After riding Internet wave, Singapore's top China investor Jenny Lee bets on hardware

Jenny Lee, managing partner of GGV Capital.
Jenny Lee, managing partner of GGV Capital. PHOTO: GGV CAPITAL

BEIJING/HONG KONG (REUTERS) - Long before she became the first woman to figure in the top-10 on Forbes "Midas List"of leading venture capital investors this year, GGV Capital's Jenny Lee cut her teeth as an engineer on Singapore's fighter jets.

She went on to make millions of dollars betting on China's software and Internet boom - including buying into Xiaomi five years ago when the company had only a prototype of the smartphones that have since catapulted it up the global rankings and turned it into a US$45 billion (S$63 billion) enterprise.

Now, Ms Lee, 43, is going back to her hardware roots, predicting a renaissance for start-ups as China boosts technology and skills at factories, potentially triggering a wave of new inventions - from drones and robots to smart cars and beyond.

"Finally, after 15 years of investment in China, we're starting to see the real 'makers' come to play," Singapore-born Lee, who moved to China in 2005 to set up GGV's Shanghai office, said in one of several interviews.

GGV, founded in 2000 as Granite Global Ventures, has nearly US$2.7 billion across six funds, with early investments in e-commerce giant Alibaba Group Holding, ride-hailing app Didi Kuaidi and Tujia, a Chinese vacation rental firm similar to Airbnb Inc.

The venture capital firm invested in Alibaba when Jack Ma's group was valued at just US$200 million. It's now worth US$171 billion. Ms Lee also invested in UCWeb, which Alibaba bought for US$4 billion last year in China's biggest Internet sector deal.

China's cabinet this year unveiled the 'Internet Plus' and'Made in China 2025' plans to boost output through new investments and innovation as breakneck growth slows in the world's second-largest economy and labour costs rise.

Ms Lee sees a particularly attractive opportunity in China with these sweeping plans to digitize and automate the economy.

"China reinvents itself every 10 years, and you can see this in their policies - from the migration from low-cost labour to software-based IT personnel in 2000-05, to now precision manufacturing and automation," said Lee, who worked briefly as a banker at Morgan Stanley.

Ms Lee, a junior college doubles kayaking champion, recently invested in Chinese smart notebook start-up Xiaoniu and EHang, a drone maker that specialises in flight control software and is looking to expand into agricultural and industrial applications.

She has also looked into electric cars and autonomous driving and flight technologies, as an extension of the investments in EHang and electric scooter NIU.

Together with Hans Tung, another managing partner at GGV, Ms Lee has focused on hardware start-ups with a presence or founders in both China and the United States - firms better able to marry Chinese supply chain know-how with Western product design skills, Mr Tung said.

Ms Lee, a trailblazer in the male-dominated world of venture capital, says the industry is "gender agnostic," though she quips that she's as much at home with the guys on the golf course - "I drive 250 yards" - as she is having dinner with entrepreneurs at home with their family and kids.

Beyond crunching numbers on start-up businesses, Ms Lee says she works to simple metrics. "Have you invested? Have you helped companies? Have you made money for investors?"

"Start-ups aren't an object. They're successful because of the people behind them. It's about understanding the motivation behind the person. When we talked to (Xiaomi founder) Lei Jun, it's not saying 'oh, are you making a phone? What's in it?' He has this passion, he has to win. That's very important."

Executives who have worked with Ms Lee say she has strong analytical skills and a steely, decisive edge.

Tiak Koon Loh, CEO of Chinese tech consultancy Pactera and a longtime business partner, recalled when MS Lee fired a group of executives at a portfolio business in the early 2000s, something relatively unheard of at the time in the region.

"For her, business is business," he said.

For Ms Lee, though, there's more to it than that.

"I'm a very gut feel type of investor and my background is pretty unique. I'm a hard core engineer. I have a real love for the industry. I just love pulling up products and seeing things come to life."