For our 19
th Silicon Global Online episode,
Ask
a VC Anything, our featured guest was David Lam, a general partner at
Atlantic Bridge Capital.
See these 10 takeaways
from our wide-ranging conversation about international business and investment
trends, with an eye toward China.
Online conversation with VC David Lam and Rebecca Fannin, host of
Silicon Global Online, November 18, 2020.
Cash runway exam
When the pandemic hit the US in March, Lam and Atlantic Bridge Capital
used it as an opportunity to look closely at their portfolio companies’ balance
sheets and calculate the impact Covid-19 would have on their businesses. The
findings were mixed: some segments were affected, some were not impacted, while
others actually saw positive momentum.
Growing portfolio despite the virus
Despite Covid-19, the firm remains right on its pace of three to four
later-stage investments a year: Caption Health, Syntiant, and a European
company in the semiconductor industry that is currently in stealth mode.
Caption Health is an artificial intelligence company using AI for guided
ultrasound for echocardiograms (an ultrasound of the heart). It is the first
FDA approved AI guidance system. Syntiant makes an AI chip that is optimized for
voice in devices ranging from phones to smart speakers. The stealth company is
a semiconductor equipment company building technology around web processing.
Bill and Melinda Gates’ $5 Million
The Gates foundation recently gave a $5 million grant for Caption Health
to extend its breakthrough AI technology for heart ultrasounds, using vast data
to capture an echocardiogram at a high-quality level. Caption Health is used at
more than 20 hospitals in the US currently. Caption has huge relevance, since regular
echocardiograms are recommended for all Covid-19 patients.
Europe gains appeal for expansion
Many fast-growing US companies have highlighted China as an overseas
business opportunity because of the size of the market, but current tensions has
made expansion more challenging than ever. The interest from entrepreneurs to
go to China right away has dampened, although the market is still a priority
for many foreign businesses. In this environment, Europe is an appealing
location: world’s top research institutions, wide pool of hirable software
developers at a more reasonable salary than Silicon Valley counterparts, and strong
companies in both hardware and software.
Some of Atlantic Bridge Capital’s portfolio companies have chosen to
reincorporate in Europe. This allows them to run their businesses how they see
fit and investors to own the same amount under the same terms as they would
somewhere outside Europe. Most importantly, companies are able to sell their
products to other markets, including China, which want to see goods coming from
a neutral region.
Europe-China Bridges
In Europe, Lam has leveraged Ireland’s particularly strong relationship
with China. One of his firm’s funds has a strategy of making equity investments
in technology companies with a presence in Ireland and a substantial or
strategic interest in China’s fast-growing tech companies.
US-China positive synergy despite tensions
As an example, a new Atlantic Bridge portfolio company, Syntiant
(mentioned earlier), chose a general manager from China that was recommended by
Atlantic Bridge Capital. The hire took place after a rigorous independent
decision-making process by Syntiant.
IP advice for China
Lam is quick to note the importance of IP protection as a foreign
company. If the goal is to actually sell products to China and Chinese
customers, it would be best to identify ways to augment existing IP in China
for that specific market. You protect your IP by keeping your core IP where you
are based.
Semiconductor hardware opportunity
One of the implications of a flattening of Moore’s Law is that the
processing power starts to become more linearly correlated with power. This
creates a huge challenge in terms of power management and environmental issues
related shipping a lot of power. A number of exciting new technologies are
developing in the power management space.
Focus on data and speed
With so much data being generated, so fast, the current infrastructure
in most places is not equipped to handle these new data speeds. An investment
opportunity exists in companies that can move data very quickly into a
database. Atlantic Bridge portfolio company AtScale allows valuable content to
be produced and then securely and privately stored worldwide.
CFIUS in a new US Administration
Lam expects to see some change in how CFIUS (Committee on Foreign
Investment in the United States) laws are enforced in a new administration but it
will likely be seen in a more case-by-case basis than in sweeping changes. He
noted that the US Congress will continue to act on the belief that stronger
CFIUS oversight is in the best interest of US national security.
Bio:
David Lam is
General Partner of Atlantic Bridge Capital, a 15-year-old technology investment
firm focusing on adding value cross-border with offices in Palo Alto, Dublin,
Munich, London, and Paris. Lam led the firm’s investments in Caption Health,
Syntiant, and AtScale. He previously served on the board of Movidius (acquired
by Intel). David co-founded Summit Bridge Capital, which operates the
China-Ireland Growth Technology Fund.
Prior to
Atlantic Bridge, David was Managing Director of WestSummit Capital where he
served as its representative on the boards of Twitch (acquired by Amazon),
Mirantis and Maginatics (acquired by EMC), among others. David was previously
Managing Director for WI Harper, a ground-breaking US-China cross-border
venture capital firm where he led the firm’s US office. His projects included
the formation of Kai-Fu Lee’s Sinovation Ventures). Prior to that, David was
Vice President at The Carlyle Group, a global private equity firm, after
serving as head of business development for a Carlyle portfolio company. He
also held various operating roles at CIENA Corporation, ONI Systems, Cisco
Systems, and Proxim. David began his career as an investment banker at
Robertson Stephens and Company. David is a board member, past president, and
past chairman of the Asia America Multi Technology Association (AAMA). He also
serves on the board of the Association of Asian American Investment Managers
(AAAIM).
David holds a
BS and an MA from Stanford University, and an MBA from the MIT Sloan School of
Management where was a recipient of the Merit Scholarship and Patrick McGovern
Award.
Summary by Mike Weiss, contributor to Silicon Dragon
