LG scion, ex-Facebook CFO, and early Uber investor start $400m fund for Asia

Editor’s note: this article previously cited Bloomberg, which identified Joel Sng as the great grandson of Sun Yat-sen. It’s been brought to our attention that there is no association.

Brian Koo, co-founder and managing partner of Silicon Valley venture capital firm Formation 8, today announced a new fund that’s sure to pique the interest of entrepreneurs across Asia. In a letter to investors obtained by Tech in Asia, Koo – the grandson of Korean tech giant LG’s founder – details his plans for a new fund under the Formation Group – a new entity that he describes as the “evolution of Formation 8.”

[I’ve] appreciated the chance to learn […] about my own style of investing and how I can be most valuable to the companies I support. If Venture Capital 1.0 was an asset class surrounding the management of a portfolio of early stage companies, I believe Venture Capital 2.0 is the complete backing of transformational companies through multiple stages with not just capital, but intense focus, time, and energy being spent on a small number of big opportunities poised for success. This school of thought aligns with my investment philosophy and strengths, as well as our core commitment to partnership.

Koo co-founded Formation 8 with Joe Lonsdale and Jim Kim in 2011. Across two funds, the firm invested more than US$1 billion in 70 startups – most notably Oculus VR, which was later acquired by Facebook for US$2 billion.

Lonsdale last week announced that he was parting ways with Koo to launch his own US$400 million fund, called 8 Partners. Industry sources tell Tech in Asia that Formation Group is also raising US$400 million for its Asia-focused fund.

A US$400 million SEC filing in June led several media outlets to predict that Formation 8 was in the process of raising a third fund for Asian startups. It’s now clear that the new funds are separate, and that Formation 8 will not be raising another fund – but Koo left the prospect of future collaboration with Lonsdale open.

“After a highly successful two funds at Formation 8, now is the right time for Joe and I to create new entities so he can pursue his portfolio management style of investing,” Koo adds. “We remain as friends and allies and business partners in the first two funds.”

Formation Group today revealed it has made its first five investments consisting of three Asian startups and two American ones:

• Yello Financial Group (YFG), a Korean fintech platform and Yello Mobile subsidiary
• Memebox, an ecommerce store for Korean cosmetics
• Honestbee, a Singapore-headquartered last-mile logistics provider
• NextVR, a provider of live-streaming virtual reality content based in California
• Eva Automation, a smart home platform from California

Individual amounts were not disclosed, and Formation Group declined to specify what percentage of its new investments would be in Asian startups specifically.

Friends in high places

Joining Koo are senior advisers Gideon Yu, Joel Sng, and Chee Cheong Gay.

Yu, co-owner of the San Francisco 49ers football team, previously served as CFO at both Facebook and YouTube. He was also a general partner at Khosla Ventures, where he led the firm’s founding investment in Square. Yu oversaw more than 30 acquisitions and investments as the senior vice president of Yahoo – including Alibaba, Overture, and Flickr. He’s currently the CEO of Eva Automation.