[GAIC 2025] (세션6_Speech by Jerry Yang) 비상장 기업 - 예비유니콘을 발굴하라

Our own Jerry Yang. Thank you, Chris. Good afternoon, my name is Jerry Yen. I just flew in this morning from Paris, where I'm based. I touched down at 7:30 in the morning. At this age—I turned 49 this year—I don't pretend I can manage jet lag anymore, so if I fall asleep throughout this presentation, Chris, just knock me on the head and wake me up. I'm a partner, general partner at HCVC. We're a Paris-based early-stage deep tech venture capital firm with offices in London and San Francisco. Our mission is very simple, as you see on the screen: we back frontier science and scientists to build foundational industries. I'm going to spend two to three minutes introducing our firm a little bit—it's always about a shameless self-plug. This is the partnership. You'll see me. My background was in semiconductors. I came from Taiwan, spent 12 years designing chips. The last time I was in Korea was 18 years ago when I was a founder developing display chipsets. I came to Suwon and went to Gumi trying to persuade Samsung and LG to buy my chips. That was a long time ago, before smartphones, before mobile internet. I was moving around in trends, and it was the good old days. Then I moved to Silicon Valley and worked for wireless chipset companies, got acquired by Qualcomm, left Qualcomm in 2012, moved to Paris, met my partner Alexis—the second gentleman from the left—and joined him officially. We've been working together for 10 years. We got Emory Kerna, a fellow French-American who grew up in the United States, on the right. She joined us with 20 years of corporate venture experience before joining us in 2017. The lady who joined us is Alexander Flamong, the young Mexican-French-Canadian-English—I don't even know what his nationality is anymore. He's based in London for us. Pretty good investment for us. I'm not going to go through the other team members, but specifically the second on the right, you might recognize his face: Peter Buu, used to be the Renault F1 team principal. He's now our biggest connection with Korea, as he's the FIA motorsport team president for Hyundai. Obviously, I won't go through the entire LP base, but some are here. Our LP base is quite unique as a European fund. We have a global LP base from Europe, the United States, Japan, Taiwan, and Singapore. We don't have any Korean LP yet, but we do have one Korean-born Korean entrepreneur that was an LP. You probably will see Tao Song over there. I believe the Korean name is Sant Jang Sanjang, which is a younger brother of Masachi Song. He was actually our first LP backing us with Misoto from Japan. We also have all kinds of LPs from family offices, funds, foundations, sovereign funds, high-net-worth individuals. It's quite a broad LP base across the whole world. A few—I'll just put two or three of our companies on the map. The first one I want to talk about is probably our biggest exit so far. We invest in both Europe and the United States in early-stage deep tech. This one is specifically a New York one. We backed the company together with Loss Capital and with First Run Capital, and then they got backing from Loss Capital. Masel was trying to come in to lead a CVC, but eventually it got acquired by Install Card. The exit was a $350 million exit back then. The second company is called Augmenta, a European company based in Greece. You'd be surprised that you can actually achieve a good exit as a Greek company instead of just doing cheese. They're working on IoT kind of sensors for agriculture farmers. I believe they're still the largest exit in that sector: $110 million in cash acquired by CNH Industrial, basically the competitor to John Deere. And we convey—is an investment we did about a year and a half ago. It's a Korean founder, but he actually—so this is I'm going to come back to this point at the end of my speech about deep tech potential in Korea. This is a good example to connect to that. So is actually based in Turkish. He got his PhD at ETH, which is one of the top engineering schools in Europe, and co-founded this company called Keronero that produced a machine that can mass manufacture carbon nanotubes. Through our intros, they're now working with TSMC on the potential next 10 to 20 years of generation of transistors based on carbon nanotubes. We convey in this company with Fun.

My topic today is going to have a little bit of overlap with the frame from Amadis Capital, because we're talking about Europe, but specifically also talking about deep tech. I think a lot of people have questions about how do you define deep tech. I'm not going to invent it; I'm going to leverage heavily a report created by one of our friends by Lexar and based on Dealroom data in Europe. They created this report earlier this year. I think they have much better data than I do, so I'm going to leverage quite a bit of that. The report defines deep tech as novel scientific or engineering breakthroughs that are going to make their way into products and companies for the first time. But that still doesn't really tell us what deep tech is. Is internet deep tech? Is AI deep tech? A better way to see it is that everything is deep tech when it first came out until it became mainstream, became a commodity, and became a fundamental part that everybody takes for granted. As you can see here, in the early 20th century, you can say that internal combustion engine—Ford, General Motors—those were the early entrepreneurs building breakthrough technologies, and also chemistry and electricity. Then you move into petroleum, then digital network, internet, software, biotech in the late 90s and early 2000s. Now we have a new mega wave headlined by AI, but there's also all kinds of computational biology, as the gentleman here mentioned, and robotics, new generation robotics. Bottom line is that after the fact, you'll see that that was deep tech when the wave first came out. But the investor's job is to find those early signs and bet on the best companies. My own way of framing it—this is my own way—especially the last cycle that we just went through that ended in 2022 when the Federal Reserve started to raise interest rates. Between 2008 to 2022, post-financial crisis, there was a good decade of financial returns from SaaS companies, crypto companies, and fintech. During that time, you heard a lot of buzzwords like network effect, ARR, connected digitization, automation, decentralization, tokenization—I don't know how many people use that term anymore—zero marginal cost. Those are the buzzwords that as an investor you see a thousand times per year in all the decks. From 2022, when the bubble of SaaS and fintech burst and crypto in some sense, now the past couple of years the buzzwords have been large language model, AGI, agents, whatever items you slash on, sovereignty—which is actually a big topic in Europe as well—and dual-use defense tech, resilience, all kinds of resilience, cybersecurity, computational technology including biotech, longevity, and zero carbon. That gives you a feeling as an investor of what kind of keywords people are talking about and what keywords are already outdated.

This is taken from the report that Lexar and Dealroom created. One of the perceptions about deep tech is that it takes a lot of money to develop, and therefore you have lower returns. Take these numbers with a grain of salt; it was created to promote deep tech, so obviously it's going to show the bright side. But at least on the basic scale, it wouldn't be worse than SaaS or fintech investment in general. That's what the report was trying to argue for. Here you can see that throughout different stages, the capital efficiency of deep tech investment is not worse than general investment, sometimes even better. Again, take it with a grain of salt—we always create reports that benefit ourselves—but just to give you a picture, it's not a night-and-day difference. It shouldn't be a reason why you should or shouldn't invest in deep tech. Return potential as well—IRR is probably one of the most unreliable numbers, but you can see that in some cases, deep tech investment's unrealized IRR is actually better than generic SaaS investment from the previous quarter. Again, there's always time scale mismatch, different period, different time, different fund size, different geography. The report, by the way, is free to download. Go on the internet and Google for the European Deep Tech Report by Lexar and Dealroom, you'll find it.

I'm based in Paris. I've been living in Paris for 13 years. I'm also naturalized as a French citizen with my semiconductor background. Why are you doing investment in Europe, especially as an Asian guy? You know, you should be opening a restaurant in Europe. Europe has always had a very wide range of research institutes, as some of the gentlemen here already talked about. That's something that outside of Europe was not that well known. I think most people outside of Europe probably know the schools in the UK like Oxford or Cambridge, but outside of that, when I mention ETH, most of you probably never heard about it. But it's actually the top engineering school—it's basically the Caltech or MIT of Europe. Only the smartest guys can get into it, and it's generated a lot of entrepreneurs over the past decade. I've been living there for 13 years, doing investment for more than 10 years now. The biggest change that I've observed firsthand is that more and more people by default become entrepreneurs. They used to graduate and try to go to the United States or join big companies, but more and more stay and start their own companies or join startups locally. That's something that happened very dramatically, very quickly. Some of the schools our friends here listed in the previous report—I'm not going to go through all of them, but I mentioned a few schools here. There are still challenges: growth capital and exit. I hope our friend at Hazilio here can answer the question. Growth capital today we still rely very heavily on growth fund investors from Europe, but that's changing now. We've seen some growth-stage deep tech investment coming from European investors. Exits—really large exits are still something that people have been looking for, but hopefully it will come in the coming years.

I was asked to actually talk a little bit about—can I go back? Yeah. I talk because my background is semiconductor. I thought it would be relevant especially in the country of Samsung, SK Hynix, as well as LG. For a lot of people, semiconductor is kind of a vague idea. You don't have Intel, you don't have TSMC—what do you have? Actually, there are a lot of semiconductor activities in Europe. Just last week, there was a big event run by IMEC, which is a research institute specific for semiconductor based in Belgium. They run this annual event, which is a very good event if you're interested in semiconductor. You should definitely join the event—it's usually in May every year. Then there's the research institute in France, CNRS, the two schools in Switzerland, ETH and EPFL, German research institutes Fraunhofer, Max Planck, CSM, and TUM. Those are good. Two very good universities in the UK: University of Cambridge and Oxford, obviously Bristol is a very good one. Those are where we find the best semiconductor talent that come out to create companies. But specifically, what are they doing today? Obviously, they're not creating—I used to be a founder building chips and selling them. It's a very stupid business, very difficult to generate revenue, very low valuation when you do the exit. Selling the company is not a very good model. But the new generation that got us excited, they're working on so many different things. From the chip design side, you have all the large language model-assisted EDA, from simulation, verification, to APR, all kinds of ways where it used to require experienced semiconductor engineers to run the software. Now you have startups creating tools that can help the engineers do that. Alternative computing—different kinds of chips doing analog, optical, and quantum computing—those are also the kinds of things that are very interesting. If you move to the manufacturing side, now you're seeing startups actually building new lithography technology, which is kind of crazy. It's not just optical lithography but also non-optical lithography for the next 20 to 30 years. There's also new ways of processing, like single-layer atomic layer deposition, which can be found in Europe surrounding IMEC. New chips require new metrology to measure them, to test them, so new ways of UV, DUV-based metrology and quantum-based metrology technology coming from Germany that we actually talked to. Then you move to the assembly side. One of the key things today limiting AI is actually the access to high-bandwidth memory, which is actually limited by the assembly capacity. But we found very good technologies that are working on new ways of assembly, high throughput. Obviously, there's lots of work on interposers. That's just one of the slides.

How does that map to Korea? When I was in Silicon Valley—this is my last slide—my two best friends in the company are both Korean. One of them went to Seoul National University, the other one went to Yonsei. Both of them finished their military training, came to the United States, got their PhDs at Stanford, and stayed in the US. One day we're having Korean barbecue—by the way, they schooled me on how to do barbecue. Apparently, I've been doing barbecue the wrong way my whole life as an adult. So they told me that. I asked them, 'So did you guys ever think about going back to Korea to start companies and all that?' And they were like, 'No, no.' Before I even finished my question, he said, 'No, no, no, no. If I go back to Korea, I will work with large companies. I cannot create startups in Korea.' That was 15 years ago. So I think when I see how Europe transformed itself from all those research institutes, all those PhD scientists that were able to create companies and transform the deep tech scene in Europe, I think there's a lot of potential in Korea. I want to sell that idea to you. You also have some of the best world-class research institutes like KAIST, Seoul National University, and Yonsei. You also have all those talents that used to be locked inside Hyundai, LG. If you can create a new ecosystem environment for those people to unleash their potential and take risk, I think there's a lot of potential in this ecosystem. I'm a little bit over time, but I think that's fine.