China-based tech corp Kuang-Chi launches US$250 Global Tech Fund

Liu Ruopeng, Chairman of Kuang-chi Science attends HKIEF Forum: "Runway 11" at Asia World Expo at Chek Lap Kok. 03DEC15 SCMP/Dickson Lee

Shenzhen-based Chinese technology conglomerate Kuang-Chi Group announced on January 11 that is has launched a US$230 million fund that will be used to invest in global technology companies.

The fund is known as Global Community of Innovation (GCI) Fund II and is accompanied by the opening of its Israel-based International Innovation Headquarters.

As one of the first Chinese fund of its kind, GCI Fund is targeted at Israel technology companies that are looking to collaborate with local Chinese firms for entry and expansion into their domestic markets.

GCI Fund II will invest US$250 million in global technology companies active in sectors of smart city and home, computer vision,Internet of Things (IoT), artificial intelligence, VR/AR and robotic.

The selected startups will be supported by a new China-based incubator, established by Kuang-Chi to help bring its portfolio companies to the Chinese market.

“We were able to quickly deploy the US$50-million GCI Fund I in exceptional companies that operate in sectors we know well and we’d like to build on this momentum with Fund II,” said Dr. Liu Ruopeng, the chairman of Kuang Chi.

“Working with our partner in Israel, we’ve identified a wealth of opportunities to expand our portfolio and give our joint investment team an expanded strategic and financial mandate,” he added.

Earlier, the first GCI fund established in 2016, has seen stakes in several Israeli companies, including computer vision pioneer eyeSight, voice analytics developer Beyond Verbal, and video intelligence and analytics provider AgentVi.

Besides, the fund has also invested in Norwegian biometric authorization innovator Zwipe, Canadian aviation company SkyX, SolarShip and Australia’s Martin Jetpack.

“We have moved from success to success in Israel, and I’m delighted by the pace of our good progress showed in our recent investments in eyeSight, AgentVi and Beyond Verbal,” the Kuang-Chi co-founder and CEO of KuangChi Science, Yangyang Zhang said.

Within six months of its investment, Kuang-Chi and eyeSight jointly built a local team in China to provide markets with the most advanced embedded computer vision solutions currently available.

While in December, Beyond Verbal signed its first cooperation agreement in China, with the Second Affiliated Hospital Zhejiang University School of Medicine in Hangzhou.

“GCI portfolio companies will share access to cutting-edge technology that includes over 2,000 patents and R&D from around the world. Each of these investments comes with an opportunity to expand their business in China and establish relationships with global market leaders across multiple industries,” added Liu.

Founded in 2010 by a five-person team, Kuang-Chi has created a Global Community of Innovation of more than 2,600 employees which spread through 18 countries and regions.

The fund is dedicated to disruptive innovation and principal investment in cutting-edge technology sectors including communications, metamaterials, and space technology.

By Vivian Foo, Unicorn Media

Mekong Capital invests in Vietnam-based F88 pawn shop chain

F88

Private equity firm Mekong Capital announced on January 10 that the Mekong Enterprise Fund III (MEF III) has invested an undisclosed amount into Vietnam-based pawn shop chain F88.

The terms and value of the investment were not disclosed, although the fund is said to be an eight digit number and Chris Freund, a partner at Mekong Capital, will join the management board of F88 as part of the deal.

This also marks the third investment made by the PE firm’s US$112.5 million fourth fund since its launch in May 2015. Prior to this financing, MEF III had closed investments in restaurant chain Wrap & Roll and cold chain logistics company ABA Corporation.

Founded in 2013, F88 is a pioneer in Vietnam’s pawn service chain which leverages on a tech platform. It provides transparency in operation and offers an effective alternative to traditional borrowings which brings a reliable financial solution to consumers.

The IT platform within F88 covers data about management tasks, deposited items, and most importantly product valuation. “For this model to work, it is very difficult to agree on the valuation of the products. Our technology solutions are the key to this problem,” said Phung Anh Tuan, the chairman and CEO of F88.

“This combination facilitates us to strengthen our management team, approach to the world’s best practices and improve service quality to ready us for a rapid and sustainable growth,” Phung Anh Tuan added.

F88 currently operates 15 stores in Hanoi and several surrounding provinces while aiming to have 70 outlets in the north of Vietnam by the end of this year and as many as 300 stores across the country by 2020.

“F88’s competitive edge is its entrepreneurial co-founders, professional management team, IT infrastructure, and strong corporate governance. We believe that with Mekong Capital’s well-proven approach towards adding value, called Vision Driven Investing, and our extensive network of international experts and resources, F88 will continue to improve their operations and successfully execute an ambitious nationwide expansion plan,” said Freund, the Mekong Capital partner at F88.

This is said to be an established business model found around the world, according to the fund partner. However, the risk associated with it in the Vietnamese market is how to scale the size of the market opportunities.

Freund also mentioned that the firm’s strategy did not include investing in new disruptive technologies. However, Mekong Capital will continue to search for companies with proven business and strong teams that can successfully execute their models, irrespective of sectors.

The chain currently provides loans on diverse assets such as cars, motorcycles, mobile phones, laptops, and jewellery. With the investment by Mekong Capital, F88 plans to go for an IPO within the next five years.

“We are very proud and excited that F88 is the third investment we’ve announced for the Mekong Enterprise Fund III,” Freund added.

MEF III, which focuses on investments in Vietnamese consumer-driven businesses such as retail, restaurants, consumer products, and consumer services, targeting investments ranging from US$6 to US$15 million each.

By Vivian Foo, Unicorn Media