from all over the world are scrambling to find a way to fight the highly infectious coronavirus that first appeared in China and has spread internationally with more than 300,000 cases.
In Birmingham, Alabama - far away from epicenters of the outbreak - the medical community led by the University of Alabama and science research organization Southern Research have joined the race in developing coronavirus treatments.
Research at the University of Alabama at Birmingham has been at the forefront of developing a drug, remdesivir, that's now being used to treat select infected patients in the U.S. and China.
The university, under a five-year, $37.5 million grant in a public and private partnership with several academic institutions and Silicon Valley-based biotech company Gilead Sciences, has been working to jointly study and develop treatments for high-priority infectious diseases such as the coronaviruses that caused SARS, MERS and the novel COVID-19.
Drug trials of remdesivir on select patients in China with COVID-19 showed promising results. Working with the World Health Organization, the Chinese government and Gilead Sciences, clinical trials are underway in both China and the U.S. to determine whether remdesivir is both safe and effective in treating the novel coronavirus.  It's an indication that cross-border collaboration could stop the outbreak. 
New vaccine from Southern resource
Meanwhile, Birmingham's Southern Research group will begin testing potential vaccines against coronavirus in collaboration with Tonix Pharmaceuticals, a clinical stage biopharmaceutical company in New York.
The new vaccine, TNX-1800, based on proprietary research at Tonix, was initially developed to prevent smallpox but has proven to effective in combating other types of infectious diseases.
So far, there aren't any vaccines to protect against the highly infectious COVID-19, which causes serious complications and has led to significant rates of mortality.
The drug development division of the non-profit Southern Research, is a leader in infectious disease research and possible therapeutics for emerging biological threats, with more than 400 scientists and engineers across four divisions that have helped to win the war against cancer and fight HIV. 
Tests are also underway in Seattle for a vaccine developed by the NIH and biotech company Moderna Inc. in Massachusetts. See related post on China's CanSio Biologics, which is also carrying out R&D for a new coronavirus vaccine.  
  

Thursday, March 19, 2020

Chinese Vaccine Backed by US VC Joins Coronavirus Fight



One of the first two vaccines being tested in patients to fight the coronavirus comes from a Chinese company, CanSino Biologics, that Qiming Venture has invested in. 
The vaccine that's been developed joins the human trials initiated in Seattle to fight the disease caused by the coronavirus infection. This is China's first COVID-19 vaccine candidate entering the clinical research phase. 
As Qiming partner Helen Wong explained it, the cross-border venture firm led the pre-revenue company's Series B financing in 2015 and participated in the next funding round in 2017.  The Chinese biotech company became the first vaccine stock to be listed on the Main Board of the Hong Kong Stock Exchange in 2019.
The vaccine, co-developed by the Hong Kong-listed company and China's Academy of Military Medical Sciences, will undergo clinical trials in Wuhan, the original epicenter of the outbreak.
Here's more info on how several Qiming portfolio companies are fighting the coronavirus outbreak. 

Monday, March 2, 2020

Robots Called Into Action In China Amid Cornavirus Outbreak


Chinese companies are rushing to deploy robots and automation technology as the coronavirus has spread throughout the nation. 
As some 100 million factory workers return to China’s automotive, consumer 
electronics and smartphone makers, one clear, longer-term impact will be an emphasis on robotics and automation. Robotics can reduce labor costs and increase productivity — and prevent a recurrence of future plant shutdowns.
Over the past several years, the world’s second-largest economy has been undergoing a so-called “robotics revolution.” Now, the impetus is greater than ever to embrace automation or be left behind. China has become the world’s largest market for industrial robotics and the fastest-growing market worldwide, surging 21% to $5.4 billion in 2019, while global sales hit $16.5 billion, according to the International Federation of Robotics in Frankfurt.
See Rebecca Fannin's article published March 2, 2020 at CNBC on robotics and the coronavirus impact. 


Sunday, March 1, 2020

Tech Titans of China Wins a Best Book Award

My new book, Tech Titans of China, has won a Silver Medal for best international business book of 2020.

I am thrilled to receive this recognition of my work.
Please see the announcement of this award from Axiom, honoring best business books and authors and of course, their publishers. Hachette's Nicholas Brealey in Boston and London published my book globally.