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 VC系列： 红鲱鱼VC in Asia系列: Silicon Valley VCs tune into China (转贴) |
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安普若
[博客]
[个人文集]
头衔: 海归元勋
声望: 大师
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加入时间: 2004/02/21
文章: 26038
来自: 中国美国的飞机上
海归分: 4196257
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作者：安普若 在 海归商务 发贴, 来自【海归网】 http://www.haiguinet.com
VC in Asia: Silicon Valley VCs tune into China
As China continues to gain momentum as a top investment destination, Sand Hill Road veterans finally gets serious about veering East.
May 7, 2004
Asia, particularly China, is increasingly the flavor of the month in investing circles these days. Just one look at a recent panel discussion, “Rising Sun: Outlook for Asian VCs,” hosted by the Silicon Valley-based Asia America Multi-technology Association, hammered that point home.
According to the Asian Private Equity Review, $9.8 billion in investment capital went into the region last year – a 66 percent increase over 2002. After Japan (which, as the world’s second largest economy, is typically considered a region unto itself), mainland China was the top destination for investment, receiving some $1.1 billion last year.
The news has finally reached Silicon Valley. For years, VC veterans on Sand Hill Road assumed there was no need to venture outside the Valley, because the hottest hi-tech prospects were right under their noses. But that parochialism – and a healthy fear of the unknown, given how many people dreaming of a billion-person market opportunity have instead lost their shirts in China over the years – is increasingly giving way to fully booked flights to Shanghai and Beijing. While the challenges and potential pitfalls are still present, the overall mood is indeed upbeat.
The Rising Sun panel featured representatives from a half-dozen Silicon Valley VC firms with a long-term Asian presence, who could reflect with some hindsight and experience on the current Asia buzz.
Louis Nguyen, managing director of IDC Ventures’ new Vietnam fund, says the fund has a simple rationale: “Vietnam is the next China.” He pointed out that IDG was among the earliest foreign investors in China, with more than a decade of investing behind it. The China fund, with 120 companies and 30 exits, is the most successful of IDG’s five funds – which is saying something when you take into account that IDG’s portfolio companies include such names as Netscape, Excite, and VA Linux.
Mr. Nguyen said the $100 million Vietnam fund, which was announced late last year, is based on the China model. “Our strategy is simple: return on investment,” says Mr. Nguyen. He admits his life is made simpler by one key fact: IDG has only one limited partner: IDG founder Patrick McGovern, who has committed $700 million to his venture funds with a long-term strategy. IDG spent seven years on one China deal, for instance. In a particularly undeveloped market like Vietnam, “where there are only 200 listed companies and really bad financial transparency, you need a very patient limited partner,” he quips.
Harbinger Venture Management, by contrast, began life as the venture-investing arm of Taiwan-based MiTac-Synnex Group 20 years ago. Partner Peter Hseih says his fund’s investing strategy ranges from early to later stage, typically putting in $1 million to $3 million per round and $8 million per deal. Of the $160 million in the latest fund – all of it Taiwanese money – 60 percent was still available to invest. With headquarters in Taipei and offices in Silicon Valley and Beijing, Harbinger’s investing universe is “Greater China” (the mainland, as well as Taiwan and Hong Kong).
Investing in China is not for the faint-hearted, Mr. Hseih warns. “We were burned a few times.” In Taiwan, which has a very active and successful VC market, “the government takes the lead; VCs are the second wave.” Mainland China, on the other hand, “is not a developed capital market – yet… The U.S. venture model is not very scalable. Not many U.S. funds have gone East and done well.”
Jack Hennessy, of Baring Private Equity Partners Asia, a private equity and buy-out firm active across East Asia and India, says the best way for U.S. firms new to the region to get exposure in Asia is through portfolio companies. He cites the political hot-button issue of outsourcing as a key investing area for any firms active in cross-border deals in Asia: “If a company isn’t using Asia for outsourcing, they have missed the boat.” Baring usually targets later-stage, fast-growing companies in need of expansion capital; its deals typically range from $5 to $20 million. Baring is among the small club of players with a track record of success in China: of its 12 investments, seven have exited so far. Among its success stories is Netease.com, one of China’s three leading portals, whose stock has recovered some 200-fold after plumbing the depths of the dot-bomb crash.
Jonathan Wang, managing director of WI Harper Group, is a neurobiologist by training who directs Harper’s biosciences investing. Not surprisingly, he thinks biotech is where the action is, rattling off a few statistics to prove his point: Eight of the 10 IPOs in the first quarter of this year were biotech, as are half of the 29 IPO applicants. To wit, nearly 30 percent of all VC funding last quarter went to biotech. “Aging is the single largest factor,” Mr. Wang notes, adding “We are seeing the maturing of the biotech industry.” As Mr. Wang points out, the U.S. National Institutes of Health spends some $28 billion per year, and there’s plenty of opportunity for getting in on that action. WI Harper’s philosophy, Mr. Wang says, is the “bridging concept:” matching the complementary differences of Asia and the United States.
Rishi Navani, a principal with WestBridge Capital Partners, rounds out the panel with the South Asian investing perspective. WestBridge is a $140 million U.S.-India fund, focusing on the services sector. Its U.S. investors include tony investment banks such as Goldman Sachs, Merrill Lynch, and Morgan Stanley, and its investing focus is early- to mid-stage companies, with selective late-stage investments. “We work with U.S. companies building up delivery of IT services in India,” Mr. Navani explains. WestBridge takes both a vertical approach – within business process outsourcing, for instance, by industry such as health insurance or accounting – as well as a horizontal approach, focusing on claims or bill processing.
Unlike most of the others on the panel, who are typically looking to invest or expand market opportunities into Asia, Jay Eum of Samsung Ventures, is looking at strategic opportunities in the U.S. for Samsung. This $300 million fund is the venture-investing arm of the Korean conglomerate, which comprises some 40 companies. Of those, Samsung Electronics is the biggest, and a global leader in the space. The fund was launched in 1999 with $300 million, and while its investments are predominantly in Korea, Mr. Eum opened shop here nine months ago.
“I’m looking to find strategic opportunities, to compliment where we compete globally,” Mr. Eum says. Samsung’s key investment areas are in its core strengths: “semiconductors, telecoms and consumer electronics – such as display technologies,” he says. “We’re here to export cutting-edge technology to the U.S.” He noted that some of this is cyclical too: consumer electronics is once again a “hot” investing area, as evidenced by Intel’s $200 million fund to promote the “Digital Home.” Wireless connectivity, including the boom in wi-fi, wi-max, and related products, is a key investing theme as well.
The panel also focused on question of exit strategies in China, whose laws restrict foreign ownership in certain strategic sectors and whose currency is not fully convertible. Baring’s Mr. Hennessy says the key is to invest in companies with a strong market position – “Be the number one or two company in that sector” – and to be in markets with a strong overseas market interest. “In a high-growth market, foreign buyers want companies with foreign equity firm ties. You need to invest in companies with the scale to go international, and eventually to list internationally, whether in Taiwan, Hong Kong, or the U.S.”
Whether in the U.S. or overseas, it seems, the basic rules apply: be the best, or stay home.
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VC in Asia is an online column focusing on the rising influence of venture capital in Asia, and its role in the region’s growing economy. Have thoughts or suggestions for VC in Asia? Email the column editor at [email protected].
作者：安普若 在 海归商务 发贴, 来自【海归网】 http://www.haiguinet.com
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 VC系列： 红鲱鱼VC in Asia系列: Silicon Valley VCs tune into China (转贴) -- 安普若 - (8373 Byte) 2004-5-29 周六, 08:45 (1896 reads)
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