Yu Yongfu, chairman of the fund, explained the goals of the platform recently in Hong Kong.
“I have been through an introspective phase these last few years and I have accumulated knowledge and experience”, said Yu Yongfu, aged 41. After leaving his position as chairman of Alibaba’s Ali Dawenyu Group, Yu Yongfu talked to the media during a press conference at the Intercontinental Hotel in Hong Kong. Although lately he has kept a low profile, he seemed enthusiastic about the future. “We want to be global and be open to new ideas”, he declared.
After working at Alibaba for four years, Yu Yongfu claimed that he sees things differently now. “It is completely different to work for such a big group as Alibaba. When you work for a small start-up, you must learn to be efficient and cut costs. Whereas at companies like Alibaba you have to learn to spend money in a valuable way”, declared Yu. “Start-ups must focus on breakthroughs but in Alibaba the goal is not always that clear”, he added.
Yu Yongfu quoted Jack Ma who has said, “We believe the future, then we see the future”. This left a big impression on him. According to him, that was the time he realized Jack Ma was different from other tech gurus. Ma really believes and applies this thinking. “In Alibaba, we do not try to see the future from our current position, we try to see the present from the future instead”, he explained.
Yu Yongfu is now the chief of the eWTP Ecosystem, backed by Alibaba. This is a new challenge for him because it means stepping out of Alibaba’s known atmosphere and entering a new territory. From a professional point of view, Yu Yongfu said that he does not want to become a simple investor, he wants to become the “entrepreneur behind the entrepreneur”.
Since Alibaba launched this platform last year, it has not yet explained clearly its goals and position. Yu Yongfu gave some hints during the conference in Hong Kong. First, he described the moment we are in right now. In the last ten years, Chinese companies have been able to understand the transformations in the Chinese market. But in the next ten years, the industry will face two challenges. The first will be to resolve the so called “intelligence of things”. The second challenge is globalization. Chinese companies will have to explain how technology will bring along a new globalization that solves new problems.
This new globalization will be different to the one we know. Only 20% of countries and companies benefited from the first globalization. In the future, companies will have to rethink how to turn globalization into something helpful for small and medium enterprises too. Jack Ma already set this as one of the platform’s goals from the very beginning. He visualised a globalization in which small companies and young entrepreneurs could also succeed.
The first investment fund of this platform is eWTP Technology & Innovation Fund, which has a capital of USD 600 million. According to Yu Yongfu, the fund is backed by Alibaba and Ant Financial, which also belongs to Alibaba. However, they hope to attract external investors too. The fund has a team of 10 people and apart from Yu Yongfu, neither of them hold a concurrent post at Alibaba.
Although the platform is backed by Alibaba, Yu Yongfu hopes that eWTP Technology & Innovation Fund can develop its own identity and goals. He needs Alibaba to let the platform become an innovative one. Then, he requires Alibaba to be patient and allow the platform to grow. And lastly, he hopes Alibaba can withstand the fund becoming its competitor in some fields, eventually.
eWTP Technology & Innovation Fund wants to keep away from projects in China and the US. Yu Yongfu prefers to focus on the area covered by the Belt and Road Initiative. “I have managed a lot of teams and undertaken a lot of projects and I believe that being able to grasp the competitor’s strategy, being able to change our point of view and understand the problems that come up during cooperation must be our distinctive traits”. He said that the platform will also help Alibaba to better localize in different countries and will increase its global presence.
In order to choose which Chinese companies to invest in, eWTP Technology & Innovation Fund has laid out some requirements. First, companies are expected to not just copy models from Chinese companies, they must have a global strategy and thinking. Second, the company’s team must be experienced and third, the team must be mature. For non-Chinese companies, the platform is searching for innovative companies that have an understanding of both China and the US. eWTP Technology & Innovation Fund will also carefully examine the company’s financial resources.
Yu Yongfu declared, “my career has gone through three stages. In the first one, I was both an investor and an entrepreneur. In the second, I was an entrepreneur, never having a direct boss. Even at Alibaba I always had the freedom to develop my strategy. And in my third stage, I do not want to be just an investor, I want to support entrepreneurs”.
Since he started studying globalization in 2015, he has always focused on markets outside China and the US. “Different governments and different regulations are a big challenge for the future. We will face many difficulties along the road but by supporting so many start-up companies, we will learn a lot of things”, he said.