Min Wanli had a career path that was highly sought after by those pursuing a career in computer science. As a child prodigy, Min was accepted into a top research university in China at the age of 14. Degrees in physics and statistics from the University of Chicago before spending nearly a decade at IBM and Google together.
Like many young, aspiring Chinese scholars who worked in the US, Min returned to China in the early 2010s when the country’s internet boom began. He joined Alibaba’s fledgling cloud arm and has been at the forefront of applying his technology to industrial scenarios such as using visual identification to reduce highway traffic and computing power to improve factory efficiency.
Then in July 2019, Min made a jump. He stepped down from Alibaba Cloud, which had become a major growth driver for the e-commerce Goliath and was (and still is) China’s largest public cloud infrastructure provider at the time. With no investment experience, he started a new venture capital firm called North Summit Capital.
“Many companies were quite skeptical of the ‘digital transformation’ around 2016 and 2017. But until 2019 after seeing successful cases [from Alibaba Cloud], they no longer questioned his viability, “Min said in his office, overlooking a cluster of urban villages and high-rise offices in Shenzhen. Dressed in a well-ironed light blue shirt, he spoke with a childlike, serious smile.
“Suddenly everyone wanted to go digital. But how am I supposed to meet your needs with a team of only 400-500 people? “
Min’s solution was not to serve the old-school factories and corporations yourself, but to fund and support a number of companies. He soon closed the first fund for the North Summit with “several hundred million dollars” from an unknown wealthy person from the United Arab Emirates whom Min met while representing Alibaba at a 2018 technology conference in Duhai.
“Venture capital is like a magnifying glass that I can use to connect with many technology companies and share my past lessons so they can work quickly and effectively with their traditional industry clients,” said Min.
“For example, I would discuss with my portfolio companies whether they should focus on selling hardware or software first or give them the same weight.”
Min endeavors to get deeply involved in the companies he supports. North Summit is investing early, with check sizes now ranging from approximately $ 5 million to $ 25 million. Min also formed a technology services company called Quadtalent to support his portfolio after the investment.
Photo: North Summit Capital office in Shenzhen
The notion of digital transformation is both lively and daunting for many investors because of the highly complex and segmented nature of traditional industries. But Min has a list of criteria to narrow down his goals.
First, an investable area should be data-intensive. Subway tracks, for example, could benefit from the implementation of a large number of sensors that monitor the condition of the rail system. Second, an area’s manufacturing or business process should be capital intensive, such as production lines that use exorbitant equipment. Finally, the industry should be heavily reliant on repetitive human experiences, such as the police directing traffic.
Solving industrial problems not only requires the founders’ computer engineers, but above all their experience in a traditional sector. With this, Min goes beyond the “ivory tower” of the IT wizard when looking for entrepreneurs.
“What we need today is some kind of interdisciplinary talent that can do ‘composite algorithms’. That means understanding sensor signals, business reasons, manufacturing, and computer algorithms. The application of neural networks via an algorithmic black box without the other factors is simply pointless. “
Min faces a lot of competition as investors chase the next ABB, Schneider or Siemens in China. The country is striving for technological independence in all areas of the economy and the national mandate is given new urgency as COVID-19 disrupts global supply chains. The result is skyrocketing ratings for startups promoting “industrial upgrade” solutions, noted Min.
But factory bosses don’t care whether their automation solution providers are indispensable or startup unicorns. “At the end of the day, the factory CFO will just ask, ‘How much more money does this software or device help us save or make?'”
The investor is careful with the use of his maiden fund. After two years of operation, North Summit has closed four deals: TopScore, a 17-year-old shoe maker committed to automation; Lingumi, a London-based English learning app for Chinese preschoolers; Aerodyne, a Malaysian drone service provider; and Extreme Vision, a marketplace that connects small and medium-sized businesses with affordable AI vision solutions.
This year, North Summit plans to invest nearly $ 100 million in companies inside and outside of China. Optical storage and Robotic Process Automation (RPA) are just two areas that have been on Min’s radar for the past few days.