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Venture Capital
zwcpartners.com

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Investments

35

Funds

3

About ZWC Partners

ZWC Partners is a USD fund focused on early-to-mid stage investments, providing startup companies with capital and value-added services. It focuses primarily on the TMT and consumer sectors, with strong resources and experience in media, internet, fashion, retail, and other areas. Specific investment themes include new technologies, consumer spending upgrade, artificial intelligence, as well as the digitalization of media and consumer spending habits. The fund mainly invests during the Seed, Series A and B stages.

ZWC Partners Headquarter Location

Room 4102, Office Tower 2 Plaza 66, No 1266 West Nan Jing Road

Shanghai, Shanghai,

China

+86 21 6203 6212

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Latest ZWC Partners News

Quiet accomplishments: Q&A with Michael Yao, partner at ZWC Partners

May 9, 2022

The investment firm localizes by performing deep research on the ground. ZWC Partners’ most recent win was GoTo’s IPO. As a backer of Tokopedia and GoPlay, the investment firm was able to capitalize on its team’s knowledge of the way successful Chinese e-commerce companies built their platforms, and offer advice on how to do the same in Southeast Asia. Now, the investment firm, which has offices in Singapore and Jakarta, is eyeing even more opportunities in the region. KrASIA spoke with Michael Yao, partner at ZWC Partners, to find out what sets ZWC apart from other investment firms in Southeast Asia and China. The following interview has been edited for brevity and clarity. KrASIA (Kr): How would you introduce ZWC Partners to those who may not be familiar with the firm? Michael Yao (MY): Our fund has always been technology-driven. We focus on emerging markets in Asia, including China and Southeast Asia. This is because there’s a young generation with rising income and general familiarity with consumer technology in these markets. We specifically make early growth stage investments. Kr: What does ZWC bring to the table that local or regional investment firms in Southeast Asia may not be able to offer? MY: There are three things. The first is that we are a localized fund. We have teams on the ground, and we understand the markets. Second, since we have been in China much longer than in Southeast Asia, we have experienced the cycles of technology adoption, so we know the key success factors for winning. That helps us give insights to local entrepreneurs when they want to understand how to build companies. Third, we can move talented engineers from China to Southeast Asia, where it may be scarce. There are some businesses that may benefit from this type of synergy across borders. Kr: What are your typical check sizes for startups in Southeast Asia? MY: It depends on each startup’s stage of development. If they are in their early stages, then it could be USD 2 million to USD 5 million. For companies in their later stages, the check can be USD 30 million to USD 50 million. Our check sizes are more flexible than typical VCs in Southeast Asia. For companies that don’t want to spend a lot of time raising funds, we can invest in multiple rounds and become their long-term partners up to their IPO. Michael Yao, partner at ZWC Partners, said the investment firm is building a sizable portfolio in Southeast Asia. Photo courtesy of ZWC Partners. Kr: You mentioned that ZWC can reference the growth history of Chinese tech companies. One comment that we hear frequently is that the tech scene in Southeast Asia is like China’s, but ten years ago. Is this an evaluation that you agree with? MY: I don’t think so. Each country has its unique characteristics, including the culture, the distribution channels, and the supply chain. There is always a twist. That’s why we emphasize our localization. With that said, some principles of business models remain the same no matter where they are applied, such as e-commerce. We can offer advice on how to run a platform business, when to increase monetization rate, and when it should emphasize its price to value. These are some of the generalized principles that are then adapted for local markets. Kr: Has there been a specific “twist” in Southeast Asia that surprised you? MY: Tokopedia is a great example. In China, there are two options for e-commerce. There is JD.com’s model, which is a self-operated e-commerce platform. Another is a platform business, like Alibaba. Which one is the right business model for Tokopedia in Indonesia? Both work in China. After performing much analysis and careful comparisons in 2017, we determined that the platform business model would work best in the context of Indonesia at that point in time. This would be healthier than building a lot of infrastructure or self-operation. There are some investors who viewed emerging markets the same as China but a few years behind. They made investments in those markets while copying business models that were developed in China, but they burned a lot of cash, and those models didn’t work. They lacked in-depth knowledge of the local market. Kr: In Q2 2019, ZWC said it was ready to invest USD 300 million in Southeast Asia over three years. We’re approaching the three-year mark since that statement was made. Did the firm hit that target? MY: We’ve invested in multiple rounds for Tokopedia since 2017. We’ve also invested in a couple more companies. I can say that we are on track to build a sizable portfolio in Southeast Asia. RELATED ARTICLE

ZWC Partners Investments

35 Investments

ZWC Partners has made 35 investments. Their latest investment was in WeShine as part of their Series B on February 2, 2022.

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ZWC Partners Investments Activity

investments chart

Date

Round

Company

Amount

New?

Co-Investors

Sources

2/22/2022

Series B

WeShine

$47.42M

Yes

5

11/29/2021

Seed VC - II

Poetry and Kaleidoscope

Yes

4

11/29/2021

Private Equity - II

Datong

$234.9M

Yes

3

11/17/2021

Series B

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10

11/15/2021

Series C

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$99M

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10

Date

2/22/2022

11/29/2021

11/29/2021

11/17/2021

11/15/2021

Round

Series B

Seed VC - II

Private Equity - II

Series B

Series C

Company

WeShine

Poetry and Kaleidoscope

Datong

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Amount

$47.42M

$234.9M

$99M

New?

Yes

Yes

Yes

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Co-Investors

Sources

5

4

3

10

10

ZWC Partners Fund History

3 Fund Histories

ZWC Partners has 3 funds, including USD Fund II.

Closing Date

Fund

Fund Type

Status

Amount

Sources

6/29/2021

USD Fund II

$773.23M

1

12/8/2020

USD Fund

$99M

10

5/23/2019

SEA Fund

$99M

10

Closing Date

6/29/2021

12/8/2020

5/23/2019

Fund

USD Fund II

USD Fund

SEA Fund

Fund Type

Status

Amount

$773.23M

$99M

$99M

Sources

1

10

10

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