In a growing Asian trend, Samsung wants to acquire Valley companies

In a growing Asian trend, Samsung wants to acquire Valley companies

October 9, 2013

by Anh-Minh Do

samsung-asia-silicon-valley

There is one current paradigm that rules over Asia these days. It’s that Asians are obsessed with Silicon Valley. Asian founders, startup community organizers, and wantrapreneurs get all googly eyed when the likes of Google and Facebook fly all the way out to Asia to network and give talks. It’s the power of the Silicon Valley brand. But there’s a quiet movement brewing that’s unbeknownst to the fanboys. It’s a slow shift in the other direction.Samsung, a South Korean company, is going to start acquiring Silicon Valley startups

That’s right. Samsung is looking to acquire Silicon Valley startups, and not just any startup. On its list are gaming-related companies like Unity Technologies, Green Throttle Games, and the legendary Atari, which created the first game for the computer.

Granted, this is Samsung’s attempt to compensate for its weak software background. And forget for a moment the irony that software giants like Microsoft and Google are acquiring Nokia and Motorola to become more like Apple, while Samsung is attempting to acquire software companies to be like Apple. The main point here is that Samsung, an Asian company, is looking to invest and acquire non-Asian companies. The tide has shifted.

Samsung is not an isolated event, remember Baidu’s Lab?

Baidu, earlier this year, opened up its Institute of Deep Learning in Cupertino. That’s a stone’s throw from Apple’s headquarters. Baidu, which has a market cap of over $50 billion, is eager to access the Valley’s huge pool of talent and work on problems it’s not able to work on back home. Specifically, Baidu wants America’s neuroscience talent.

Don’t forget Tencent worked with Y Combinator

Tencent, China’s largest internet company has also started investing in the Valley. It’s also going about it very intelligently by working directly with Y Combinator, the Valley’s most prominent startup accelerator.

Asian companies are rich and they know where to invest

Asian companies are all too aware of their shortcomings. In terms of going global, American companies have it easy. America created the internet, after all. Folks like Baidu, Tencent, Line, and Samsung have had the growing pains of trying to make it big in the face of American dominance. And they’re slowly winning. Asian companies, in their rush to compete head on with companies across the world have seen the stark difference. They know they cannot replicate the Silicon Valley culture at home, so it’s better to just buy it.

This wave of money and investment doesn’t just come in the form of big companies acquiring Valley startups either. The wealthy of Asia, especially in China, are realizing that offshoring their money into investments like startups is a viable way to keep their wealth from disappearing from dues they have to pay at home. It’s happening on all levels.

As more megaton companies like Samsung come into their own and realize the need to make up for their lack of talent, software, and operations, the money’s going to keep flowing into the Valley. That money, of course, will end up building empires back in Asia.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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