ForbesAsia-April2018

APRIL 2018 FORBES ASIA | 63

INNOVATION FACTORIES

The Next Frontier for Jim Breyer:

China and Blockchain

F

amed venture capitalist Jim Brey-

er made his fortune largely by in-

vesting in Silicon Valley. Now he

is increasingly looking East, where op-

portunities are beckoning in China.

he billionaire investor (No. 57 on

the Midas List), best known for his

early bet on Facebook, has a long his-

tory of investing in the Middle King-

dom. hrough a partnership with local

investment irm IDG Capital—an or-

ganization he irst got to know during

a 2004 trip to China and now serves as

lead strategic advisor—Breyer backed

Chinese tech powerhouses, including

ride-sharing irm Didi Chuxing and

smartphone maker Xiaomi. Today he is

looking closely at a number of potential

investments in areas including block-

chain, health care and inancial servic-

es, allocating tens of millions of dollars a

year—or a third of Breyer Capital’s total

funds—to promising startups in the

world’s second-largest economy, he told

Forbes during a recent interview.

Of particular interest is blockchain,

the technology underpinning digi-

tal coin transactions that is essential-

ly about building secured data stor-

age across multiple computers. hough

China banned initial coin oferings

last year out of fear of illegal fundrais-

ing activities, it still “greatly supports”

blockchain-related research, said Hugo

Shong, a former journalist who founded

IDG China in 199 3 and is Breyer’s long-

time partner in the country. his trans-

lates into opportunities for coinvest-

ments like the U.S. blockchain startup

Circle, which counts both Breyer Capi-

tal and IDG among its backers in a $60

million fundraising round in 2016.

Blockchain is having an impact on

health care in the U.S. by enabling bet-

ter medical data collection and record-

sharing. For example, startups like Med-

Rec (which doesn’t have Breyer as an

investor) is tapping blockchain

technology to create a common

health care database that every

doctor and patient can access

no matter which service provid-

er they use. Paige.AI, which land-

ed $25 million in funding led

by Breyer Capital in February, is

combining blockchain and artii-

cial intelligence to develop com-

puter models for early cancer di-

agnosis. his would be a major

asset in China as patient infor-

mation there remains far more

fragmented among its one mil-

lion health care facilities. Data

and diagnostic information isn’t

always shared eciently and is

oten handwritten, making it

more dicult to track.

“A lot of underlying block-

chain technologies in China have

uses in very speciic areas,” Brey-

er said. “Most of the early signif-

icant winners in blockchain will be in

the areas of intech. At the same time, I

see opportunities in health care services

and payments in large.”

What’s more, China’s growing tal-

ent pool is a big attraction. Its universi-

ties are producing top-notch talents in

areas like blockchain and artiicial in-

telligence. “Many of the best technolo-

gy entrepreneurs and leaders I met are

from China, and are only increasing in

terms of quality and the depth of inno-

vation,” Breyer said.

Still, investing in the country is not

without its challenges. Beijing has been

tightening capital controls over the

past year, imposing more caps on the

amount of money allowed outside the

country as it seeks to stem cash out-

lows. Breyer, however, doesn’t worry

much about this for now, as the current

focus is helping the Chinese companies

he backed grow locally. But the ultimate

goal is nurturing irms that can com-

pete internationally, Shong says.

And Breyer knows where to look for

advice on Beijing’s policy whims. In ad-

dition to IDG, Breyer has built a rela-

tionship with Ch i n a’s Ts i n g h u a Un i v e r -

sity, where he sits on the advisory board

of the School of Economics & Man-

agement. Other members include Chi-

na’s central bank governor Zhou Xiao-

chuan and Alibaba founder Jack Ma,

as well as Apple CEO Tim Cook and

Facebook’s Mark Zuckerberg. Last year,

board members met Chinese president

Xi Jinping to listen to his view on re-

form, shortly ater Xi was given a sec-

ond ive-year term during an important

party congress in October. “I spend lots

of time with Tsinghua leaders to un-

derstand their view of important initia-

tives,” Breyer says. “Many Chinese and

U.S. long-term relationships tend to

fracture, so I am very lucky.”

BY YUE WANG

“Many of the best technology entrepreneurs and

leaders I met are from China,” says Breyer.

F