Gobi Partners' Tang on Recent Deals

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00:00I mean, it seems like you have been pretty busy. Seven exits this year. What's the outlook for

00:052026 look like for you? Look, I mean, like we hope that the market continues to stay good and,

00:11you know, the IPO markets and the secondaries continue to perform. Obviously, you know,

00:17there's a lot of talk of bubbles and things like this. You know, I think we just continue to invest

00:22in fundamentals and long term. So, you know, as early stage investors, I mean, I think we're

00:27focusing a lot on frontier technologies, deep technology areas coming out of universities

00:32and the like. And so, you know, I think hopefully we'll be a little bit more immune to cycles. And,

00:38you know, if the bubble does break, then, you know, at least we'll well set for the future.

00:43Do I think the point you just made, you're very connected to really what's happening on the ground

00:48and all these frontier technologies. What's what are the attitudes of these founders right now?

00:53How do they feel about the current environment? Because when you look at the public market,

00:58there seems to be a bubble. Yeah, I don't know how it how does it feel on the ground at that level?

01:01Well, to be honest, I mean, at the early stage, most founders are still focused on their their

01:05own product and building their own companies. Right. And so, you know, they believe in a long term

01:09vision of, you know, where their product will be in five years and 10 years. I mean, I don't think

01:13anyone is really thinking about, you know, an IPO pathway or looking the list and in the near term.

01:18And I mean, I think what they're what they're dealing with now is just trying to find product

01:21market fits, trying to think about what is the future of this technology. Right.

01:26And these days, I think a lot of founders, especially coming out of China,

01:30most people are thinking about global markets. Right. And so they're thinking about how to set

01:33up abroad, thinking about where to expand and how to do that successfully. So, you know,

01:38I think these days, I mean, I think it's really the public market investors,

01:41institutional investors that are that are more worried.

01:44Given the whole story, I'm just wondering, there's so we talk about the amounts of money

01:49that's been sloshed around, how people are, you know, tens of billions of dollars that are really

01:52being thrown into it. Do you feel like there's just too much money chasing too little deals right

01:57now? I think that obviously there there has been a narrative that's been spun in the U.S.

02:02And, you know, I think the U.S. has capital markets that are very deep. And so there is a lot of

02:07money that is going after some of these, you know, more talented or, you know, the entrepreneurs with

02:12the strong backgrounds and, you know, the track records and all this. I think obviously here in

02:16Asia, the capital markets are not as deep. And so, you know, there's less money, but, you know,

02:21they're still chasing these strong founders and people with the backgrounds. You know, I would say

02:27that, you know, because there is less money out here, the founders and the startups are trying

02:33alternate ways to to bring these products to market. Right. And so it's not necessarily bigger

02:38is better out here. I think everyone's trying to find the best use cases, the best industries

02:42in alternate pathways. Right. And so I think that's something that that we're seeing. And,

02:47you know, with this creativity, I think there will be new breakthroughs.

02:52I'm not sure if you were in the there was one of the discussion in the panels. I think it was

02:56yesterday or the day before our first day. Mark Rowan of Apollo had a very interesting comment. I want

03:01to get your thoughts on that. He said, you know, the the private markets have changed substantially

03:06over over years in that everyone's point has been a lot of money, a lot of interest going into that.

03:10And, you know, as a private company, you now have the option of staying private for longer because

03:18you're able to raise, frankly, the same amount of money in the private markets that you would have

03:22as an idea. How does that have you observed any of those trends in your world? And how does that

03:26change things for a player like you? Yeah, no, for sure. I mean, I think obviously for for companies

03:31that have been able to grow to a certain scale and have been able to prove out their business

03:36model, you know, I think that they don't have that much pressure, especially if they have a very

03:42strong cash position, either the revenue generating or they're turning even profitable. And, you know,

03:47I think then they have a lot of interest on the secondary markets. And so even with earlier stage

03:52investors that want to exit, they actually can generate enough interest on the secondary so that,

03:56you know, they can help facilitate those transactions. So they actually don't need to list.

04:01And so I think, you know, with more uncertain market kind of prospects, I think these companies

04:07will choose to stay private for longer. Although, you know, I was speaking to some entrepreneurs the

04:13other day and they're just like, you know, there are other benefits to listing, right? I mean,

04:16like in terms of added credibility, in terms of, you know, access to more different sources of

04:22capital. So, you know, I think every company will have its own situation. Sure. What tell us more

04:27about this partnership that you have with the Hong Kong Investment Corp, the Sovereign Wealth Fund,

04:31also with some of the universities when it comes to kind of this technological transfer and the like,

04:36why focus on universities and these deals? Yeah, no. So we've been very lucky, obviously. I mean,

04:41like we've been, I've been based and operating in Hong Kong for about 10 years now, one of the

04:46earliest investors in the space. You know, I think as a key proponent of that ecosystem, we've been

04:50very lucky now to partner with the HKIC. And, you know, this year just, we actually announced a new

04:56fund focused on the Hong Kong university ecosystem. And, you know, that's an area where we feel like

05:02there's a lot of opportunity going into the next decade. You know, this day and age, I mean,

05:06deep tech is the future, right? And so a lot of that deep tech will be driven from IP and the R&D

05:12efforts of these universities over the last few decades. There haven't been that many success cases

05:17in terms of commercialization here in Asia versus, you know, what you see at MIT or Stanford.

05:23And so I think that there is a huge opportunity here where, you know, Hong Kong is now home to

05:27five of the top 100 universities in the world, right? And, you know, those five are all in the

05:32top 10 in Asia. So, you know, Hong Kong universities rank number one in Asia. And, you know, I think

05:37that there is a lot of opportunity here. Going forward, we only see these universities continue to

05:42get better because, you know, there's a lot of talent coming back, right? And so whether that's from

05:46the U.S. or, you know, from other parts of the world, I think everybody is seeing the opportunity and

05:50the, you know, the government support and the institutional support out here. And so that draws

05:55a lot of talent back. And I think that will be a very interesting opportunity set going forward.

06:00Was that the thing that changed, the talent that's coming back? Because we were trying to pinpoint

06:05what the pivot point was. And suddenly, you know, Hong Kong was known as a traditional finance hub,

06:10not so much as a tech startup hub. And now, of course, people like you are looking at this.

06:15Yeah, no, I think it's like a confluence of a few different factors. Obviously, the talent coming

06:19back is one important one. But I think, you know, the government in Hong Kong has also just been

06:25very good in putting together all these ancillary programs and subsidy programs and grants and,

06:31you know, just being able to be active in funding this commercialization wave. The universities

06:39themselves are putting together their own funding programs, investing in their own ecosystem.

06:42And, you know, from the private market side, yeah, there's been a lot more interest in investors

06:47from not only Hong Kong, but, you know, from China and even the rest of the world to come in and look

06:53at these opportunities. So, you know, these days, I mean, like we're investing in very early stage

06:57startups, but very quickly, they're able to attract other investor interest. They're doing two, three

07:01rounds in a year. And so we're very lucky, right? I mean, in our fund, we've already deployed in four or five

07:06deals. And, you know, all of them have actually had up rounds already. So it's been a good time.

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