Capital for Asia, rooted in Asia: how Singapore’s Jenny Lee wants to rethink venture capital

However, Lee’s path to becoming one of Asia’s most prominent venture capitalists began in Singapore’s air force hangars as an engineer working on fighter jet engines. This hands-on experience helps her as an investor today, giving her a “common language” that allows her to talk with tech entrepreneurs about projects from their conceptual stages to their final delivery.

Lee earned an MBA from Northwestern’s Kellogg School of Management right at the height of the dotcom boom in 2001. But that only encouraged her: “It can’t get any worse, right?” she says. She borrowed 300,000 Singapore dollars ($220,000) to repay the firm that paid for her business degree and moved to Hong Kong to take advantage of China’s booming internet sector. She established the first GGV Capital office in China in 2005.

Nearly two decades later, as the senior managing partner behind Granite Asia – a spin-off of GGV Capital with $5 billion in assets under management – Lee ranks 33rd on Fortune’s Most Powerful Women Asia list.

Granite Asia owes its beginning to geopolitics. In July 2023, a US House of Representatives committee said it would investigate investments by US venture capital firms, including GGV Capital, in China’s AI and semiconductor sectors.

Two months later, GGV announced it was splitting into two: a US-based fund called Notable Capital and a Singapore-based fund focused on China and Southeast Asia.

In March, Lee took over the reins of the now independent Asian fund, called Granite Asia as a callback to GGV Capital’s original name, Granite Global Ventures.

What is your strategy now that Granite Asia is in charge of its own destiny?

Lee: I have always felt that there is a lack of concentration of capital in Asia to Asian companies. You have a diverse region, both an aging population and a young population, climate change issues, geopolitical concerns, all that stuff.

With the rebranding, our vision is to become the dominant capital platform for startups, founders and businesses in the region: capital for the region that is anchored in the region.

How is the US-China relationship changing the investment world? Should investors be concerned about political risk?

As investors, we must have the ability to read the tea leaves. In Asia, the tea leaves show a very obvious bifurcation. As we move forward, the globe will move into cluster economies. Today, it’s the US and China. Tomorrow, it may be another region.

This is quite a dynamic chess game. Products need to be a little more nuanced, a little more regional and a little more country-specific. It helps in attracting the right talent, in attracting the right deal flow and also in achieving the goal that the country wants to set. A single fund model will not work going forward.

The real consideration will be exits and liquidity, regardless of whether any policy or political action reduces a company’s ability to go public, either locally or abroad.

Granite Asia is expanding into new types of financing such as private credit. Is it better suited to what Asian firms need?

Enterprise-level companies in Asia are entering the second or third generation of succession planning. Historically, they have grown their businesses by bootstrapping with local bank loans. But as they navigate the next 20 years, there is a willingness and an openness to engage with venture capital.

How can they now ensure that the company moves to the next generation with the right build? It may be opening up the board to independent investors or funding who have the experience to help them grow. And maybe they’ll take credit as a way to get to know these investors.

In Hong Kong, and even in Singapore, there is a generation where the owner may not want to sell outright. There is a gap between an acquisition and the tech-centric world of venture capital.

What opportunities are you looking at in Asia?

One theme is around health. We cannot rely on the West to do all the sequencing and drug discovery, because not all discoveries will be completely suitable for Asia.

With geopolitics has come a new opportunity: supply chain diversification. It could be IP production in Singapore and the Middle East, then assembly in larger markets like Indonesia, Malaysia, Thailand, Vietnam, even as far as India.

It leverages the Global South and the wider Asia region to provide an alternative supply chain to businesses around the world.

The value of private equity deals in Southeast Asia fell by about 40 percent last year, according to Bain. What needs to be done to unlock investment in the region?

It’s a supply and demand issue. You need to ensure that Asia has capital at all stages of the company’s evolution and growth to ensure that the capital is there when companies need to grow.

You have to have the Taylor Swift of IPOs, one that everyone is eager to join. But that in itself is not enough. You need good issuers: Asian startups that want to list in Asia. Founders probably want to be here: brands and products have more appeal here. But if you don’t fix the capital and investment issues here, companies can’t close the loop. Having lots of capital but no big issuers doesn’t solve the problem.

Is gender representation improving in Asia’s tech sector? Do you see more female founders?

Yes, we are. I just met a female entrepreneur. He is fifty years old. She was a homemaker and caregiver for the past 30 years. Now she is an empty nester and therefore has time for her passion. She is starting a new food brand in the healthy snack space.

Diversity is good. Women leaders who have focused so much on building their careers in large companies now in their fifties, sixties and seventies have the opportunity to be mentors.

This article appears in the October/November 2024 issue of wealth with the title “Capital for Asia, rooted in Asia”.