Beijing and Tokyo emerge as serious tech hub rivals to Silicon Valley

12 April 2019 Consultancy.asia

As Silicon Valley struggles with a number of institutional issues, the location of the world’s top tech-hub may ultimately change – with Beijing and Tokyo emerging as serious contenders according to a survey conducted by KPMG.

Now into its seventh edition, KPMG’s Technology Industry Innovation Survey quizzed over 700 global tech executives on their thoughts on the future industry landscape – revealing that for the first time more than half of the respondents (58 percent) believe Silicon Valley will no longer be the technology innovation center of the world in just four years from now, with Beijing and Tokyo seen as two possible usurpers.

“Many factors affect a city’s perception as an innovation hub, including favorable government policies and incentives, accelerators, tech parks, corporate investment, state-of-the-art infrastructure and, in all cases, at least a few highly successful and wildly popular success stories,” said Peter Laco, an Executive Director at KPMG in Slovakia, of the previous survey.Top contenders for the next world-leading technology innovation hubWhile New York remains the most touted hot-spot among respondents, Beijing and Tokyo landed in the second and third spots as likely contenders for the global tech-hub crown, with seven Asian cities featuring among the top dozen; Shanghai (in equal 5th, but overtaken by Beijing), Taipei (in joint-5th as a notable riser), Singapore and Seoul (at 7th and 8th) and Hong Kong, which rounded out the top dozen. Shenzhen, meanwhile, has dropped outside the top 20.

With access to talent and quality infrastructure remaining key attributes for a successful hub, the report states that, despite all the positive business factors present in Silicon Valley, “an escalating cost of living, questions about diversity and corporate cultures, high business taxes, an overmatched infrastructure, and even increasing scrutiny into data privacy and other business practices are contributing to the perception that Silicon Valley may not continue to dominate.”

Still, the US (which also featured seven cities among the top 20) as a whole is still considered the country expected to produce the most disruptive technologies in the coming years, maintaining its top spot ahead of China despite a narrowing of the gap by two percentage points on last year (to 23 percent against 17 percent). The UK meanwhile has gained some separation on Japan in fourth, while Singapore, South Korea and India appear among the top ten.Countries that show the most promise for disruptive technologyTo gain further insight into the likelihood of a burgeoning tech-hub reaching the peak of the global pecking order, KPMG analysed the results of the survey against a range of other city indices, including A.T. Kearney’s 2018 Global Cities report and Mercer’s Quality of Living rankings – identifying Singapore as the most consistent Asia Pacific performer across the board, with Tokyo, Seoul, and Hong Kong lagging in a variety of areas.

“The belief that Silicon Valley will be displaced as the leading hub underscores the continuing decentralisation of technology innovation, spurred by investment in other cities and regions globally, as well as contributing factors in Silicon Valley,” says Tim Zanni, KPMG’s global technology sector leader. “Even when faced with pressing issues that call for funding, cities and countries are carving out significant investment to become a technology innovation hub due to an expected broad economic impact.”

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Asia-based BCG-backed tech fund B Capital raises a further $400 million

09 April 2019 Consultancy.asia

The BCG-backed B Capital Group has raised over $400 million in the first close of its second fund. Based in Singapore, B Capital has now raised $766 million across two funds.

Established by Facebook co-founder Eduardo Saverin and ex-BCG Senior Advisor Jav Ganguly in 2016 – and backed by Boston Consulting Group from the outset – the Singapore-based venture capital firm B Capital has according to a US Securities and Exchange Commission (SEC) filing secured $406.1 million in commitments at the first close of its second fund – adding to $360 million raised last year for its first fund.

Launched toward the end of March, the second B Capital Fund has so far attracted 62 investors, and although a final close date or target hasn’t been disclosed, an unnamed source told Forbes that the VC firm is looking to double the size of its first fund. Meanwhile, B Capital has already built up a portfolio of 19 start-ups, with a focus on technology in the healthcare, financial services, industrial logistics and consumer enablement segments, and a particular eye to the Southeast Asia and India markets.

“We continue to strive to be a launch pad for entrepreneurs across a wide range of verticals and seek to provide our portfolio companies with the necessary resources and access to some of the most important business leaders,” said Saverin, who moved to Singapore in 2009. “We are committed to helping the next generation of entrepreneurs deliver transformative technology to the world and are strategically positioned to disrupt the realm of venture investing.”Asia-based BCG-backed tech fund B Capital raises a further $400 million Anchored by BCG, and partnering with BCG’s Digital Venture’s incubation arm, B Capital styles itself as a bridge between the innovative tech start-up realm and leading global corporate incumbents – bolstered by BCG’s deep client network (some 1,800 globally according to the consulting firm) and domain expertise in the investment fund’s areas of focus. Further, B Capital and BCG work together to uncover the most promising areas of investment.

“We partnered with the Boston Consulting Group because of their unique insights into the industries that we invest in and their unparalleled access to the world’s leading corporations,” said B Capital’s Ganguly, who in addition to spending the past six years with BCG served as a senior vice president at Bain Capital during the prior six. Earlier, Ganguly spent three years as a senior manager at MBB rival McKinsey & Company.

“It is inspiring to be backed by investors who recognise that our combined extensive experience as entrepreneurs and business creators provides a unique and valuable perspective as to how we support and provide capital to our portfolio companies,” adds Ganguly. “Our first-hand experience building and scaling enduring businesses has allowed us to bridge an important gap connecting entrepreneurs in need of resources to scale their businesses with corporations seeking to innovate and leverage emerging technologies.”

With B Capital said to be aiming to invest $20 million in each portfolio company, including reserves for future growth funding, Southeast Asian and Indian investments to date include Singapore short-term financing match-making platform Capital Match, ASEAN last-mile logistics provider Ninja Van, Carro – a Singapore-based vehicle sales and subscription service, and India’s Mswipe, a mobile point-of-sales solution.

“Whether it is funding availability, stage, talent, institutions, or exits, the presence of such whitespaces in the ecosystem makes it equally challenging and rewarding for investors,” Saverin and Ganguly wrote of the gaps in the Southeast Asian and Indian investment space in a founding post on LinkedIn. “We are very excited and bullish in the long run because we see the opportunity to bridge that gap and make a positive impact in a community of two billion people.”