Early Baidu backer Draper weary of China investments amid capital controls

Tim Draper. Photo: DFJ website

Billionaire investor Tim Draper, an early backer of Baidu Inc., has stopped investing in China-based companies because getting money out of the country has become too difficult.

China restricts the amount of money that can leave its borders to limit the pressure on the yuan and recently tightened capital controls. The moves have already scuttled some takeover deals.

“I’m not investing in China. I’ve stopped, I’ve closed the door,” the managing partner of Draper Associates said in an interview in Sydney on Tuesday. “Why would I invest in a country where they don’t let money leave? I’m a fiduciary, I have to take care of my investors.”

Draper gained fame for investments in startups that went on to become household names, including Tesla Inc., Hotmail and Skype. He also backed blood-testing startup Theranos Inc. and has defended founder Elizabeth Holmes even as questions have been raised about the accuracy of the company’s technology.

While China may be off his agenda, Draper still has an appetite for investments in the developing world. A passionate supporter of bitcoin and the underlying blockchain technology, he expects the take-up of new digital forms of payment will be faster, in the same way that many Chinese skipped fixed telephone lines and went straight to mobile.

“I think the same thing is going to happen in place like Africa, Indonesia, South America — they are going to just jump straight to bitcoin,’’ Draper said. He recently invested in Africa’s BitPesa, which aims to make doing business across the continent and different currencies easier.

He lauds the attitude to bitcoin in Japan, where the government has decided to embrace the currency and formally regulate it. Another of his recent investments is U.S based Tezos, where Draper participated in a so-called initial coin offering of digital tokens.

“Geographic borders have fallen,” Draper said, arguing good ideas will spread regardless of where they are originated. “I am agnostic as to where the company comes from as long as it is a place I can invest in and get my money out.”

Also Read: JPMorgan Chase seeks a Chinese venture with full control

Bloomberg

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.