GGV Capital’s Jenny Lee reflects on investing in China’s tech market

Jenny Lee, a managing partner at private equity firm GGV Capital, says being a venture capitalist (VC) in China can veer from analyzing companies and deals to being a psychiatrist or even a marriage counselor when needed.

Based in Shanghai, Lee said in an interview that she once had to call up a startup founder’s wife, who thought her husband was neglecting their family, to explain that the man frequently slept at the office because he was working hard to raise a new round of financing to keep their company afloat.

GGV’s Jenny Lee / Photo credit: GGV Capital

“Sometimes, female investors are more emotional and sensitive than male investors,” Lee said. Still, she considered that trait a strength because “VC [deal making] is a people business.”

Such insights have served Lee well since 2005, when she established Menlo Park, California-based GGV’s first office in China.

At GGV, she has been instrumental in investing and helping eight early-stage startups go public on the New York and Hong Kong stock exchanges, as well as on the Nasdaq-style ChiNext board of the Shenzhen Stock Exchange.

Lee, 47, is widely considered to be one of the most respected VC investors in the world’s second-largest economy according to the 2019 Midas List, the annual ranking of the world’s top tech investors published by Forbes Magazine in partnership with TrueBridge Capital Partners.

She first made the Midas List in 2012, ranked at No. 94. She cracked its upper echelon in 2015 when she took the No. 10 spot, which was the highest rank for a female VC at the time. This year, she ranked at No. 19.

In China, Lee’s investment portfolio ranges from drone maker Ehang, developer of China’s first autonomous flying taxi, to Liulishuo, operator of an AI-powered English-language learning app. Her past investments on the mainland include smartphone giant Xiaomi Corp, video-based social network operator YY, high-end electric scooter maker Niu Technologies, and data center services provider 21Vianet.

“A lot of my investment decisions derive from my life,” said the Singapore-born Lee, who credits her deep understanding of China’s tech market to being constantly curious and open to new information. Her decision to invest in Tangdou, the operator of a social media app that teaches elderly people how to dance, was based on her observation of middle-aged Chinese men and women dancing for hours at a public square.

Tangdou, which means “jelly bean” in English, was launched in 2015 as a dancing video app by Beijing-based Xiaotang Technology. It features tutorials that break down the choreography for a variety of dance styles, including Chinese folk dance, jazz, ballroom, and even hip-hop.

Lee, however, also admits to missed opportunities, which have provided valuable lessons about China’s tech sector.

The GGV team in China knew about ByteDance founder Zhang Yiming and his project, news app Jinri Toutiao, very early on, but decided not to pull the trigger and invest in the startup.

“We thought advertising-driven businesses had short ceilings in China,” Lee said. “We were wrong.”