A: Valuation expectation has definitely declined, whether it’s reasonable is still subject to one’s judgment. So it’s a good time to invest, that’s why we decided to close the fund as soon as possible to start making good investments.
Q: Do you still find valuations expensive?
A: Well, as an investor, you always want to see valuation go down even more. But on the flip side, cost of a start-up has gone up a lot because talent acquisition has become more expensive. That’s an inflation factor.
Q: Do you see the venture market cool down even more?
A: I think the market will cool down a bit more, but once investors regain confidence, we will see another round of more active investments.
Q: In your portfolio, there are three unicorns: Didi Kuaidi, Mogujie, and merged Meituan Dianping. There are over 20 unicorns in China. Do you see the number of Chinese unicorns decline or increase in the next few years?
A: Investors are likely to be more cautions in the short to medium term. But memories are short. It has always been through cycles like these, so the heat will always come back again.
Q: What lessons you have learned from companies that have failed in your portfolio?
A: It really comes down to timing, whether it’s the right time to launch a product, or if users will want that particular product right now. Also a lot of times, failures are due to people factors.
Q: You are an entrepreneur yourself. What aspiration do you have for Aemba?
A: I like to see Ameba to be a leading brand in tech investment. Your brand is the result of everything. If people respect this brand, then you’ve done a great job.
About Andrew Teoh:
Andrew Teoh is the founding partner of Ameba Capital, a venture capital firm focused on early-stage investments in Chinese technology sector. Previously, Teoh was the vice president and head of corporate finance at Alibaba, having been involved in Yahoo’s US$1bn strategic investment in Alibaba, Alibaba.com’s 2007 IPO and Aipay’s restructuring.