Steel, petrochemicals, and – blockchain? Asia’s old money billionaires turn to startups
A few decades ago, Asia’s billionaires made their fortunes through industries like petrochemicals, steel, and tobacco. Now some of those tycoons are eyeing startups for investment opportunities.
Asia-Pacific now has the most billionaires of any region, surpassing the US in 2015 thanks to the swelling concentration of wealth in India and China. Some of these wealthy individuals are beneficiaries of empires built by their parents, but quite a few are billionaires in their own right. For example, Zhou Qunfei, whose successful smartphone screen business has earned her the moniker “Touchscreen Queen,” began as a poor factory worker in Shenzhen. Today, she’s one of the wealthiest women in the world.
As startups become more lucrative, Asia’s billionaires are starting to pay attention – and throw in a fair bit of cash of their own. Here are ten billionaires in Asia that are investing in startups:
Valued at US$31.8 billion by Forbes, Li Ka-Shing is one of the wealthiest people in Asia.
Photo Credit: EdTech Stanford University School of Medicine.
His story is a classic tale of rags-to-riches. At 16, Li dropped out of college and started working at a factory after his father died of tuberculosis. When he was 22, he started his first factory, Cheung Kong Industries, which manufactured plastic flowers. That was the beginning of the Hong Kong billionaire’s fortune, which is now distributed across real estate, utilities, retail, and other sectors.
In 2007, Li invested US$60 million in Facebook, one of his earliest investments in a tech startup. Since then, the 88-year old has invested in more than 25 startups through Horizons Ventures, a venture capital fund for technology startups. The fund is run by Li’s companion, Solina Chau, who also heads the Li Ka-Shing Foundation.
To date, Horizons Ventures has invested in over 75 startups, including Deep Mind, Waze, Spotify, Slack, and Siri.
Once called “China’s Elon Musk” for buying out an American hybrid-electric car company, Lu Guanqiu is the founder of Wanxiang Group, one of China’s largest automotive parts manufacturers. The conglomerate also has business in other traditional industries like real estate, finance, and electric power.
Lu Guanqiu acquired failed US auto startup Fisker in early 2014. Now it’s renamed Karma. This first model, the Karma Revero, will hit North America in September.
photo by Xinhua News
Recently, however, the 71-year-old and his company have started investing in blockchain, the technology that first emerged as the database and verification system behind Bitcoin. In 2015, Wanxiang created a non-profit called Blockchain Labs dedicated to the research and application of blockchain technology. Shortly after, Wanxiang backed a US$50 million venture capital fund called Fenbushi Capital for blockchain applications as the sole limited partner.
Though Fenbushi Capital is less than a year old, the VC has already invested in numerous startups that make use of blockchain tech, such as Everledger, a startup that identifies and verifies diamond transactions.
Guo Guangchang, sometimes called “China’s Warren Buffett,” is the founder of Fosun International, an investment company and international conglomerate.
Photo Credit: Fosun Group.
Fosun’s investments in overseas companies and insurance capital have Guo valued at US$5.7 billion. The Chinese firm invests in a myriad of industries, including steel, real estate, healthcare, and pharmaceuticals.
In 2014, Guo expanded Fosun’s reach to include technology startups. Then it launched Fosun Kinzon Capital to put money into early and growth stage technology startups. Most recently, Fosun’s investment arm funded uSens, an augmented and virtual reality startup, and Sure, a personal insurance app.
Adi Godrej is the chairman of Godrej Group, a massive family-run firm more than a hundred years old. Though it focuses on consumer goods like personal care products, its subsidiaries also work in real estate, industrial engineering, agricultural products, and more.
In 2010, Godrej Agrovet, the agribusiness arm, started investing in agriculture technology startups through a US$50 million VC wing called Omnivore Capital.
That now has 11 startups in its portfolio, which covers the gamut from aquaculture automation to environmentally-friendly water pumping solutions for rural communities.
Indian billionaire Kumar Birla assumed the mantle of leadership in the family business, Aditya Birla Group, at the age of 28. The multinational covers a wide range of industries, including mining, retail, telecommunications, and textiles.
Photo Credit: Aditya Birla Group.
In recent years, the fairly traditional behemoth has been exploring more modern business opportunities. Last October, Birla, now 49, launched an online fashion portal for clothing, footwear, and accessories called Abof, which stands for “all about fashion.”
Birla last year started looking at startups for business opportunities and launched Aditya Birla Bizlabs to connect Indian startups with the Aditya Birla Group’s expertise and customer reach.
The project is now collaborating with over 20 startups in retail, financial services, and data analytics, some of which may receive investment from the Aditya Birla Group.
Sajjan Jindal is part of a family of billionaires thanks to his late father, OP Jindal, who started a steel business that is now a multi-billion dollar Indian company called the Jindal Group.
Photo credit: worldsteel.
Sajjan, 56, is the chairman of the JSW Group, another part of the Jindal Group that covers steel, cement, energy, and infrastructure.
Early-stage technology startups could soon become part of the Jindal family’s expansive portfolio. Last September, Sajjan launched the JSW Venture Fund, which will be supervised by his heir, Parth Jindal. The VC last month invested in Purpelle, a beauty products and services startup.
Rakesh Jhunjhunwala, sometimes called “India’s Warren Buffet,” is an investor and trader who manages money via his asset management company, Rare Enterprises.
Photo credit: Sagar Karkhanis.
The Indian billionaire has amassed most of his wealth through investments in traditional sectors, such construction and pharmaceuticals.
At the end of last year, Jhunjhunwala made the leap into investing in startups by backing Exfinity Venture Partners, which targets startups in India and the US. The VC firm’s portfolio includes Mad Street Den, an AI and computer vision company, and LensBricks, which develops smart sensing technology.
Martin Hartono is the scion of one of the wealthiest men in Indonesia. His multi-billion dollar inheritance comes from the Djarum Group, an tobacco company owned and run by his father, Robert Budi Hartono.
Photo Credit: GDP Venture.
Martin Hartono spent twelve years at the family business before breaking away in 2010 to start GDP Ventures, a private investment fund that focuses on Indonesian startups. It has so far invested in 17 startups, including Kaskus, the largest forum site in Indonesia, and ecommerce site Blibli.
Mochtar Riady is the founder of Lippo Group, which is currently run by his sons, James and Stephen Riady. It covers multiple sectors including retail, real estate, banking, and healthcare.
Photo Credit: Lippo Group.
Lippo Group is now very active in Indonesia’s ecommerce and technology scene. Last February, the company kickstarted the online version of the family’s department chain store, Matahari, with a US$500 million lump sum. The Amazon-esque site is called MatahariMall.
Lippo has also backed Venturra Capital, a US$150 million fund for Indonesian and Southeast Asian startups. Mochtar’s son, John, is one of the trip of managing partners at Venturra.
Eka Tjipta Widjaja
Eka Tjipta Widjaja is a Chinese-Indonesian palm oil tycoon and the founder of the Sinar Mas Group. As conglomerates are wont to do, Indonesian-based Sinar Mas operates in a variety of traditional sectors, including real estate, agribusiness, mining, and financial services.
Photo Credit: Mudiantoh.
Sinar Mas has also invested a fair amount of capital into Southeast Asia’s startups, such as aCommerce and HappyFresh, through its venture capital arm, Sinar Mas Digital Ventures. It’s also a partner of Ardent Capital, a VC that invests in ecommerce startups in Indonesia and Southeast Asia.