September 29, 2016
Bridging Tech Markets: A Recap of the 2016 Global Innovation Awards
During the last 12-18 months, we at Peakview Capital have noticed an increase in the exchange of ideas and technology across the globe – particularly between China and the United States. Our primary mission is to provide top investors and entrepreneurs in the U.S with access to Chinese capital –- and build bridges…
During the last 12-18 months, we at Peakview Capital have noticed an increase in the exchange of ideas and technology across the globe – particularly between China and the United States. Our primary mission is to provide top investors and entrepreneurs in the U.S with access to Chinese capital –- and build bridges to lucrative Chinese markets and resources.
Though the majority of our financial investments support top-performing VC firms, we also have the privilege of supporting global entrepreneurship on a smaller scale with our annual Global Innovation Awards (GIA). The 2016 competition – our second annual – kicked off at Peakview partner F50’s Global Capital Summit last March and winners were announced last month. While startup competitions are commonplace in tech hubs across the United States, we feel that the GIA is unique because of its global scope, non-dilutive cash awards for winners and the sheer number of startups that participate.
(The GIA global finals were held in New Tsinghua Auditorium of Tsinghua University in Beijing.)
Co-sponsored by the Beijing government and several global venture capital firms, the GIA competition invites up-and-coming startups from around the world in technology, healthcare and other high-growth industries to apply for the Awards. Startups compete for $1.5 million in cash awards that are divvied out among 10 winners – the top five startups receive $200K, while startups in 6th to 10th place receive $100K. Beyond the financial value, the finalists benefit from wide media exposure in China and internationally and opportunities to work with a great number of prospective partners and investors.
This year, after a detailed application review period, 21 finalists flew to Beiijing to present their businesses at the 2016 GIA Finals. The finals are designed to deliver startups immediate value by connecting with more than 100 VCs, incubators, and accelerators from China, the U.S., Israel, Europe, and Latin America. A panel of judges included myself, Foundation Capital general partner Paul Holland, Yoav Tzruya/Partner from JVP, Xu Jinghong/Chairman of Tsinghua Holdings, Peng Zhiqiang/Co-founder & Chairman of Shengjing Technology Co., Ltd, Dr. Hong Chen/Founder, Chairman and CEO of The Hina Group, Fumin Zhuo/Managing Partner of GGV Capital, Uwe Horstmann/Founding Partner of Project A Venture, Duane Kuang/Founding Managing Partner of Qiming Venture Partners, Feng Deng/ Founder of Northern Light Venture Capital and Xiao Bing. All finalists also receive investment from a $25M dedicated Peakview Capital VC fund.
This year’s winners, which were announced recently in Beijing, included four startups from the United States, four from China, and two from Israel. As an example, two U.S. winners in the top 5 ($200K prize) included:
Dedrone (Drone Security): Founded by enthusiastic drone veterans, Dedrone brings security to an industry in its infancy. Drones have become so pervasive that security threats are rising. People are using drones to deliver drugs to prisons, interfere with public events, and hack data centers through WiFi access points among other insidious uses. Dedrone’s drone detection technology uses various audio, visual and other sensors to identify a drone, look up the owner of the drone in a database, and even provide countermeasures to neutralize a malicious drone. Dedrone customers range from sports stadiums to high net-worth individuals.
C-B4 (Advanced Retail Analytics): C-B4 offers highly sophisticated SaaS based analysis software that can find patterns in massive amounts of data around retail sales. The purchasing patterns in a store are influenced by many variables that are extremely granular and hard for humans to recognize. C-B4 helps retailers identify patterns in inventory, item stocking, store configuration, and other data sets that improve sales. Sales have risen significantly for retailers that use CB-4, making this margin-pushing startup exciting and attractive to investors.
I know I speak on behalf of all of my colleagues when I say that Peakview is excited to be involved with C-B4, Dedrone, and all of the GIA 2016 winners. We expect all finalists will truly enjoy the benefits of global exposure provided through this one-of-a-kind competition. I encourage all tech entrepreneurs with lofty international ambitions to apply for next year’s competition and showcase the next wave of innovation to the world.
June 6, 2016
Innovation in AR and VR is hitting its J-curve – in China and the US
Judging by headlines in the press, a marked increase in venture capital funding, rollouts by leading consumer electronics companies and acquisitions by tech leaders Google and Facebook, 2016 will be viewed as the year AR and VR took off – and the evidence is growing stronger by the day.…
Earlier this month, Peakview Capital had the honor of gathering some of the biggest and most revered names in tech together under one roof for the AR/VR Global Leadership Summit in Beijing, China. Jointly organized with the U.S. venture platform F50 and Rothenberg Ventures at the Ritz Carlton hotel, the purpose of the summit was to facilitate top-tier communication and collaboration between the portfolio AR/VR companies of our partner venture funds and high level managers in both the Chinese media and investment communities.
AR/VR was the ideal industry to center this summit around because today the U.S. is far and away the global leader in this technology. However, China has a huge appetite in the space and is looking to become the next super hub of innovation. This keen interest was apparent, as the event attracted a top-notch mix of senior-level representatives from some of the biggest U.S. AR/VR companies as well as Chinese Internet giants, investment firms, AR/VR startups, and investors.
Standout U.S. AR/VR companies included Oculus, HTC Vive, Lytro, Jaunt, CCP Games, and Voke. Major Chinese Internet companies were also well represented, with high-level people from Alibaba, Tencent, and Baidu, among others, in attendance. It’s also worth mentioning some of the Chinese media companies that were present and looking for opportunities in this area included CCTV, Netease Media Technology, and Qihoo 360, as well as investors from Legend Capital, F50, Hillhouse, Shunwei Capital, and Fang Group.
The conference’s agenda was filled with keynotes, panel sessions, and roundtable discussions: including Arthur Van Hoff, founder and CTO of Jaunt, Stefanía Halldórsdóttir, a senior development director at CCP games, and Lytro CEO Jason Rosenthal to name a few.
As an investor in venture capital funds, at Peakview Capital we look for ways to position our partners and their portfolio companies for success in China, and events like these open doors, foster global collaboration, and provide immense value for everyone involved.
(Stefanía Halldórsdóttir, CCP)
I had the pleasure of hosting a panel on investing in AR/VR, which focused on the various sectors and opportunities for growth. Executive mangers from HTC Vive, Voke, Qihoo360, LeSports, Rothenberg Ventures, Lytro, Suning Investment group, and Ourpalm all shared their ideas about the AR/VR industry.
(Erik Lassila and panelists)
Most importantly, the summit provided a chance for attendees to meet and connect one-on-one with senior level executives at large Chinese media and investment companies. This is just one example of the many ways that Peakview Capital can support the portfolio companies of the venture capital firms that we invest in.
We look forward to hosting more events like this that incite incredible presentations and discussions, and add value for the venture capital funds that we invest in. Stay tuned!
March 29, 2016
Peakview Capital and F50 Kickoff U.S. Regional Competition For The Second Annual Global Innovation Awards
Peakview Capital, the investment advisory arm of Shengjing Group and the largest global fund of funds (FoF) investing Chinese capital, announced today….
the US. regional search for startups to submit for the second annual Global Innovation Awards (GIA), in partnership with F50, a venture capital syndication platform. The awards, which kicked off today during the F50 Global Capital Summit, were created to honor the best startups across the globe. Dozens of innovative companies will compete simultaneously in the United States, China, Israel, and Europe for the opportunity to secure multi–million dollar investments.
The Global Innovation Awards presents an extraordinary opportunity to compete against innovative startups from around the world, gain significant exposure in global markets, and raise capital from leading international investors. Winners will receive cash prize awards up to $1.5M USD and a guaranteed investment from a $25M fund established by Peakview Capital, as well as national exposure to investors and the largest growth companies in China.
Submissions will be accepted from today until June 1 via https://f50.io/gia/. The final competition will take place on August 9th and 10th in Beijing, China.
“The goal of the Global Innovation Awards is to identify the most promising, innovative startups globally, open doors and support them, and to help them grow into market-leading companies,” said Erik Lassila, U.S. Managing Partner, Peakview Capital. “Startups from last year’s competition have made tremendous progress. We’re delighted to be part of the growing impact these companies are having on their industries.”
The competition is open to startups in all high-growth industries. Some sectors Peakview is following with interest include:
- VR & AR
- Big Data
- Health Tech
- And more!
“Winning the first prize at GIA 2015 was an amazing experience and gave us the opportunity to introduce DiaCardio’s technology to new global markets, meet key investors that resulted in significant strategic opportunities and help us build and grow into a successful company,” said Hila Goldman-Aslan, co-founder & CEO, DiaCardio.
The top finalists from GIA 2015 include the following startups:
- DiaCardio (Israel)
- Ping++ (China)
- Datometry (USA)
- Brilent (USA)
- Wayerz (Israel)
“F50’s goal is to find the most innovative startups and assist founders raise global capital, which is why we are honored to be a partner of the Global Innovation Awards as it will bring forth amazing companies ready to take their business to another level,” says David Cao, Founder and CEO of F50.
About Peakview Capital
Peakview Capital is the investment arm of Shengjing Group, an investment advisory and management consulting firm headquartered in Beijing. Peakview manages China’s largest global venture capital fund of funds, investing over $1 billion per year into venture capital, growth capital and private equity funds in the US, China and Israel. Peakview also has a direct VC investment practice focused on cooperation with its partner VC funds. Peakview’s mission is to facilitate high-performing private equity investments for its clients and to assist partner VCs and their portfolio companies to succeed in China. With a consistent approach to identifying industry-leading innovation on a global level, Peakview has formed long-term partnerships with dozens of the world’s most talented investors. In 2015, Peakview/Shengjing was honored by ChinaVenture as China’s “Best Performing Fund of Funds.”
Founded in March 2014, F50 is a venture capital syndicate dedicated to finding and funding the next generation of startups in collaboration with its network of top venture capitalists and strategic corporate investors from Silicon Valley, China and around the globe. F50 helps the most promising startups raise growth capital of $1 to $5 million or more via its private co-investment syndication platform.
Tim (dot) Turpin (at) Sparkpr.com
March 3, 2016
This investor has ‘hundreds of millions’ of dollars to sprinkle around US-based VC firms
Peakview is the investment advisory arm of Shengjing Group and the largest global fund of funds in China….
It also has millions of dollars to invest in U.S.-based venture capital funds, it says. This year. Right now.
It’s a very different message than VCs are receiving from many other institutions, judging by our recent conversations with these backers, called limited partners.
According to a variety of sources, the many brands talking with LPs include Andreessen Horowitz, Menlo Ventures, Eight Partners, True Ventures, and First Round Capital (to name but a handful). But some investors aren’t happy with the founder-friendly approach that many VCs have taken in recent years. As one investor told us earlier this week, speaking on background: “A lot of VCs have ‘returns’ but they’re mostly unrealized; it’s not like they were pumping these [portfolio companies] out [onto the public market] as soon as they could. And now the IPO market has collapsed.”
Erik Lassila, a longtime VC who is now the U.S.-based managing partner of Peakview, understands his peers’ frustration. There’s a big — and often costly — divide between paper and realized gains. But as part of an organization that plans to invest $1 billion in venture funds — including “hundreds of millions of dollars” in the U.S., a smaller percentage in Israel, and the rest back home in China — Lassila doesn’t have to worry about VCs’ mistakes in recent years.
He’s working with a “blank slate,” as he puts it. He also notes that the “bar is very high right now for Series A and Series B deals.”
Indeed, Lassila, whose office is on University Avenue in Palo Alto, has already made commitments to six funds, including the newest funds of Menlo Ventures, Institutional Venture Partners, and Foundation Capital.
Now, Lassila is looking around at other places to park his capital and working to spread the news that “professionally managed Chinese capital has come to the U.S. for the long term.” (In reality, money has been leaving the country at a torrid pace since last year.)
Peakview’s capital comes from high-net-worth individuals; local development funds; and insurance companies, which were given the green-light to invest overseas for the first time in 2012, though some remain hesitant to do so for fear they’ll be punished harshly over poor performance by the China Insurance Regulatory Commission.
Asked if Lassila is seeing pushback over concerns that Peakview’s funding could be impacted by China’s turbulent economy, he acknowledges that the “macro economy will have ups and downs” but notes that “great wealth has been created in China and Chinese investors are keen to diversify internationally.”
Despite the outflow of capital from China, Lassila also argues that “most Chinese institutions have less than 1 percent of their assets invested overseas, so these international investments have a long runway to grow before reaching any kind of balanced portfolios.”
Venture firms may decide it’s worth working with Peakview either way. In addition to cold hard cash, foreign investors often provide needed diversification to a venture firm’s investor base; having money from an economy that doesn’t move in strict lockstep with that of the U.S. can come in handy in a downturn.
Peakview is promising VCs another perk, too: to help their portfolio companies bridge networking gaps between the U.S. and China.
“A GP will call me and say, ‘Our portfolio company received an investment offer from XYZ Ventures in Shanghai. What’s its reputation? What kind of resources does it have?’” says Lassila. Conversely, he adds, “Chinese companies will tell us they want to form a partnership with a top U.S. firm to invest in whatever field. We can help them pick the right partner.”
Peakview isn’t paid for its consulting services, says Lassila. It’s just “something we do for our family.”
Whether the services are enough to get Peakview into every top fund it would like remains to be seen. But Peakview’s pitch could certainly be music to the ears of the many VCs who are back in the market in 2016 — and would happy to join its brood if it means getting their newest funds raised.
August 25, 2015
Hedging Bets, Chinese Investor Peakview Moves Into U.S.
Ahead of a selloff in Chinese stocks in the wake of the country’s planned currency devaluation, China’s wealthy business leaders have been plunging capital into U.S. firms–and more is coming.…
U.S. businesses and venture capital firms have poured investments into China for years, but a wave of new money is flowing from China to the U.S. Venture participation for stakes in U.S. startups by China-based venture firms has taken off this year, and the flow of money from China isn’t stopping at investment in startups.
There was already interest by Chinese limited partners, who have less money to invest, in U.S. funds, but that has “accelerated recently due to [the] China market dropping like a rocket,” said Dave McLure, founding partner of 500 Startups.
Add to the list Peakview Capital–the two-year-old investment arm of Shengjing Group, a large management consulting firm that has been investing about $1 billion a year in private equity and venture capital funds–which next year plans to invest more than $1.5 billion, mostly in the U.S., according to Peakview U.S. Managing Partner Erik Lassila.
The firm has opened an office in Silicon Valley, is hiring a U.S.-based investment team and has so far invested in at least three Silicon Valley venture capital firms–Menlo Ventures, Institutional Venture Partners and 500 Startups–in addition to venture firms in China and Israel.
The money is coming largely from wealthy Chinese founders and executives who are Shengjing partners or clients.
“We are at the forefront of a large and important long-term wave of investment from China,” said Mr. Lassila, who has worked as a venture capitalist in both the U.S. and China and lived in China for seven years.
Peakview’s expansion comes at a pivotal time in China, whose government has been easing regulations on the ability of Chinese to invest overseas, especially in the last 18 months. China wants access to U.S. technology and U.S. markets, Mr. Lassila said, and Chinese companies such as Alibaba are rapidly becoming global and are investing in U.S. companies.
In the first half of 2015, Chinese investors participated in U.S. venture deals worth $2.16 billion, more than double the $934.71 million in deals in 2014, according to Dow Jones VentureSource.
The flow of funding from China to the U.S. also shows that wealthy Chinese want to diversify their assets, as do U.S. venture firms.
“Once the Chinese economy starts to look to slow down, they’re looking for growth elsewhere and to gain market share and to do that, expand into other countries,” said Richard Windsor, analyst with Edison Investment Research.
In March, Alibaba Group Holding Ltd . invested $200 million in Snapchat Inc ., a messaging service whose messages disappear after a certain amount of time, in a deal that values Snapchat at $15 billion. In July, Tencent Holdings Ltd . participated in a $10 million round for AltspaceVR Inc ., a virtual-reality platform.
Both Chinese companies have set up U.S. investment offices and hired stateside investors with the goal of acquiring stakes in mobile software, gaming, digital media, e-commerce and payment technologies.
Meanwhile, U.S. concerns about China–the ability to protect intellectual property, for instance, and the ability for U.S. companies to compete fairly in China–persist, but China’s size makes it a tantalizing market for investors.
U.S. ride-hailing service Uber Technologies Inc . plans to invest more than $1 billion in China this year, The Wall Street Journal reported in June, and Hillhouse Capital, a Chinese fund manager that Peakview has invested in, may be leading an investment in Uber, the Journal reported.
“We wanted better access to China on behalf of our companies,” said Menlo Ventures Managing Director Mark Siegel on why his firm took Peakview’s investment. “We have companies doing business in China and product development in China, but we’re not going head first into investing there. We’re watching that and wondering how it will pan out.”
Given the Chinese government’s support for Chinese companies, even Uber’s future in China “isn’t clear,” Mr. Siegel said.
But concerns may run both ways as far as placing new capital. “Anything concerning Chinese investments is currently up in the air given the market volatility of the past month–which doesn’t look like it will slow down anytime soon,” said Dr. Paul Tiffany, a senior lecturer at the Haas School of Business at UC Berkeley .
Still, Peakview is pushing ahead in the U.S. The firm is also co-investing alongside venture firms in U.S. companies and expects that practice to grow, Mr. Lassila said.
August 25, 2015
Chinese Entrepreneurs Seek Investments Abroad to Avoid Local Obstacles
China’s currency devaluation, economic slowdown and stock-market rout are spurring some of the country’s business leaders and entrepreneurs to invest abroad instead of at home.…
Cai Tong, the founder and chairman of Shenzhen-listed ABA Chemicals Corp., said he plans to go to Israel at the end of August to look for clean-tech acquisitions. He is negotiating two other deals now, and said he regretted that he hadn’t wrapped them up before the sudden 3% yuan devaluation.
He has vowed to speed up deal making as he expects the yuan to fall an additional 10% in about two to three years.
In recent years, Chinese investors went on a global shopping spree partly because a strong yuan had made overseas assets cheaper. China’s outbound foreign direct investment has been growing at an annual rate of 16% from 2011, and is expected to exceed inbound foreign direct investment for the first time in 2015, according to China’s Ministry of Commerce.
China was the world’s largest recipient of FDI last year, drawing a record of $120 billion, while ODI surged 14.1% to a new high of $102.9 billion.
Chinese outbound acquisitions totaled $55.2 billion year to date, up 10% from the same time a year ago, and has almost doubled from the same period in 2010, according to Dealogic.
“We still see a lot of Chinese companies interested in making overseas acquisitions driven by a desire to diversify their markets or acquire technology,” said John Kim, head of Asia ex-Japan mergers and acquisitions at Goldman Sachs.
While Mr. Kim said it was too early to say whether this trend will be affected by the market downturn, he pointed to Japan, whose outbound acquisition activities have increased substantially over the past year despite a weakening yen.
Another investor looking overseas is Peakview Capital, the two-year-old investment arm of Shengjing Group, a large Chinese management consulting firm. Next year, the company plans to invest more than $1.5 billion, mostly in the U.S., according to Peakview U.S. Managing Partner Erik Lassila.
The firm has opened an office in Silicon Valley, is hiring a U.S.-based investment team and has so far invested in at least three Silicon Valley venture-capital firms–Menlo Ventures, Institutional Venture Partners and 500 Startups–in addition to venture firms in China and Israel. The money is coming largely from wealthy Chinese founders and executives who are Shengjing partners or clients.
“We are at the forefront of a large and important long-term wave of investment from China,” said Mr. Lassila, who lived in China for seven years and has worked as a venture capitalist there and in the U.S.
The flood of outflows from China may accelerate after the People’s Bank of China surprised markets by pushing the yuan lower on Aug. 11 in the nation’s biggest devaluation in two decades. The offshore yuan market indicates a further 3% decline in the next year. Goldman Sachs sees the yuan, now at 6.41 against the dollar, weakening to 6.50 in six months and to 6.70 by the end of 2016.
The business deals are part of a large outflow of cash from China. Capital flows totaled a record of $340 billion in the past four quarters, according to J.P. Morgan. In July, China’s foreign-exchange reserves fell for a third straight month, indicating continuous outflows. Over the next year, J.P. Morgan expects possible quarterly capital outflows of $100 billion by Chinese companies and rich individuals.
The U.S., Germany and Israel are three popular destinations for Chinese outbound acquisitions. China became the biggest investor in Germany in 2014, according to Germany Trade & Invest, the European nation’s official economic promotion agency. Chinese e-commerce company Alibaba Group Holding Ltd. and top search engine Baidu Inc. have invested in Israel. In the first half of 2015, Chinese investors participated in U.S. venture deals valued at $2.16 billion, more than double the $934.71 million in deals in 2014, according to Dow Jones VentureSource.
As times get tougher at home, companies such as Mr. Cai’s ABA, which exports chemicals used to make medicine and pesticides, are eager to reinvent themselves through acquisitions abroad. Mr. Cai said he wants to buy cheap foreign assets and inject them into its listed company to help justify its hefty valuation. ABA shares, listed on the Shenzhen growth enterprise board ChiNext, still trade at 44 times last year’s earnings even after losing 72% of their value since their June 15 high.
Mr. Cai said he was negotiating two acquisitions in Europe, each valued at about one billion yuan ($155.8 million). He has been going to Israel once a year in the past few years, making some small acquisitions. He said Beijing has been supportive of private enterprises going abroad, adding that China Development Bank, a major policy lender, has helped make some introductions.
Although the recent yuan devaluation has made overseas targets more expensive, Mr. Cai said his company’s finances were improving because about 75% to 90% of his revenue is in U.S. dollars. A 3% devaluation means its revenue increases roughly 3% when converted into yuan, its reporting currency, and this should boost the company’s net profit by 10% to 30%, he said. “The People’s Bank of China is really trying to help us small exporters with the devaluation,” said Mr. Cai.