For almost three decades, Tang Yiu quietly built a multibillion-dollar business in Hong Kong selling women’s shoes across the Greater China region. The low-profile billionaire—ranked No. 37 on Forbes’ latest Hong Kong Rich List, just below the likes of Duty Free Shoppers cofounder Robert Miller and former Esprit chairman Michael Ying—is among Hong Kong’s most successful entrepreneurs.
Now, the 87-year-old’s little-known investment firm is backing some of the city’s most promising startups and helping to nurture the next generation of Hong Kong entrepreneurs.
Before his second act as an investor, Tang was the founder and chairman of Belle International, the largest retailer of women’s footwear in China by revenue. Established in Hong Kong in 1991, Belle’s shoes grew in popularity on the back of demand from China’s surging middle class. Belle operated more than 20,000 stores in mainland China, selling brands like Joy & Peace, Mirabell and Staccato, and distributing sportswear brands including Adidas and Nike.
Belle listed on the Hong Kong stock exchange in 2007, raising $1.1 billion and giving it a market capitalization of $6.5 billion. It was one of the hottest listings in the city that year, with the likes of Hong Kong property tycoon Lee Shau Kee and luxury giant LVMH Chairman Bernard Arnault buying into the IPO. The float catapulted Tang into the ranks of billionaires. Belle’s CEO, Sheng Baijiao, also became a billionaire in 2013, when the company’s stock price was at its peak.
Tang Yiu (left) and Sheng Baijiao (right) at Belle International’s listing ceremony on May 23, 2007.
Edward Wong/South China Morning Post via Getty Images
But as China’s growth slowed and competition intensified from e-commerce rivals, Belle’s business began to struggle. In 2017, Tang sold Belle to a consortium led by Chinese private equity firms Hillhouse (best known for its investments in Baidu, Didi and Tencent) and CDH (a spinoff from CICC; CDH’s other investments include Li Ning, Midea and SenseTime) in a deal worth $6.8 billion, making it one of the biggest buyouts in Asia at the time. Tang made more than $1 billion from the sale and left the company.
“I don’t care if I need to leave Belle, and I’m not interested in money,” Tang told Zhang Lei, the founder and CEO of Hillhouse, during the deal talks, according to a speech by Zhang. “What I care about is whether the company will be able to work with a good partner, one who can lead its more than 100,000 employees to reclaim its past glory and give the company a new lease of life.”
A Belle International shoe store in Beijing, China.
Bernardo De Niz/Bloomberg News
A few months after the sale of Belle, Tang’s son, Clement, who was an executive director at the company, cofounded a startup accelerator and investor called ParticleX. The startup accelerator is funded by the senior Tang’s investment firm, Shine Works Investment. “Shine Works sets out with a mission to promote entrepreneurship, support innovative business ideas, and most importantly, cultivate a new generation of technology-driven enterprises with global ambitions riding on Hong Kong and Shenzhen’s unique advantages,” ParticleX said on its website.
Since its launch in 2017, ParticleX has invested $8 million in 34 startups so far. The accelerator backs startups around the world—including China, Estonia, Germany, Singapore, Taiwan, the U.K. and the U.S.—but it is most active in Hong Kong. Among the 34 startups in its portfolio, about 20 are based in Hong Kong.
“The second generation of the [Tang] family are very passionate about technology—that it can improve people’s lives and the betterment of human beings.”
ParticleX chief exploration officer Mingles Tsoi
Some of its most promising Hong Kong startups include Ampd Energy, Dayta AI, Farm66, MediConCen and RaSpect Intelligence Inspection. The five were among the 10 Hong Kong startups on this year’s Forbes Asia 100 to Watch, a list of notable small companies and startups on the rise in the Asia-Pacific region.
Ampd Energy, for example, a seven-year-old startup that develops electric generators for construction cranes, expanded into Singapore earlier this year. Its electric generators, which emit less greenhouse gas and make less noise than traditional diesel generators, has been used by Singapore property developer Far East Organization since October. Ampd Energy cofounder and CEO Brandon Ng, an honoree of Forbes’ 30 Under 30 Asia Class of 2017, told Forbes Asia that the company will expand into Australia and Europe next year.
MORE FROM FORBESForbes Asia 100 To WatchBy Forbes Asia Team
And MediConCen, a three-year-old startup that uses blockchain technology to automate medical insurance claims, partnered with ZA, a Hong Kong digital bank backed by Chinese online insurer ZhongAn, to launch a medical membership program in July. This year, MediConCen also won a gold award at the Hong Kong government’s ICT Awards and was named as one of the 20 “Rising Star” companies in Hong Kong by Deloitte.
Despite the Tang family’s links to women’s shoes and retail, ParticleX focuses on technology-based startups. “The second generation of the [Tang] family are very passionate about technology—that it can improve people’s lives and the betterment of human beings,” says Mingles Tsoi, chief exploration officer of ParticleX, in an interview at the startup accelerator’s office in a WeWork space.
Mingles Tsoi, chief exploration officer of ParticleX.
Courtesy of ParticleX
Tsoi, who oversees strategy and operations at ParticleX, also points to the educational background of the founding partners. Clement Tang holds bachelor’s and master’s degrees in physics, and Simon Tang (part of the Tang family) also studied physics. “The two founding family members are physics majors, so they have a scientific mind,” notes Tsoi. The third founding partner, Ringo Lam, has a master’s in information engineering and was the CEO of Epoque, a fashion tech startup affiliated with Belle, before cofounding ParticleX.
A former director of startup and innovation services at KPMG, Tsoi is especially interested in startups deploying data technology to various industries, such as property management.
RaSpect Intelligence Inspection, for example, which is one of the five Hong Kong startups backed by ParticleX on the Forbes Asia 100 to Watch, uses a combination of AI, IoT sensing technology and robotics to inspect buildings for hazards. The four-year-old startup says it is a more accurate, faster and cheaper method than traditional inspections.
ParticleX is currently working with Hong Kong property developer Chinachem Group, government-backed Hong Kong Science & Technology Parks and the Hong Kong University of Science and Technology, among others, to match proptech startups with potential investors and clients.
Hong Kong is home to the most skyscrapers in the world.
Photo by Stefan Irvine/LightRocket via Getty Images
While Hong Kong has been criticized for failing to produce successful tech startups, especially compared to regional rival Singapore, Tsoi is hopeful about the city’s startup space—because of its universities. “We have a lot of professors, and I can see that they are more open-minded now,” says Tsoi, who has worked at the Chinese University of Hong Kong’s Center for Entrepreneurship for more than eight years. “They are not just satisfied with teaching and research work. They also have passion and have very good ideas.”
Tsoi points to SenseTime as an example. One of the world’s most valuable AI startups, SenseTime was founded in 2014 by Tang Xiao’ou and Wang Xiaogang, both engineering professors at the Chinese University of Hong Kong, and two of Tang’s Ph.D. students, Xu Li and Xu Bing. Backed by the likes of Alibaba, SoftBank Group’s Vision Fund and Singapore state investor Temasek, SenseTime is on track to become the first Hong Kong tech unicorn to go public on December 30; the AI startup expects to raise as much as $767 million in its Hong Kong initial public offering.
“SenseTime is a unicorn that grew in Hong Kong. Hong Kong [government] gave us a lot of support and we have got a lot of support from the Chinese University of Hong Kong,” Wang, the SenseTime cofounder, told the South China Morning Post.
“Universities can generate innovation and good people,” says Tsoi. “I think this [SenseTime] is a very good story.”
Source by www.forbes.com