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,