13 minute read
ANU College of Business and Economics (CBE) alumnus Victor Jiang is the Founder of Sapien Ventures, a venture capitalist firm dedicated to the fintech, blockchain and online marketplace sectors in the Australian, US and China markets. He is also the President of Keiretsu Forum Australasia, a community that connects like-minded accredited private equity and corporate investors.
In this interview, Victor discusses whether dream jobs exist, why Australia has an advantage in the fintech space and the future of venture capitalism.
Q. What were the driving forces that led you to establish your own company in your 20s?
I have been fortunate enough to have had greater mentors in each phase of my working life. From early on, I was inspired by those I had been looking up to and the philosophies they instilled in me, including that “the dream job does not exist; you have to create it yourself”.
Since my teenage years, I wanted to travel and explore the world without the restrictions or burdens of being stuck in a typical nine-to-five job. Creating my own businesses in parts of the world that I wanted to live in was the only practical way to achieve this goal for me.
Q. What is a week in the life of a venture capitalist like?
In a typical week, there are many tasks a venture capitalist will undertake and complete. This may include frequent board meetings with portfolio companies or check-ins with the founders of these companies, primarily to discuss updates, progress and any issues. We use these platforms to brainstorm matters regarding strategy, product, marketing, finance or technology. Venture capitalists regularly consult with the team on new and emerging companies to consider and have ongoing conversations with existing and potential new investors about funding. Conversing with channel partners of our fund and portfolio companies as well as managing administrative and compliance issues as required are also a frequent occurrence. In addition to these responsibilities, we occasionally attend and host conferences, and pitch competitions, workshops and seminars with partners or affiliate organisations, such as other financial institutions.
The dream job does not exist; you have to create it yourself.
Q. How can the fintech sector contribute to the prosperity of the Australian economy?
I believe fintech companies have the unique potential to transform the way people interact with financial services and financial transactions. They can carry out important activities that significantly affect people’s livelihoods, in a manner has never been possible before.
We have already witnessed how apps like Uber and Airtasker have allowed people to get paid for providing services ranging from transportation to food deliveries to a wide range of assorted jobs. Customers don’t need to use a credit card or interact directly with a financial institution to receive services.
Globally, Apple Pay and Alipay are transforming the way we buy and sell goods and services. Soon, you will be able to simply scan your face in order to authorise payments, which is already happening in countries such as China and Israel.
By then we will not need any other form of external gadgets to provide payment or other financial authorisations. The counter-party will be able to glean much more about our preferences and habits than a traditional credit card or cash ever could, from our payment profile or social media account. Traditional brick-and-mortar banks or financial institutions in this scenario will fall into the background as simply utility providers, or even just infrastructure providers.
This, of course, has benefits and risks. Highly valuable data will become even more centrally stored, providing ever-greater incentives for hackers, unless they are stored via decentralised platforms such as blockchain.
Regarding blockchain, this technology trend has the potential to transform financial services, as most of its existing processes were created before it was technically possible to prove the immutability and authenticity of a trail of transactions. No longer will counter-party settlement, clearance, reconciliation or much regulatory reporting be needed in a fully blockchain-enabled society. An estimated 70-80 per cent of the entire cost base of a traditional bank or financial institution could simply disappear. Transactions that used to take days or weeks, such as property settlements, water trades or patent transfers could now take seconds with blockchain.
This evolution has massive ramifications for consumers, governments, regulators and the financial-services industry itself. I think you will see more and more technology companies becoming financial institutions, by virtue of the features of their digital products. Afterpay, for example, have just recently won a strategic investment from the likes of Tencent of China, while gaining market-share in the United States (US).
Australia has a relatively advanced position in terms of certain fintech and blockchain businesses and business models. Another great example is the Australian Securities Exchange (ASX), as it is the first exchange in the world to adopt blockchain as a core backbone system. The regulatory environment has been relatively friendly toward Initial Coin Offerings and Security Token Offerings, compared to the likes of the Securities and Exchange Commission in the US or Financial Services Authority in the United Kingdom. This means more companies are likely attracted to Australia to raise capital in this new manner, than in the larger but more conservative locations. We have the opportunity to become the new Switzerland or Singapore for the crypto-financial world.
As the great Warren Buffet famously said, "Be greedy when others are fearful; be fearful when others are greedy".
Q. As an entrepreneur and venture capitalist, are you optimistic about economic investments post COVID-19?
As the great Warren Buffet famously said, “Be greedy when others are fearful; be fearful when others are greedy”. This moment represents just about the best time for astute investors to find the best bargain deals that are immensely undervalued under normal circumstances. The recent ASX wobbles are a great example of this theory.
Globally, I believe there are many areas representing great investment opportunities, both now and beyond COVID-19. As people’s attitudes and behaviours change during and after the pandemic, so will the way they interact with essential services. Most sectors within technology, financial services, remote delivery, such as online education, tele-medicine, drone deliveries, will all have massive upsides now – and even more so once we are on the other side of the pandemic.
As venture investors, we are focused on the longer-term market trends, ones that are measured in years, rather than months. Furthermore, if we invest in the areas that are more resilient to or even helpful in terms of alleviating the effects of the pandemic, I believe they will not only become great investments, but also solutions for solving real social challenges.
Q. What roles do you think Sapien Ventures and Keiretsu Forum will play in facilitating global entrepreneurship in the next five years?
The founding vision for Sapien Ventures was to “bring Silicon Valley knowhow to Australasian and regional entrepreneurs, to help them solve some of the greatest social challenges of our times”.
The founding vision of the Australasian Chapter of Keiretsu Forum was to “connect Australasian investors and entrepreneurs with the world’s largest network of private investors”. I think you can see clear synergies between these objectives and how they support one another.
Sapien Ventures is focused primarily on fintech, online marketplaces, blockchain and enterprise software, whereas Keiretsu Australasia has no sector focus but rather a geographical focus on cross-border businesses or those that are seeking to expand.
Sapien Ventures has organised regular international investor roadshows of our portfolio companies in the world’s largest markets, including a five-city roadshow across China in 2017 and a four-city roadshow across the US in 2018. Last year, we showcased multiple companies in investor conferences from Hong Kong to Tokyo.
Meanwhile, Keiretsu Australasia has facilitated monthly national investor forums, with many companies presenting to local and sometimes international investors, physically and now virtually. These forums are a great way for both our portfolio companies to gain exposure to international investors and experts, as well as to bring global entrepreneurial talents in front of local investors or advisors.
To-date, these forums have already assisted the merger of Sydney-based PrimaryMarkets.com with Silicon Valley-based Linqto.com, as well as a number of Australian technology companies getting funding from a diverse range of investors. We look forward to growing and scaling these activities, hopefully with more alumni from The Australian National University in the future.
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Image: Kristy Rowe