Former Alibaba Scientist Backs Founders - Beyond Academia

A Unique Career Trajectory

Min Wanli’s professional journey is highly desirable among those aspiring to careers in computer science. Demonstrating exceptional aptitude, Min gained admission to a leading research university in China at the remarkably young age of 14.

He subsequently earned Ph.D. degrees in both physics and statistics from the University of Chicago. Following this, he dedicated almost a decade to roles at both IBM and Google, accumulating significant experience.

Returning to China During the Internet Boom

Similar to many young Chinese scientists working in the U.S., Min chose to return to China during the nation’s burgeoning internet expansion in the early 2010s. He accepted a position within Alibaba’s emerging cloud division.

There, he played a pivotal role in applying the company’s technology to practical industrial applications. This included utilizing visual identification systems to optimize highway traffic flow and leveraging computing resources to enhance factory productivity.

Founding North Summit Capital

In July 2019, Min embarked on a new challenge. He resigned from Alibaba Cloud, which had become a substantial growth engine for the e-commerce giant and, at the time, China’s foremost public cloud infrastructure provider.

Despite having no prior experience in investment, he established a new venture capital firm named North Summit Capital, signaling a significant career shift.

The Shift in Enterprise Perspective

“Around 2016 and 2017, many businesses were hesitant about the concept of ‘digital transformation’,” Min explained from his office in Shenzhen, overlooking a blend of urban communities and modern office buildings.

“However, by 2019, after witnessing successful implementations [through Alibaba Cloud], they no longer doubted its potential,” he continued, speaking with genuine enthusiasm.

Addressing the Demand for Digital Solutions

“Suddenly, there was widespread demand for digital solutions. But how could a team of only 400-500 people possibly meet all these needs?” Min questioned.

His response wasn’t to directly serve established factories and corporations. Instead, he aimed to fund and empower companies specializing in providing these services.

Securing Initial Funding

Min quickly secured the first fund for North Summit, totaling “several hundreds of millions of dollars” from an anonymous high-net-worth individual based in the United Arab Emirates. He had initially met this investor while representing Alibaba at a tech conference in Duhai in 2018.

“Venture capital acts as a magnifying glass, allowing me to connect with numerous tech companies and share the insights I’ve gained, enabling them to effectively collaborate with clients in traditional industries,” Min stated.

Providing Strategic Guidance

“For instance, I often advise my portfolio companies on whether to prioritize selling hardware, software, or a balanced approach,” he elaborated.

Min actively seeks to be deeply involved in the companies he invests in. North Summit focuses on early-stage investments, with check sizes currently ranging from approximately $5 million to $25 million.

Supporting Portfolio Companies

To further support his investments, Min also founded Quadtalent, a technology service company providing post-investment assistance to his portfolio companies.

Criteria for Investment

The concept of digital transformation can be complex and challenging for investors, particularly given the fragmented nature of traditional industries. However, Min employs a specific set of criteria to refine his investment targets.

Firstly, a potential investment area must be data-rich. For example, subway systems could benefit from extensive sensor networks monitoring rail conditions. Secondly, the area should involve capital-intensive manufacturing or business processes, such as production lines utilizing expensive equipment.

Finally, the industry should heavily rely on repetitive human expertise, like traffic management by police officers.

The Importance of Interdisciplinary Talent

Successfully addressing industrial challenges requires not only the computational skills of founders but, crucially, their practical experience within a traditional sector. Consequently, Min actively seeks entrepreneurs beyond the confines of academic computer science.

“We currently require a new breed of interdisciplinary professionals capable of ‘compound algorithms.’ This means understanding sensor data, business logic, manufacturing processes, and computer algorithms. Simply applying a neural network as a ‘black box’ without considering these other factors is ineffective.”

Navigating a Competitive Landscape

Min encounters significant competition as investors seek the next leading Chinese equivalents of ABB, Schneider, or Siemens. The nation’s drive for technological independence across all economic sectors is intensifying, particularly in light of global supply chain disruptions caused by COVID-19.

This has resulted in soaring valuations for startups offering “industrial upgrade” solutions, as Min observed.

Focus on Value and ROI

However, factory managers are primarily concerned with the tangible benefits of automation solutions, regardless of the provider’s size or status. “Ultimately, the factory CFO will only ask, ‘how much cost savings or revenue increase does this software or equipment deliver?’”

Current Investment Portfolio

The investor is taking a measured approach to deploying his initial fund. After two years of operation, North Summit has completed four investments: TopScore, a 17-year-old footwear manufacturer adopting automation; Lingumi, a London-based English learning app targeting Chinese preschoolers; Aerodyne, a Malaysian drone service provider; and Extreme Vision, a platform connecting SMEs with affordable AI vision solutions. 

This year, North Summit plans to invest approximately $100 million in companies both within and outside of China. Optical storage and robotic process automation (RPA) are among the areas currently under Min’s consideration.