Singapore-based venture capital (VC) firm K2 Global, which is looking to close its second US$200mil fund this year, has something that other venture capital firms do not have. It is able to bridge Asians to Silicon Valley and invest in some of the world’s most formidable billion dollar tech companies.
Its founder is the unassuming coffee loving Ozi Amanat. He’s been creating deep relationships within the startup ecosystem in the US since he graduated from Harvard back in 2003.
Ozi, 39, gained recognition after investing in an allocation of Alibaba shares for wealthy Asian families that ended with returns of 48% on the IPO-day closing price in 2014.
Having been in the tech scene for more than a decade, he’s been able to invest and build a portfolio of tech companies ranging from Magic Leap, Uber, Airbnb, Spotify, Palantir, Alibaba and Paytm. During that time, he’s also earned the trust from high-profile limited partners including prominent family offices, Asian billionaires and even other VC firms and their partners.
Ozi studied psychology and economics at Harvard and simply had a passion for tech.
He had another talent. Creating meaningful relationships with really important people – just over coffee too.
When asked what his formula is, Ozi says simply “it is authenticity and being a decent person”.
“By definition we aren’t humanitarians, we are capitalists! But with that said, there is an opportunity to do well and do good for others at the same time in the venture world. If a founder can’t pass a basic principle of being a decent person, then I think they will face a bumpy road ahead whether its in partnerships or losing investors,” he says.
Ozi operates on the basis of what he can do for others, rather than what they can do for him.
“I never set out to meet all these tycoons or billionaires. I just happened to be fortunate enough to have coffee with a guy who knew a guy who had coffee with the founder of Twitter. When you gravitate with smart and extraordinary people, you eventually get smart and extraordinary outcomes,” he says.
Because of Ozi’s meeting with someone who knew Twitter’s co-founder Evan Williams, he managed to invest US$25mil into Twitter. When the company went public, those shares were worth more than US$100mil.
Ozi first hit on the idea of starting his own fund, when before Alibaba’s IPO he got an allocation of the company’s shares valued at US$35mil.
Investors who got Ozi’s pre-IPO shares at below US$60 apiece, are sitting on returns of 230% as of yesterday’s close. Alibaba raised a record US$25bil and was the world’s largest IPO.
K2 was born in 2015 and today has partners across the globe. It launched its US$183mil Fund 1 in 2015, which includes stakes in Spotify, Uber, Airbnb, Palantir, Magic Leap and Paytm among a portfolio of 37 tech startups.
Ozi, a Singapore resident, expects Spotify’s listing next month, which will be at a valuation of up to US$25bil, to provide a strong exit for the first fund. Ozi is a personal investor in Spotify and his VC firm K2 has been an investor since 2015.
Although Ozi won’t name his high profile limited partners it’s known that he is backed by prominent Japanese families, a Hong Kong-based billionaire, an Australian magnate, an Indonesian scion and a Forbes listed Singaporean.
Recently, adding to the list of prominent investors that backs Ozi is the Singapore government’s investment arm, Spring Seeds Capital which is allocating up to S$100mil.
Israeli and Singapore tech incubator Trendlines Medical Group has partnered with Ozi’s for the government’s investment allocation to find, invest and accelerate growth in the startup ecosystem.
Another of K2’s backers and partners is Singapore-based Ericsenz Capital.
The following is a Q&A with Ozi:
Why did you choose to be based in Singapore?
One of the Forbes billionaires in Singapore who was an investor said it was a great opportunity and probably the future of tech investing. Then the CEO of Forbes took me to lunch and told me the same thing. Something magical in happening in Asia. So it was either destiny or dumb luck. Either way I am grateful.
It’s important to think locally but also have global connectivity so you can see the world with a different lens. Different is good. Just be who you are. I envision building a bridge between Singapore and the Silicon Valley and then extending it to India, Indonesia, Malaysia and China.
It all started to come together in 2012. I have come a long way, but have just scratched the surface of possibilities.
There was alot of ground work to cover to get Asia to understand that there is great opportunities in the US and in understanding the ways of Silicon Valley.
It’s about access and providing a technological and cultural bridge for both sides. Now the future is to look internally into Asia and see where the opportunities are here, for example in Grab and Go-Jek and Paytm and deep artificial intelligence, med tech and food tech companies in Singapore and Asia.
Ericsenz Capital is one of your partners in Singapore. What’s your relationship with them?
They are a platform that is connecting us to a different pool capital, different relationships. It’s about connectivity and relationships.
What is K2’s track record for the companies that it is now invested in? What is the return on invested capital?
K2’s utilises an investment strategy of blending early stage and growth stage companies for optimal results. Since its inception in 2015 the returns have tracked at 26%.
How many investments do you have in Fund 1?
Roughly 37 companies. We are still investing.
You were a One Man Band before K2?
Yes, and it was all driven by relationships. When I incorporated K2 in 2015, it gave it a clearer trajectory, market presence and the potential to become a blue chip VC firm. Today I would say that K2 is like the private equity firm TPG and the venture capital firm Sequoia blended into one. We have a hybrid model that’s very unique.
We leverage off partnerships and are well liked, which is important and take years and years to build that level of trust, credibly and performance.
Its not that we are smarter or swifter. Everything is the sum of its parts. If you have really good relationships, and do well for others, then over time that adds up and you can scale and build something bigger and beyond yourself. Thats true venture building.
How did you manage to break into the inner circle of the Silicon Valley?
I think the Silicon Valley broke into me. I was always interested in technology. I went to school at Harvard where Facebook was starting to be created and tech was in the air. I graduated from Harvard in 2003.
I didn’t know any Silicon Valley people at Harvard. We were dealing with a pre-Facebook kind of era. The Facebook phenomenon was just building up momentum. By 2005, things started to get really interesting.
There were some other companies around the Facebook trajectory, and one of them was Twitter.
That was one of the transformative events in my life, as I was lucky enough to have coffee with someone who knew someone who had a friend who happened to be the founder of Twitter.
I think if you invest in good relationships, you will get good outcomes. You can be with the fast crowd, or the slow crowd, or the sophisticated crowd, the tycoon crown or or the tech crowd.
However one thing remains constant. When you stay around good smart people, it leads you to good smart opportunities. That is a path I try to stay constant on. Thats how it happened for me. So yes it started with relationships. It wasn’t driven by one particular company.
What makes these big Silicon Valley guys or the wealthy Asian families believe in you?
I have said it before, its authenticity. It can’t be made or manufactured, begged or borrowed. You either are or you are not. I think people see that. For some people it takes a bit longer to see it.
For others they recognise it right away. One way or the other, its always comes to pass. For some investors it’s taken several years, like the investment arm of the Singapore government, while for some others like a Japanese family they believed in me in two to three minutes. I am forever grateful to anyone that believes in me, no matter how long it takes. I am incredibly loyal.
Whenever I can do anything to help them, I do. Life is reciprocal. Its not a one way road. Some have more money than others but others have more thought and insight that can be valuable. All parties always bring something to the table. You just have to have the humility to look for it. And remember always look past the dollars and sense, life is about relationships, loving, learning, losing and self evolving into a better person.
This one family in Singapore. I had met them for all of those three minutes and then suddenly they pronounce here you go US$5mil. It is remarkable that they took that leap of faith from someone they didn’t know from a brick in the wall.
Do you know what that means to someone like me? It means alot. Each of these are such an important moments for me. Every single investor I take, I take it as a personal endorsement and I want to do my best for them. So to cut a long story short, we hope to create goodwill and positive impact on many people.
When did you make your break?
From a personal level, I am just scratching the surface. I think I am a work in progress. Its very important to reset yourself daily, weekly, monthly. There have been far too many friends and foes and people I have seen who have lost their track in life because they quantified themselves in Dollars and cents and let their ego’s overcome.
I feel that net worth should not be calculated by dollars and cents but rather by relationships.
So if you ask me what my personal net worth is, I would say it is priceless because it is based on good relationships. Thats worth more than money, thats something special.
Whether in the Silicon Valley or an Asian tycoon family, all people can go down bumpy road if they measure themselves in terms in dollars and cents. There is a fragmentation in the Silicon Valley among the large tech investors. Just like there is a fragmentation among the tycoons in Asia.
Egos can create fractions and opportunity gaps. Because it means that you don’t get to invest with each other. If you can leverage partnerships to invest than you can’t get to positively impact the lives of many people by creating from jobs and employment.
That’s why I emphasise the point: surround yourself with not just smart people but smart people that are good and have humility.
As an investor I stay as neutral as possible, so I can invest in Uber and Grab and Go-Jek. We are not betting on just one major tycoon or technologist. We are betting on the sector and ecosystem.
You like founders who are very grounded. What if the founder was very talented but not too grounded, and slightly arrogant? Would you still invest in him?
Nine times out of 10 I have said no. If the guy ends up becoming an arrogant guy, or I don’t think he fits that basic requirement of being a decent human being, then I would not invest. Not that we are trying to be humanitarians or create a social impact fund, we are capitalists after all!
However, in today’s global ecosystem, if you have a egotistic or arrogant founder, one way or another, he is going to face a bumpy road down the line, either in partnerships or losing investors.
It is natural selection. It is the survival of the fittest. It is Darwinian evolution. An excel spreadsheet are subpar to your intuition. Because your intuition is Darwinian.
It’s taught us you how to live and survive over millions of years. How can the frontal cortex that just evolved over the past hundreds of years compete with intuition that evolved over millions of years?
Go with your gut. When an investor backed me in three minutes, they trusted their darwinian intuition. We all have built up certain skills in the early days of humanity fighting for survival. Some people still fight in those rudimentary ways. If they get attacked, they attack back. If they get bit they bite back.
I don’t see that as a place in the modern world where we have evolved over the millennium. I think it’s more about you go your way, and I go my way.
Be bold, be brave, be brash, but by all means be benevolent.
How big do you think K2 can become?
The vision for the first fund was US$10mil, and I have obviously gone 180 times over that.
So this is much bigger than I initially anticipated. I never looked at this as building a large asset base but rather an opportunity to forge new relationships and pathways in the tech ecosystem.
I think there is great room for growth in this space, and I don’t see why K2 can’t be a billion dollar blue chip VC firm.
Which part of tech do you think is currently being ignored that has more upside potential?
Deep tech, artificial intelligence, big data analytics, high intelligence robotics, medical tech, health and food technology.
Deep tech... I would be looking into smart algorithms in applications and artificial intelligence programs.
I am keen on very forward looking technology, not just making an app to book a car or food delivery.
Very sophisticated stuff. Think sci-fi. Food tech and health tech is going to be a passion project and also an area of focus.