BROADCASTS.com

In this episode of China Money Podcast, guest Andrew Teoh, founding partner of Ameba Capital, spoke to our host Nina Xiang. Teoh shared his views on potential mergers among Chinese tech companies that could take place in 2016, what start-ups China's BAT (Baidu, Alibaba, and Tencent) are looking to acquire right now, and if Chinese venture capital investments will cool further next year. Don't forget to subscribe to China Money Podcast for free in the iTunes store, or subscribe to China Money Network weekly newsletters. You can also subscribe to China Money Podcast’s Youtube channel or Youku channel. Q: Give us a brief introduction of Ameba Capital? A: We were founded in 2011 by three partners, former Kingsoft chief financial officer Kevin Wang, Koubei.com's founder Frank Lee, and myself. We focus on making early-stage investments in the technology sector in China, and have invested in numerous companies. Some of our more well known portfolio companies include Kuaidi, or now Didi Kuaidi, Mogujie, and the merged Meituan Dianping. Q: That's three unicorns right there, but we will talk about that later. You also had an interesting career before co-founding Ameba. Can you tell us a bit more? A: I was born and grew up in Malaysia, but also worked and lived in Australia, Hong Kong and Beijing. I joined Alibaba in 2005, when the company had slightly over 1,000 employees. By the time I left, Alibaba had over 20,000 employees. I was involved in Yahoo's investment in Alibaba, Alibaba.com's Hong Kong initial public offering in 2007, and Alipay's restructuring, during a period of the company's rapid growth. Q: What did that experience teach you about investing as a venture investor? A: I realized that a company is very much like any other living form. It grows and changes. I was dealing with issues and transactions signifying the stage of growth the company was in. Now as an investor in small start-ups, I'm dealing with early-stage growth similar to a child's growth. I was able to use my experience at Alibaba to help start-ups enter their next phase of expansion, and help them solve the challenges in that process. Q: Ameba Capital closed a second fund, bringing total asset-under-management to RMB1 billion (US$160 million). How was the fundraising process? A: It didn't take that long. The fund was filled up just from commitments from existing investors to our first fund. My partners and I are still the single largest group of investors in the fund. Q: Would you consider raising a U.S. dollar fund? A: I will never rule that out, but the capital markets in China have changed a lot during the past year. RMB as a form of investment currency will become more important, especially in the tech world. When I started Ameba, it was rare to see RMB-denominated institutions investing in technologies because a lot of capital was from U.S. dollar funds, and exits were all overseas. But that is changing rapidly. There are more exits domestically, also more M&A happening among domestic firms. Q: So you see more RMB funds to be raised, more domestic listings and deals happening in the future? A: Yes, we will see that both in early-stage and late-stage investments. I think that's very healthy, and it shows that our format has worked. Q: How much do you invest per deal, and how many companies have you invested in total? A: For our second fund, we invest in pre-A and series A rounds, so from a few million RMB to tens of millions RMB. Cumulatively, we have backed around 60 companies. Q: In terms of strategy, will there be any changes from your previous focus on e-commerce, corporate services, advertising, etc.? A: We will continue our strategy to focus on the data aspect of e-commerce, a very niche market of advertising. We also like a few verticals such as healthcare and education. Our sector focus hasn't really changed, but the companies operating in these areas have changed...