While the new seed fund has not yet placed a bet in Asia, Billy professes enthusiasm for what he sees people are building in the continent
After investing in more than 70 companies over decades, famed venture capitalist Tim Draper is trying something a bit different with a new $190 million seed fund from Draper Associates. Historically “a personal investment vehicle for Draper,” in the firm’s own words, it has brought in partners for the first time this week to debut the new early-stage venture fund.
“Draper Associates will invest about 75 percent of the fund in Silicon Valley and the U.S., and about 25 percent internationally,” says Billy Draper, 26-year-old son of Tim and a managing partner at the California-based firm. The seed fund is co-led by Billy, Tim, and Andy Tang.
The VC has backed some huge names in tech like Tesla, Baidu, Twitch, and Skype.
“Asia will certainly be a focal point of international investment given our history, and in recent years we have seen talented entrepreneurs tackling enormous market opportunities there,” Billy tells Tech in Asia.
The Draper seed fund will mostly be looking at entrepreneurs building things in fintech, govtech, healthcare, education, insurance, and logistics.
That syncs nicely with boom areas among Asia’s tech startups. Biotech was the fastest growing sector in the region so far this year, according to data from the Tech in Asia database, although the deal volume is low. It’s mainly e-commerce and transportation and logistics-related startups that pull in the big money in Asia. Others are growing steadily – like fintech.
“With the growing middle class across Asia, we expect to see enormous opportunities for new financial tools and services. Everything from retail banking to exchanges to private investing to alternative assets will be transformed. Finance is changing everywhere, and we expect to see Asia at the forefront of that change,” observes Billy.
While the new seed fund has not yet placed a bet in Asia, Billy professes enthusiasm for what he sees people are building in India – a place of “visionary entrepreneurs” – and also fast-growing Indonesia.
“Indonesia in particular presents an incredibly exciting opportunity for venture capitalists right now with exploding growth of smart devices and internet usage, and we hope to make the most of that,” he says.
Across Southeast Asia, Billy and the crew may consult with its regional partner, Singapore-based Wavemaker, in order to “source the best deals in the area for us to evaluate,” Billy says.
Even China, with its very mature – and perhaps greatly overheated – tech industry is not off limits.
“Valuations in China are high right now because the addressable market is enormous and the tech landscape is thriving,” Billy says. “We expect prices to come back down to earth at some point, but will continue to evaluate business plans from that area regardless. In many cases, it’s worth paying a slightly higher price for the enormous upside China presents. We’re particularly excited about Shenzhen, as that has risen into prominence as a sort of entrepreneurial hub.”
Shenzhen has spawned a number of hot new startups – particularly in hardware. The most well-known is drone maker DJI.
Editing by Judith Balea and Malavika Velayanikal
This post was originally published on Tech in Asia.
Featured image credit: Nawneet Ranjan