Friday Letter: Global venture

Among the more eagerly anticipated venture capital fundraisings on the near horizon is one from a firm that started in 1999 with a seemingly heretical premise – that venture capital investing could be a global undertaking.  

At the time, ePlanet Ventures saw an international opportunity while most other venture firms were insisting on an “only in my back yard” approach.

The firm, led by Asad Jamal, is preparing to raise its second fund, which has a cover target of $500 million. Based on the success of its recent exits and the health of its remaining portfolio, the fundraising, handled by Merrill Lynch, could draw much more than that. 

ePlanet Ventures began life under the umbrella of Draper Fisher Jurvetson, one of the few venture capital firms to have a longstanding regional affiliate programme. Its first fund raised $640 million – impressive for a debut fund, but not entirely unusual given the vintage.

The firm has offices in Silicon Valley, Beijing, Shanghai, Singapore, Tokyo and London, and it also invests in the Israeli market. Its portfolio companies are similarly diverse. The two most high-profile ones are the wildly successful Chinese search engine Baidu, which currently trades on the Nasdaq with a $1.5 billion market capitalisation, and the European tech champion Skype, which last year was acquired by eBay for $4.1 billion.

As recently as three years ago, it was common to hear Silicon Valley venture capitalists say they didn’t want to travel more than an hour to spend time with an entrepreneur, such are the hands-on requirements of an early stage company. Today, however, even Silicon Valley start-ups must have a “China plan” or an “India strategy”. In Israel and Europe, new companies begin with an immediate focus on global customers and capital markets. Asia has produced a vanguard generation of entrepreneurs who are eager to access Western capital and connections. Few tech startups today are competitive without significant offshoring.

No surprise, then, that most of the big Silicon Valley firms have begun setting up alliances abroad, mostly in Asia.

Jamal himself is the picture of globalisation – educated in England, early career in Hong Kong, headquartered in California, lives on an airplane. The international VC community, as well as the Menlo Park backyarders, will be following Jamal’s progress with interest.