On July 21st 2022, AAIA is honored to invite the Founder Partner at SAV (Sacle Asia Venture), Wally Wang to discuss investment trends. He will share his insights on how to find investment opportunities in an uncertain global economy? In-depth analysis of artificial intelligence, Web 3.0, Blockchain, software, Saas, biotechnology and hard tech investment opportunities. Wally is a veteran of enterprise software and has been involved in operations including Lattice Engines in digital marketing and DataVisor (invested by Sequoia and NEA) in cybersecurity.
Guest Speaker Introduction
Wally received a bachelor’s degree from Tsinghua University and then a Ph.D. program at NYU Stern School of Business. He is a visiting scholar at Carnegie Mellon University. Prior to founding SAV, Wally had been advising family offices and listed conglomerates on investments in software and hard technology and served on the boards of portfolio companies with a total investment of $300 million.
Why we focus on the enterprise software?
More and more cloud-based software has been developed in the past 20 years. From Paypal in 2000, linkedin in 2010 to companies like Snowflake, more and more software companies adopt cloud technologies.
Since 2014, market cap of new IPO stock in the software industry have increased by more than 11 times. The growth rate of revenue and market cap of top software companies in the primary market is higher than that in the secondary market, but the valuation multiples are lower. With remote work becomes the new “norm”, the enterprise service software industry is transforming at a faster pace. Privacy protection and cybersecurity have increasingly become core business priorities that companies cannot ignore.
Automation and intelligence continue to spread in all walks of life
As labor cost gets higher, more focus is on automations through AI. There are an increasing number of software being developed that focuses automations and enhance productivities. APIs and developer tools also boost connectivity and increase productivity of many tech companies. Therefore, growing numbers of companies have appeared in developing APIs.
Infrastructure investment in the next 10 years in China mainland：
Particularly infrastructure constructure including telecommunication, information etc. Main support goes into data centers, industry internet, Artificial Intelligence development. Several following examples were also discussed.
Pandemic facilitates the automations and intelligence development in large companies such as robotics.
Analysis on industry internet applications in specific industry sectors:
Integration of industry internet with different industry sectors, such as heavy industry, machinery manufacturing, energy, petrochemical industry, etc., has been some of the focusing areas. In the future, industry internet is expected to be widely used in light industry, food and other industries.
AI in Healthcare:
There are 5 categories in AI in Healthcare: automation and support to healthcare workers, medical images diagnosis in pathology, personalized healthcare/disease diagnosis, populational health and outcome prediction, and drug discovery.
Especially for AI in Drug Discovery, it poses a fast-growing application model in real-life and is expected to flourish with huge profits.
AI in Drug Discovery：
Contract research organization (CRO) a product of specialization, segmentation and risk leveling in the pharmaceutical industry. AI can significantly help reduce the amount of time required for drug development, and it is expected that more applications of AI will be in diagnosis and patient outcome predictions.
From biomarker detection, molecules filters, patient outcome predictions to finally that AI would be able to handle the entire process from drug design to testing, which can revolutionize the traditional pharmaceutical industry.
Q & A
Q: In the field of high-tech investment, what is the relationship between risk and investment?
A: Team and market size, then more details of specific projects like prices, etc. are some of the important factors we consider in early investments.
Q: What are some of the attributes that you think is important in co-founders?
A: It is important to have complimentary talents in a team. Furthermore, a group of resourceful CEOs help make better decisions and predictions on markets growth. It is also key to have an experienced team who having done enough market survey or having long period of teamwork.
Q: Over the past 10 years, what are some of the differences you see in terms of technology developments in the US and Mainland China? How would directions of technology developments diverge for the two countries?
A: From my perspective, it has become difficult to for either China or the US to imitate each other on technology developments due to discrepancies in their respective economic development and geopolitics. The US would likely focus more on software developments and business models revolutions, whereas China would focus more on hardware and infrastructure constructions.
Q: Would Web3 be a profitable market to start a company?
A: The short answer is no.
Q: Are there successful cases of AI applications in pharma?
A: Many projects are still in a development stage and research have been going on in the field but there has not been an established end-to-end model.
Q: What qualities are expected from a company hoping to tread into the field of AI applications in drug developments?
A: It is expected from such companies to have talents having both technical backgrounds in AI, plus knowledge and understanding of drug development.
Q: For a freshly graduated college student, would you recommend him/her to do investments such as PE, VC?
A: This is a case-by-case situation. It depends on whether he/she can enter a top investment company. By and large, most people cannot enter such top companies or having the opportunities to have hands-on experiences on investing highly profitable projects due to high standards. It would probably be more beneficial for a new grad to accumulate working experiences in industries.
Q: What suggestions would you give to investors in medical and healthcare fields?
A: The answer will also vary by cases. It will depend on the stage of investment and many other factors.
Q: For recent investment of SAV, what is the usual investment size?
A: 1M to 10M for early-stage investments and 30-40M for middle-to-late investments.