By Amy Lam
HONG KONG (Jan 22) -- Mindworks Ventures, a Hong Kong-based venture-capital firm, is aiming to raise $100 million from a new fund to channel early-stage investments into start-up companies specializing in disruptive technologies, according to its partner and co-founder.
The firm - whose investment portfolio includes Shanghai-based online lending platform Dianrong, on-demand van and truck booking application Lalamove and Taiwan-based travel e-commerce platform KKday - is keen to invest in the southeast Asian, Hong Kong and Taiwanese markets. The fund, which raised has $30 million initially, is still open for subscriptions, Joe Chan said in an interview to Nikkei Markets on Friday.
"Our deal flow is pretty strong," Chan said. "Therefore, we need more money to capture these opportunities."
A disruptive technology is one that creates a new market by providing an innovative new product or service.
The fund is the firm's third after it raised $15 million in 2013, and $11 million in 2016. Mindworks currently has around $130 million in assets under management, Chan said.
Mindworks was founded in 2013, when Chan and his co-partner David Chang returned from Silicon Valley to an environment in which Chan says there was little awareness of early-stage funding by professional investors. The two had earlier met as students at the University of California, before Chang became a venture capitalist in Silicon Valley, and Chan went on to work for asset-investment companies and brokerages.
Mindworks was in 2013 backed by a few European family offices interested in the technology market's potential in Asia, according to Chan. He said Mindworks now receives about 1,000 enquiries each year from startups, as well as referrals from founders and other co-investors. The firm invests in less than 10 companies a year, Chan said.
"Now more Asian family offices are interested in our venture capital funds," he said. About "70% of our portfolio companies are located in Asia outside China. This region offers low-valuation opportunities."
At the same time, execution risk is declining as ventures including ride-hailing services such as Didi and Go-Jek help nurture entrepreneurial talent across Asia, he said.
Even so, the firm faces risks as failure of some of its ventures is "inevitable," while its eventual returns are "hard to quantify," Chan said.
Also, as an early-stage venture capitalist, Mindworks and investors in the firm have to think long-term and be patient with investments as opportunities to cash in, such as via a public offering or stake sales to other investors, could take several years.
"Only when a company is doing good in business, do we have the options to exit," Chan said.
- By Amy Lam; Amy.Lam@nikkeinewsrise.com; +852 3960 5150
- Edited by V.Phani Kumar
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