I believe the first half of 2020 was a massive turning point in human history, economically, socially and even personally. COVID-19 forced everyone, be it countries, companies or each of us to reflect on how we live, work and play. It is transformational.
When we started Venturous, we have a strong hunch that the 3rd generation internet (the Smart City internet), with its 5G + AI + IoT, shall transform every aspect of our city living. From our position in the heart of technology in Beijing, China, we felt the tidal wave sweeping China and its cities into a 2nd transformation (第二次改革开放). But never did we imagine a global pandemic would be the catalyst and rocket booster to fast track it.
Digital transformation in China is speeding up. The news of the US$ 3.8 trillion government stimulus spending on digital infrastructure over just the next 5 years is big. Meanwhile, clear signs are emerging of the new all-digital economy. Traditional giants (Goliath) fall, as tech unicorns (David) rise. Just as many industry leaders are desperately seeking transformation for survival in the new digital economic reality.
We are leveraging this crisis as a golden opportunity to capture the target technology leaders that we have been courting for a long while. As others run to safety, our stance is to prudently pick up best assets at ‘bargain’ prices. Fleeting chances appear at every crisis. This time, with infinite QE, playing offense is the best defense.
The two investments we made are both pre-IPO technology leaders in their verticals, with solid net profits and demonstrated resilience to the downturn, priced with a big ‘margin of safety’ compared to its post-COVID growth prospect.
As the Oracle of Omaha said, investing is about swinging the bat once in a blue moon. And be greedy when others are fearful. In tech investing, we are one of the best prepared for this blue moon.