Hong Kong-based VC firm founded by women says industry needs to change male-driven culture
Founded by two female partners, Arbor Ventures says disruptive technologies investing needs multilateral thinking
Wei Hopeman, co-founder of Hong Kong-based venture capital firm Arbor Ventures, does not shy away from the topic of gender imbalance in the industry. She has a good reason for that: A study by Techcrunch from October 2017 found that women partners account for only 8 per cent of the world’s top 100 venture capital firms.
As a matter of fact, Hopeman says she sees clear benefits from gender diversity in venture investing.
“Venture capital investing involves taking educated risks and having the right skill sets to manage the risks in times of your investment running into trouble, rather than being ‘perfectionist’ as how women are often perceived,” Hopeman says. “While there is a big gender imbalance in the industry, that should not stop women from advancing in venture capital. Women can also see what they can do differently, for example, by turning an adversity into opportunity.”
Hopeman co-founded Arbor Ventures in Hong Kong with managing partner Melissa Guzy in 2014.
The Arbor team, which currently comprises 10 people but will soon expand with new hires this year, has over 50 per cent women and represent seven nationalities.
Hopeman says she believes diversity – in gender, and also in skill sets and experiences – helps bring about a different perspective when developing an investment thesis in today’s complex technology ecosystem.
Better gender balance is also about cultivating a different type of mentorship that women could bring to start-up entrepreneurs.
Greater gender diversity, she says, should help decision makers at venture capital firms think outside the traditional industry silos and assess disruptive technologies through a different lens. That is because the definitions of what constitute “financial technologies” have become increasingly blurred.
The way that financial services have evolved in Asia, in particular, has made it harder for investors to determine the circle of potential competitors or addressable market for a new technology, with those circles often overlapping.
Advances in big data management and artificial intelligence have ushered in fintech companies in China whose ultimate stakeholders could be an e-commerce or an internet media company. Seemingly irrelevant, these are often the companies that drive transaction flows to the services offered by fintech firms. Those players also change the equation on VC firms’ strategies on which strategic investors to engage or raise funds from.
Arbor Ventures is currently investing its second US$220 million fund.
Its typical initial investment ranges from US$3-7 million, with focus on providing seed funding and series-A financing. The International Finance Corporation, the investment arm of the World Bank, has invested US$15 million in the second fund.
About a quarter of Arbor Ventures’ over 20 portfolio companies are technology firms that are either based in China or target their services to the Chinese market. Arbor Ventures focuses primarily on fintech at the intersection of big data, financial services and digital commerce, such as “regtech” firms that offer solutions to help financial institutions in their regulatory compliance.
The firm takes a geographically balanced approach with its investment. For example, its fund is invested in Silicon Valley-based bitcoin wallet and cryptocurrencies investment app Abra. In the “regtech” space, its fund is also invested in New York-headquartered cyber risk intelligence firm EverCompliant, which offers solutions for detecting online merchant fraud or electronic money laundering. In China, it is invested in lu.com, a leading online lending and investment platform.