I was honoured to join my esteemed peers to discuss the impact of COVID-19 on the Corporate Venture Capital (CVC) landscape in China at the GCV Digital Forum on 29th September 2020.
The robust panel discussion, moderated by Dr. Mei Wang of Accenture, was attended by Eddy Dong, Accenture Venture & Open Innovation, Donald Lacey, PingAn Global Voyager Fund, Jin Hu, BP Ventures, and myself.
This is a summary of the panel discussion.
China is facing a challenge.
On one side, the technology industry is booming, particularly in mobile, and it continues to be an extraordinary investment opportunity. On the other side, there are increasing geopolitical dynamics, and we hear people voice their opinion with concerns.
So, has COVID-19 changed the investment landscape in China?
10 years ago, policy in China and the way of doing business was very different. Today, there is more discipline in terms of corporate management. People have a different agenda – it’s not just about making money, it’s also about doing something great. Entrepreneurs aren’t just making the next cool consumer app, they’re focused on making worthwhile technology for business.
It’s worth calling out how regulation and the legal environment has changed. It’s not perfect, but it has changed to help both the entrepreneur and venture capital firms.
Jin Hu agreed that China has experienced a reform in financial markets, and this has helped to welcome CVCs into China.
“China is trying to establish ‘COVID-normal’, and despite the events of this year, it remains a very exciting place for venture capital.”
What are the emerging trends or opportunities for CVC investment in China?
Eddy Dong, Accenture Venture & Open Innovation said that COVID has highlighted key opportunities.
“The first is the opportunity for Virtual Reality. During COVID, people have been at home; homeschooling and working. They might see the doctor from home. This drives a new wave of virtual reality – remote education, collaboration, e-commerce, and remote help. Some of these
changes could be permanent and therefore be a long-term opportunity.
The second is Elasticity. The higher volatility in demand could be the new norm. Every enterprise, no matter how big or small, would do well to think about their corporate structure and see where further optimisation can occur. For example, leverage technology, and adjust capacity, according to the average on-demand use and reduce cost in the long run.
The third is Trust. We are operating in an increasingly decoupled world. We need to work at bringing back hope among people and between countries.”
Donald Lacey, PingAn Global Voyager Fund said that there were definite silver linings to COVID.
“The PingAn mandate many years ago was that the world was on the cusp of institutional digitalisation and financial services. We also had a view that health care processes in many parts of the world were fundamentally broken, and in desperate need of technology at points along the value chain, to dramatically improve the quality of care that people get.
COVID-19 has accelerated those trends dramatically!
If you were a bank or a mortgage company, this was the year that you enacted ‘work from home’ capability for staff. If you were an insurance company, this was the year for
How important is the entrepreneur in China?
At Telstra Ventures, we serve both the entrepreneur and the fund. This can make our role challenging – but we always offer more than just capital. We provide strategies for growth and relationships with the right people to grow successful businesses. After all, every start-up is unique, no matter where they’re based.
What’s the most important advice you would give to a CVC coming to China?
Find a great person who can lead on the ground, who knows the market well enough to lead a venture capital firm to success in China.
“Pay a visit to the market, discover the innovation ecosystem for yourself so you can feel the passion, the energy, and the openness of the innovative people here. I think, after all, everything is about people.” – Eddy Dong.
“China is different. Don’t expect the market to do what the rest of the world does.” – Jin Hu.
“Make sure that you’re realistic about your ability to contribute value. If you’re going to invest here – make sure you know how you get money in and out!” – Donald Lacey.
Thank you to the organisers, the moderator, and established peers for sharing their expertise and time.