Monday, November 9, 2020

Top VC of the Year Named at Silicon Dragon HK 2020: Recap


Silicon Dragon HK 2020: Key Takeways

 Quick speaker highlights: 
November 4, 2020 

Silicon Dragon's Top VC 2020
James Mi, Founding Partner at Lightspeed China Partners, was named Silicon Dragon’s 2020 Venture Capitalist of the Year.  James lead this China-focused early-stage venture capital firm with approximately $1.9 billion under management and 8 funds. Among James’ many successful early stage investments are Dianping (Meituan), Pinduoduo, Rong360, and Baidu. 

Keynote: Kamran Elahian, Founder and Chairman, Global Innovation Catalyst, Silicon Valley 
Elahian founded 10 companies including three unicorns (Cirrus Logic, NeoMagic and Centillium). He previously ran venture firm Global Catalyst Partners for 15 years. He now works in global philanthropy and is an Advisory Member to the UNICEF Innovation Fund.

·       Society is moving from a knowledge economy to an innovation economy. lies in algorithmic content. This is the case for finance, education, media, and many other markets.
Over time, more tasks will happen with algorithmic content or machine learning and automation. Less and less will be manual. 
Due to broadband and the diffusion of knowledge, Silicon Valley is no longer the only place for unicorns to be created.
ech innovation will be propelled by a convergence of engineering, business and design schools in addition to hubs that consist of accelerators, incubators, co-working spaces, maker spaces, and micro-funds. Tech hubs are emerging on the frontier, and spurring the creation of new tech jobs. There are now over 1000 tech hubs in Africa alone.

Venture Panel: Outlook 2021

James Mi – Founding Partner, Lightspeed China
Jeffrey Chi – Vice Chairman and Managing Director, Vickers Venture Partners
Edith Yeung – General Partner, Race Capital
Duncan Chiu – Managing Partner, Radiant Venture
Olivia Wang – Former Head of US, ZhenFund 

Key points by panelists:  

Duncan Chiu – Managing Partner, Radiant Ventures

·       Radiant Ventures took a conservative approach and slowed down its investment activity early in the year when Covid-19 hit. In order to offset the slowdown in investments in Q1, Radiant Ventures did follow-up rounds on previous portfolio companies, a common thread among other firms. Now, investors are beginning to plan post Covid-19.

·       The Hong Kong market is split: later stage companies are having no trouble raising money, unicorns can get funded even now if they are not too aggressive with their valuation.

·       Earlier stage companies are having a more difficult time because they are backed by personal investors and angels, who tend to be more conservative. This makes it harder for these early stage company to close a round.  Many are calling this a gap year for these early-stage companies.

·       Startups in the US and China are able to focus on their own markets because they’re so big, but for companies coming out of Hong Kong, they need to choose their market. The top choices in this case are Mainland China, Southeast Asia, and the U.S. 

James Mi – Founding Partner, Lightspeed China

·       The investment pace slowed for Q1 but now it is picking up for both early and late stage companies in search of funding.

·       Barriers are being put up for cross border collaboration and innovation, but this also creates opportunities for startups in each region because more local solutions are required.

·       Lightspeed has been advising its portfolio companies during Covid-19 to keep a six-month cash reserve and raise funding even if they think they can get by without it.

Olivia Wang – Former Head of US, ZhenFund

·       A priority has been to prepare portfolio companies for the worst case scenario and manage their cash burn.

·       As opposed to Q1, the summer has been robust for even seed and series A companies.

Jeffrey Chi- Vice Chairman and Managing Director, Vickers Venture Partners

·       “It’s not about when Covid-19 will pass, but how we are going to learn to live with it.”

·       Tensions will continue whether Biden or Trump is president. (time lag here)

·       Innovation will take a step back as tensions between US and China grow. Frictions in deals are happening when US and China are part of the transaction.  

Edith Yeung – General Partner, Race Capital

·       Distributed deals geographically are the norm. Location does not matter.   

·       Covid-19 is an accelerator for previously avoided sectors like online education and healthcare.


IPOs: Where Hong Kong Fits 

Michael Chan - Head of International Issuer Services, HKEX
Irene Chu – Partner, KPMG China / 
Head of New Economy and Life Sciences markets, Hong Kong

·       Hong Kong IPOs totaled $129.8 billion from 2016 through first half of 2020, compared with $96.6 billion for NYSE, $91.7 billion for Shanghai, $72.3 billion for Nasdaq, $53.2 billion for LSE, and $41.7 billion for Shenzhen.

·       New economy companies account for about 25% of all Hong Kong market cap.

·       Market appetite for companies in health, fintech, and biotech is strong. 

·       Even with social unrest, Hong Kong IPOs are not having issues with raising money.

·       Look for more Southeast Asian tech companies to go public.

·       Neither wanted to comment on the delay of the Ant IPO in China, but it’s created some uncertainty in the market over powerful influences.


 Summary submitted by Silicon Dragon contributor Mike Weiss