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Notable Capital's Hans Tung on why he thinks founders need to play the long game | TechCrunch

April 30, 2024 8:10 PM0


Hans Tung, a managing partner at Notable Capital, formerly GGV Capital, has a lot of thoughts on the state of venture today.

Notable Capital is a venture firm with $4.2 billion in assets under management, focusing on investments in the U.S., Latin America, Israel, and Europe.

Tung, whose portfolio includes the likes of Airbnb, StockX and Slack, recently sat down with TechCrunch’s Equity Podcast to discuss valuations, why founders need to play the long game and why some VC firms are struggling. 

He also let us know why he’s still bullish on fintech and what sectors in the fintech space have him especially excited.

We also discussed recent changes at his own firm, which evolved from 24-year-old cross-border firm GGV Capital and rebranded its U.S. and Asia operations to Notable Capital and Granite Asia, respectively. GGV’s transformation is the latest in a string of changes we’ve seen in the world of venture capital, including personnel shifts at Founders Fund, Benchmark and Thrive Capital.

Below are excerpts from the interview, which has been edited for clarity and brevity.

TechCrunch: Last year, we talked about down rounds. At the time, you thought they were not necessarily a bad thing. Do you still have that same mindset?

Hans Tung: I’ve been in this biz for almost 20 years. We’re long-term in the way we approach things. And I always know that it doesn’t matter about the markups. This is like getting a poor [report] card, or getting a test exam score, it doesn’t really matter until you actually have an exit. IPO is actually just a milestone, not the end game. IPO is the beginning for public investors to be along for the ride. So if you think longer term, valuation up or down temporarily doesn’t matter as much as generating a big outcome at the end.

I think that whatever it takes to scale the business is what the company and the founders and board need to focus on doing to manage the business the best they can every step of the way.

I think that what founders don’t realize is that this choice is not between shutting down and do a down round, because in that situation, you will choose a down round every single time. The challenge is when you are faced with the prospect of holding on to a valuation, or raise a down round. If you don’t do it, you run the risk of shutting down later. But I’ll tell you if you’re close to shutting down, no one’s gonna invest in you

TC: Overall, with regards to the investing landscape, how different is it so far this year compared to last?

HT: I think it’s a continuation of what we saw in the second half of 2023. Obviously, AI is an outlier. AI is way, way overvalued right now. You could argue that we’re only in the first inning, or the first half of the first inning for AI, so people are willing to overpay…You do see a lot of crazy rounds happening at the beginning of a boom, but there will be bifurcation, and there will be companies that end up doing great, and most companies may not. 

For the most part, I still caution founders to not compare themselves with sectors are doing well, but fully focus on managing their business. 

TC: How is your pace of investing compared to recent years? How have VC firms been impacted by the slowdown?

HT: I think we’re more at the 2022 level. So more than 2023. But 2021 was an outlier. And it’s not good for business. And it’s not good for the ecosystem. Without naming names, you do see firms being impacted by what what they were doing in 2021 and that has made them slow down a lot more now, which is unfortunate, because many of them are great investors, they’re in great companies, and it’s too bad that they cannot participate as a result of just indigestion.

For example, some companies raised a large round in 2021. And even though the business is growing revenue about 40% to 50% year on year and they can probably IPO soon in the next year or so from a maturity standpoint…but because the valuation they raised in their last round is so high, that they are not at that level of valuation in the current public market, where the multiples have compressed quite a bit. So they have to wait. And as a result, the funds that invested in them in 2021 cannot get cash back, because there’s lack of liquidity and the LPs cannot get money back either. So we don’t have that recycling of money going back to the LPs who continue to invest in new funds. The whole system suffers as a result.

TC: I was surprised to report recently that funding in the fintech space had dropped to its lowest level in seven years in the first quarter of this year. What do you think about that?

HT: I think for fintech, given the high inflationary environment that we had, and definitely high interest rate that’s coming down, but not coming down quickly – it is harder for people to decide about fintech. But if you look at the other set of metrics, financial services as a category, the market cap of all public companies in the banking insurance financial service space is over $10 trillion. And of that $10 trillion, only less than 5% are in fintech companies. And so if we all know that the best fintech companies are growing faster than financial service companies, it’s just a matter of time that low single digit penetration and market cap will increase over time. So it will have ups and downs. Like ecommerce, fintech might not have too many winners, but the ones that can win can have a huge market.

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Notable Capital's Hans Tung on the state of VC and the upside to down rounds | TechCrunch

April 20, 2024 8:24 PM0


To some investors, “down round” is a dirty phrase, but not to Notable Capital’s Hans Tung. Hans is a managing partner at Notable Capital, formerly GGV Capital, a venture firm focusing on investments in the U.S., Latin America, Israel, and Europe.

Hans, whose portfolio includes the likes of Airbnb, StockX and Slack, sat down with TechCrunch’s Equity podcast to discuss the overall state of venture and why he still believes down rounds can make a lot of sense. Per Hans, “An IPO is actually just a milestone, not the end game. An IPO is the beginning of public investors being along for the ride. So when you think in longer-term valuations, up or down temporarily doesn’t matter as much as generating a big outcome at the end.” It’s worth noting that by September 2023, nearly 11% of the year’s VC deals were down rounds, according to PitchBook data.

Hans also let us know why he’s still bullish on fintech, and what sectors in the fintech space have him especially psyched.

Of course, we dug into recent changes at his own firm, which evolved from 24-year-old cross-border firm GGV Capital and rebranded its U.S. and Asia operations to Notable Capital and Granite Asia, respectively. GGV’s transformation is the latest in a string of changes we’ve seen in the world of venture capital, including personnel changes at Founders Fund, Benchmark and Thrive Capital.

Hit play to hear what Hans has to say on these topics and more! Equity will be back on Monday. See you then!

Equity is TechCrunch’s flagship podcast and posts every Monday, Wednesday and Friday. You can subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.

You also can follow Equity on X and Threads, at @EquityPod.

For the full interview transcript, for those who prefer reading over listening, check out our full archive of episodes over at Simplecast.




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GGV Capital is no more, as partners announce two separate brands | TechCrunch

April 13, 2024 2:24 AM0


The VCs who long ran GGV Capital, the 24-year-old cross-border firm that helped serve as a bridge between the U.S. and China, have settled on two new brands roughly six months after announcing they would split their U.S. and Asia operations.

Veteran investors Jenny Lee and Jixun Foo just rebranded their Singapore-based operation as Granite Asia, as first reported in Forbes. Meanwhile, Hans Tung, a firm co-founder who lives in the Bay Area, announced on X on Saturday that the U.S. team is now called Notable Capital.

GGV Capital announced last fall that it was splitting up its team amid growing tensions between the U.S. and China, though it never cited the atmosphere as the explicit driver of the move.

Sequoia Capital similarly split up its operations last year as it navigated geopolitical tensions. In Sequoia’s case, the U.S. team held onto the storied brand, while Sequoia India & Southeast Asia was rebranded as Peak XV Partners, and Sequoia China was rebranded as HongShan, the Mandarin word for redwood.

The thinking in abandoning the GGV Capital brand, per a source familiar, was that because both teams are operating separately going forward, they felt it was best to develop new brands.

Granite Asia is being led by Lee and Foo, native Singaporeans. Lee is a regular fixture on Forbes’s Midas List of top-performing VCs, with nine IPOs in the last five years, including the smartphone giant Xiaomi and the software development company Kingsoft WPS, which went public in 2018 and 2019, respectively.

Foo, whose title was formerly global managing director of GGV Capital, is meanwhile credited with deals that include the electric carmaker Xpeng Motors, which went public in 2020; ride-hail giant Didi, which is reportedly planning a listing in Hong Kong this year; and the delivery company Grab, whose shares have underperformed since it became publicly traded through a special purpose acquisition vehicle in late 2021. (It was reportedly in talks as recently as last month to merge with another beleaguered rival, GoTo Group.)

Granite Asia will focus on startups in China, Japan, South Asia, Australia and Southeast Asia.

Notable Capital — which says it plans to continue investing in the U.S., as well as in Europe and Latin America — is being led by the same investors who’ve been based in its Menlo Park office for many years. That includes Tung, who is Taiwanese-American and whose deals include known brands like Airbnb, StockX and Slack; Jeff Richards, who has backed Coinbase, the Bluetooth-tracking outfit Tile and the software development company Handshake; and Glenn Solomon, whose deals include HashiCorp, whose software helps companies operate in the cloud (it’s reportedly weighing a sale right now); the publicly traded house-buying platform Opendoor; and the compliance automation startup Drata.

Oren Yunger, the newest member of GGV Capital, also remains on team Notable. Yunger had joined GGV as an investor in 2018 and was promoted to managing director last fall.

Another longtime managing director at GGV Capital, Eric Xu, who is based in Shanghai, will continue to oversee the original firm’s independently operated yuan-denominated funds.

Roughly two-and-a-half years ago, GGV Capital announced it had raised $2.5 billion for its new funds, marking its largest family of funds ever. The investors have since split those assets under management, along with the capital raised prior, such that Granite Asia is now managing a collective $5 billion altogether, leaving Notable Capital with roughly $4.2 billion based on GGV Capital’s assets under management at the time the split was announced.

Pictured above, left to right: Jeff Richards, Eric Xu, Glenn Solomon, Jenny Lee, Jixun Foo and Hans Tung 




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Team management app Homebase welcomes $60M Series D to give SMBs ‘superpowers’ | TechCrunch

April 12, 2024 10:47 PM0


While there are countless tech companies that make HR technology for small and midsized businesses, much of it is geared toward “professionals who sit at desks in some capacity,” insists Homebase founder and CEO John Waldmann.

Homebase is HR software that targets the two-thirds of the American SMB workforce with hourly jobs that require them to be on-site. After nabbing over 100,000 small businesses as customers, covering over 2 million employees, Homebase recently closed on $60 million in Series D financing. L Catterton Growth, the tech venture arm of one of the top private equity firms, led the round and was joined by Emerson Collective. The round also includes existing investors, Notable Capital, Bain Capital Ventures, Khosla Ventures, Cowboy Ventures and PLUS Capital.

Homebase offers payroll, shift scheduling, timesheets, hiring and onboarding, communication and HR compliance.

“It’s really hard to raise capital now, and the fact that they raised with L Catterton Growth says a lot about the team and performance,” said Jeff Richards, investor and managing partner at Notable Capital (formerly GGV Capital).

“Hourly workers have a lot of the same desires for flexibility and certainty, but it shows up in entirely different ways, and that’s been our core mission,” Waldmann said.

Homebase raises $71M for a team management platform aimed at SMBs and their hourly workers

Richards agrees. He said that SMB tech for frontline or hourly workers doesn’t get nearly the attention it deserves despite the fact that it may affect over 55% of the workforce. He also said that artificial intelligence will be a major enabler of small businesses, and companies like Homebase will enable them to “build amazing businesses.”

Despite the founder’s and investor’s enthusiasm, Homebase isn’t alone in serving this hourly worker market. Others include Workstream, building mobile-first hiring and onboarding tools; rewards platform Salt Labs; and shift payment tool Clair. Still, Richards makes a case that Homebase’s growth is impressive.

“To have over 2 million workers on Homebase, which is over 2% of the workforce, is impressive for a private company,” Richards said. “If the numbers keep growing, it could be an important company from a technology and economic standpoint.”

TechCrunch last reported on Homebase in 2021 when the company raised $71 million. Since then, the company leaned into additional financial services products and AI-enhanced features like improvements to its automated payroll capabilities. It is also working on automated tip management.

The round gives Homebase a total of $169 million in venture-backed capital. In 2021, sources told TechCrunch’s Ingrid Lunden that the company’s valuation was between $500 million and $600 million. Waldmann declined to confirm that or provide an updated valuation other than saying it was not a down round.

In addition to R&D investments, Homebase made other changes earlier this year with the appointment of Philip Moon as its new CFO. Moon previously held strategic finance roles at companies such as Square and Grove Collaborative. Company co-founder and chief operating officer Rushi Patel also added the title of chief revenue officer.

“We are using technology to give workers superpowers and in fact, make the work more human, not less,” Waldmann said. “There’s so much data that shows the importance of good jobs in the health of communities. Small businesses have always provided that, and this, to me, is why our mission is so important to make these jobs even better.”

A SaaS revolution is coming for the 99%


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