A week is obviously not enough time to truly understand a market as massive and fascinating as China. Hell, it’s not really even enough time to adjust to the 12-hour time difference from New York. That said, each of the three visits I’ve taken to the country in the past two years has yielded some useful insights into my role as hardware editor here at TechCrunch.
Late last week, I got back from an eight-day trip to Shenzhen in the Guangdong Province of South China and nearby Hong Kong. In some respects, the cities are worlds apart, though a newly opened high-speed rail system has reduced the trip to 30 minutes. Customs issues aside, it’s the height of convenience. Though for political and cultural reasons I’ll not get into here, some have bemoaned the access it’s provided.
This particular visit was sort of a scouting trip. In November, TechCrunch will be hosting its first Hardware Battlefield event in a couple of years. Previous events had been held at CES for reasons of easy access to young startups. This time out, however, we’ve opted to go straight to the source.
For western startups looking to enter Asia and Asian startups expanding globally, more funding has become available as investors are increasingly looking to export local tech solutions to overseas markets.
Globally based venture capital firm White Star Capital has set up a new office in Hong Kong this month to capture entrepreneurs in the budding region as well as help its portfolio companies go to Asia. Founded by Eric Martineau-Fortin, who spent years conducting mergers and acquisitions at Merrill Lynch, and Jean-Francois Marcoux, who sold his gaming startup Ludia to FermantleMedia, White Star has over the last decade backed a spectrum of early-stage companies across several continents.
Currently investing with eight partners spread across seven cities, White Star’s portfolio spans from New York-based healthy meal startup Freshly, rewards app Drop out of Toronto, on-demand photo platform Meero from Paris and dog food startup Butternut Box in London.
Beginning in 2017, Martineau-Fortin and his partners began looking eastward. They decided to initially exclude China as the market was already crowded with no shortage of funding available, leading to much larger investment round sizes compared to the U.S. and Europe as well as notoriously high valuations.
The investor also believed “cultural differences in both consumer and enterprise behavior” require different regional strategies. Whilst certain Asian companies specializing in artificial intelligence, fintech, enterprise software and micro-mobility share some commonalities with Western counterparts, others such as e-commerce businesses remain, still, quite distinct in Asia.
“Having said this, there is also a number of fabulously interesting ecosystems and countries outside of Hong Kong and China that are sometimes forgotten by North American and European-based investors, such as Japan, Korea, Singapore and Taipei. Those are also very advanced regions with great schools, great engineers having certainly easy access to capital but not always the ability …Read More
With increased pressure on Chinese manufacturers like Huawei and ZTE, Shenzhen-based drone giant DJI has no doubt had cause for concern of late. In late-2017, the U.S. government’s Immigration and Customs Enforcement office raised concern that the company’s camera-equipped flying machines could be sending data back to China.
A few weeks back, the Department of Homeland Security similarly raised warning over commercial drones from China. In a hearing entitled “Drone Security: Enhancing Innovation and Mitigating Supply Chain Risks” last week, meanwhile, the National Defense University’s Harry Wingo told the Senate Transportation Subcommittee, “American geospatial information is flown to Chinese data centers at an unprecedented level. This literally gives a Chinese company a view from above of our nation.”
DJI fired back in a letter provided to TechCrunch, noting,
Because the drone industry is becoming an increasingly critical engine for small American businesses as well as the entire U.S. economy, it is essential that decisions affecting key components of the industry are based on fact. We are deeply concerned that, left unchecked, the unsubstantiated speculation and inaccurate information presented during your Subcommittee hearing will put the entire U.S. drone industry at risk, causing a ripple effect that will stunt economic growth and handcuff public servants who use DJI drones to protect the public and save lives.
The letter also breaks down some of the finer points of the discussion as follows,
DJI drones do not share flight logs, photos or videos unless the drone pilot deliberately chooses to do so. They do not automatically send flight data to China or anywhere else. They do not automatically transmit photos or videos over the internet. This data stays solely on the drone and on the pilot’s mobile device. DJI cannot share customer data it never receives.
DJI’s professional pilot app