7/31/2019 Formation 8 Raises Its First Fund Of $448M To Plug Silicon Valley Startups Into Asian Conglomerates | TechCrunch

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Formation 8 Raises Its First
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Josh Constine @joshconstine / 6 years ago Comment
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Formation 8 wants to bring venture capital back to its roots: More

investing in solutions to hard technology problems that Search

could change the world. It just raised its first fund of $448
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million — but with a twist. Formation 8 plans to draw on its Google
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extensive network and local offices in Asia to win its Enterprise

portfolio of smart enterprise and energy technology

companies’ huge deals with conglomerates in the region.
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Specifically, Formation 8 is looking for “smart enterprise”

startups that can help enormous companies like those that

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define Asia to make sense of the vast seas of data now

available. Government, finance, healthcare, and business
services can all fall within this net. Formation 8 also seeks
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energy companies that can transform the global energy
value chain. It hopes startups can become platforms to
maximize scalability and take advantage of the nimbleness Startups
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their small size affords.
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Formation 8 co-founder and partner Joe Lonsdale tells me Advertise
his fund isn’t thumbing its nose at consumer markets, Crunchbase
saying “It’s not about what’s right or what’s wrong, but More

about what areas we’re the most passionate about and are Search
the best at.” As for its focus overseas, Lonsdale riffs, “If you
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have a company that’s trying to transform a big industry, Google
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and you’re ignoring Asia, you’re making a mistake.” Enterprise

Along with Lonsdale who worked at PayPal and co-founded

Palantir, Formation 8’s founders include Brian Koo of Harbor
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Pacific Capital and InnovationHub, James Zhang
of Softbank China Venture Capital and BioDiscovery, Tom

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7/31/2019 Formation 8 Raises Its First Fund Of $448M To Plug Silicon Valley Startups Into Asian Conglomerates | TechCrunch

Baruch of CMEA Capital and Intermolecular, and Jim Kim of

GE and Khosla Ventures. Lonsdale will be speaking at
TechCrunch Disrupt NY in a couple of weeks.
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Formation 8 originally closed the first $200 million of the Newsletters
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fund last year, and some strong early investments and
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success had more limited partners lining up to fill up the full
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$448 million. Lonsdale tells me those include “founders of Crunchbase
PayPal, Palantir, Yahoo, and Yammer, plus Asian More
conglomerates and some New York institutions. He’s already
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thinking about the firm’s next fund, which he says will
probably be around the same size. Why raise $448 million Facebook privacy
Google
instead of a nice round number like $450 million? Transportation
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Apparently, it’s a play on the firm’s name. Four hundred forty
8. Get it?
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The firm’s investment philosophy centers around “Large,
growing and global markets with hard problems that can be

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solved through technology and partnership.” It wants

companies with a strong technology culture that offer long-
term equity incentives, make data-driven decisions, dream
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big, stress discipline, and have the humility to accept
advice.
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While it invests in startups, Formation 8 recognizes that Advertise
there are strengths to large corporations, too. Crunchbase
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“Corporations have scale, existing relationships, and
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distribution advantages in large, established industries such
as energy, education, healthcare, logistics, financial Facebook privacy
Google
services, and government services,” Lonsdale writes. “Many Transportation
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Smart Enterprise startups would do well to partner with
large corporations that control the data, the knowledge
workers, and the distribution channels.” Show Ad

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It’s in forging those partnerships that Formation 8 really

differentiates itself. The firm’s local teams in Korea, China,
and Singapore can help its portfolio with relationships, sales,
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deployment and market knowledge. When I asked
if corruption would be an issue, Lonsdale admitted some
Startups
concerns with how the Chinese army mixes with Chinese TC Sessions:
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Internet industries, but says most of Formation 8’s markets SeeSAP,Box,Atlassian&More
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like Korea are exceptionally honorable. Videos
San Francisco
Sep 5
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While there’s been a recent increase in deals between
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Silicon Valley and Asia, Lonsdale says the connection will Book Tickets Today
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grow, as smart enterprise and energy businesses disrupt the —
antiquated big company infrastructures developed 20 to 30 Events
years ago by the first enterprise wave. He concludes: “You Advertise
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need really talented engineers that are really good at big
More
data to fix the infrastructure in big industry. Obviously there’s
a market for that in the US, but Asia is an even bigger Search

market.”
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See Formation 8 partner Joe Lonsdale speak at TechCrunch Transportation
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Disrupt NY on May 1st.

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7/31/2019 Formation 8 Raises Its First Fund Of $448M To Plug Silicon Valley Startups Into Asian Conglomerates | TechCrunch

Formation 8 Raises Its First Fund Of

$448M To Plug Silicon Valley Startups
Into Asian Conglomerates
6 years ago Josh Constine Login

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