Hong Kong-based venture capitalist Gary Lau Chi-keung was one of the 10,000 investors who attended OurCrowd Global Investor Summit, held earlier this month in Jerusalem.
Hosted by OurCrowd, a Jerusalem-based crowdfunding investment platform, the conference is considered the biggest equity crowdfunding event in the world.
Lau said his firm has been supporting foreign startups, helping them to set up production units and finding customers, particularly in China.
“[We can do that] because we have a high level of understanding of both [foreign and Chinese] parties, allowing us to build up a strong connection with them,” Lau told the Hong Kong Economic Journal in an interview.
As a startup investor in both China and Israel with over four years of investing experience, Lau said the Chinese tech sector is growing fast, but compared with Israeli startups, Chinese tech firms are very focused on specific types of technology.
“An [artificial intelligence] startup would just focus on AI,” while Israeli startups have been good at integrating multiple technologies in product development, he observed.
“Many Chinese tech startups have the backing of the government or the local universities. In general, they don’t have a strong desire for return on investment.
“And it would take one to two years for the product to launch, which is too long for a fast-growing market like China.”
In recent years, Lau has turned to Europe, Australia and Israel in search of tech startups with well-developed technologies that appeal to the Chinese market. His goal is to bring them to China.
Lau is not alone in looking overseas for startup targets. According to data from Israel’s IVC Research Centre, Chinese investment in Israel rose 100 percent each year from 2012 to 2015. In 2015 alone, Chinese investors accounted for 40 percent of the venture capital investment in the country.
But along with the sharp growth in Chinese investment came growing accusations of Chinese firms stealing technology and patents from Israeli startups.
Lau admitted that when it comes to patented technology, Israeli firms hardly trust Chinese investors.
“But they do have faith in Hong Kong’s legal system, so in a way that showcases one of Hong Kong’s conventional competitive advantages,” he said.
This article appeared in the Hong Kong Economic Journal on Feb 26
Translation by Ben Ng with additional reporting
[Chinese version 中文版]
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