Founded 30 years ago, our Chairman, Mr Teo Ming Kian shares Vertex transformation journey, our successes and challenges, and our mission to continue building compelling enterprises in the years ahead.

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Vertex 30th Anniversary Gala Dinner Speech by Teo Ming Kian,
Chairman Vertex Holdings on 16 Oct 2018 at Flower Dome
“Here for tomorrow”. That’s our theme.
Indeed, that’s what we are - building today, champions of tomorrow – helping
technopreneurs realise their dream.
Ms Ho Ching, distinguished guests, ladies and gentlemen
Good evening.
We are honoured by your presence and friendship to celebrate with us
Vertex’s 30th
anniversary.
While we are here for tomorrow, this is also an occasion for nostalgia.
Please bear with me as I speak for those who have been with Vertex, going
through its ups and downs. Some still in Vertex, others who have left but still
keeping close and helpful contacts with us, knowing well I can’t do them
justice in expressing their full sentiments.
Vertex was founded 30 years ago. Lee Kheng Nam, our current Deputy
Chairman was the founding CEO.
I had no role in this but as a cheerleader with a ringside seat, from my perch in
Ministry of Defence (MINDEF), keenly interested in technology as a force
multiplier for the Singapore Armed Forces.
Ho Ching was of course a lot more engaged in the build-up of Vertex later, as
the CEO of Singapore Technologies (ST) and then of Temasek to which it was
transferred. No doubt she will have many stories to tell, which she will share
later.
Her attendance tonight as the Guest of Honour is therefore especially
significant so we could show our appreciation for her support of Vertex all
these years.

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Before Vertex was incorporated as a venture investment arm of ST in 1988, it
was incubating, knowingly or not, in the Technology Development Unit of its
subsidiary, Chartered Electronics Industries (CEI) set up 5 years before that.
And we have Toh Kim Huat to thank. He was then its General Manager.
We are grateful to the many people involved in the founding of Vertex. But
those we owe most to, are the people who stay committed and supportive in
its storied journey.
Whilst many kept away and disassociated when Vertex was troubled, I want to
single out one person, who not only did not abandon Vertex when it was deep
in its abyss, but sought ways to help it revive. And that’s Cheo Hock Kuan.
Without her, Vertex would not have existed today.
The story started with Vertex doing well.
• Good financial returns
• Presence in the US, Europe, Israel
• Several significant companies were set up in Singapore with its
contribution, including Chartered Semiconductors, Gemplus which
later became Gemalto, which supplied many of our cash cards
today.
Then, Vertex ran into some headwinds, got into a patch of turbulence during
the dotcom bust, resulting in a suspension of business, hibernating for 4 years.
Offices in the US and Europe closed down. The pool of talent, drained.
Worst of all, its reputation suffered. Some who invested in it after seeing its
early success, lost money and were unforgiving. Others used it as an example
that venture investment and technopreneurship in Singapore would never
work.
In 2008, Chua Kee Lock was brought in to raise Vertex from its slumber. His
first task was to manage and monetize the Legacy portfolio, several companies
within it deemed too far beyond redemption. And credit to him and his team –
including Joo Hock, Choon Chong, Seow Lan, Vertex was revived and
rejuvenated. Confidence of the sole LP, Temasek was won, with an injection of
funding, but with a mandate to focus only on Asia, primarily China, and to exit
Israel, like the US and Europe before it.

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We made good investments, delivering several unicorns that had us as their
first institutional investor.
Vertex Holdings became a full subsidiary of Temasek, de facto an evergreen
fund.
With Vertex on a steady path for growth and good returns, we had the
opportunity to dream about rebuilding a global platform especially when
technology and innovation feature prominently for economic development,
not just for Singapore, but for the world; and risk appetite for disruptive
innovation increased, not to follow a fad but a necessity to stay alive. The stars
and planets were aligned.
We got strong support from Temasek especially Theng Kiat, Dilhan, Wai Leng
and Wai Ching. Lest there be any doubt, the strong support is hard won, often
after robust debates and justifications. And rightly so. Dilhan, particularly is a
great champion for Vertex in Temasek. If Hock Kuan had given Vertex a new
lease of life, Dilhan strengthens it.
In 2015, Vertex underwent an important organisational transformation, to
establish itself as an enduring global VC platform. Vertex today adopts a
structure where direct company investments are made by a network of
separate and independent Vertex Ventures funds.
Each Fund is managed by owner General Partners (GPs), anchor-invested by
Vertex Holdings. It modelled after Vertex Ventures Israel, with Yoram, our
Israel Partner since inception. As an aside, Yoram was an entrepreneur who
sold me what he claimed as the most effective military product in its class.
That was 30 over years ago. It probably reinforced the keen interest in CEI for
innovation as they worked on the technology transfer of that product.
The first transformed was Vertex Ventures China. True to the venture spirit,
Choon Chong and Xu Ying took the plunge to convert from an employee to
owner with its attendant risks and reward.
We then set up the US fund with Insik and Jonathan as GPs.
Southeast Asia & India followed suit with Joo Hock and Ben.

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All together, we have 5 Funds - 4 targeting IT opportunities in the key
innovation hubs across US, Israel, China, South East Asia & India, and 1
targeting global healthcare opportunities.
Each Fund is independently managed by GPs with in-depth local knowledge
and networks to access the best investment opportunities.
With the exception of the healthcare fund which remains a Captive Fund, the
other Funds now have capital from third-party reputable, global institutional
and individual investors, meeting the test of market. These we call the
Network Funds.
We thank all our LPs for believing in us. Amongst these, we have some
Temasek board members, who invested in their personal capacities.
As part of the Vertex network, Vertex GPs leverage the global reach and
support of the Vertex platform to value-add to their investment and portfolio
management activities, and specially motivated to help sister Funds to
enhance their value to their portfolio companies.
The transformation may look simple and logical when strategized on paper.
But at the human level, each has its own story to tell:
The new US partnership that had to develop its own comfort with a
distant Centre it didn't know well.
The almost-abandoned and re-embraced Israeli partnership that had to
re-establish trust with a supposedly long-term anchor it thought it knew
well.
The converted Chinese partnership that had its partners left the comfort
as an employee to become an owner.
The Southeast Asian partnership that followed soon after, even though
it was then a region not many thought warrant a second look and risked
not able to convince enough third party LPs to join in.
The Healthcare fund that turned Network and back to Captive Fund.

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Together, issues were resolved and we turned out the stronger for it. The GPs,
across geographies and sectors, gelled. My appreciation to all our GPs and
staff for overcoming all obstacles to build this wonderful family.
We invested in successful enterprises with grateful founders singing our praise,
referring others and enlarging our deal flow. Grab founder, Anthony Tan for
example, revealed in no less public than a TV award event that Vertex believed
in him when his own father did not. We are grateful to him and other
founders for referring other dynamic founders to us, telling them to take our
money even if we give lower valuation because of the significant value we
bring. Such personal endorsements are powerful.
Today, Vertex manages over USD 2.5B in total assets across our underlying
funds, doing not too badly so far, ranked by some benchmarks in the top
quartile in the VC world and one of the most active VCs.
We are still growing and learning, driven by the sole objective of identifying,
investing and supporting potential global champions. And in so doing, deliver
good returns to our investors.
From just focusing on US and Europe when we first started, to consolidating
into China after the dotcom bust and then reviving Israel, and subsequently
investing in Singapore and the region, we have strategically reoriented
ourselves to become a global platform.
Throughout its 30 years, Vertex has seen significant successes and challenges.
The baptism of fire has provided valuable experiences and strengthened the
people within Vertex.
The history imbues in us what I would call a “disciplined empathy” with
founders and technopreneurs we support. That we do not abandon them at
their first sign of distress as they too would invariably face their own ups and
downs as they try to change the world with breakthrough and unconventional
ideas and innovation.
It turns on its head the conventional wisdom of “fast failures” and “pouring
good money after bad”. The trick of course is having the ability and discipline
and not emotionally hampered, to identify what seem to be “failure” and
“bad” but are really not.

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Indeed, we have seen some of our portfolio companies at the brink of oblivion
turning around with our additional support to rise again like a Phoenix,
delivering us exceptional returns.
The near-death experience of Vertex has enabled our people, directly involved
or rubbed off through association, to better fulfil our mission of nurturing and
supporting technopreneurs to build compelling enterprises.
It keeps us thinking how we could better deliver value to our stakeholders –
the founders, partners, investors.
One new initiative we are implementing in this regard is the set-up of a
US$250m Vertex Growth Fund, with the support of Temasek. This will allow us
to extend growth stage funding support to promising companies emerging
from the early-stage portfolios of our Vertex Funds, and capturing additional
value through our deep knowledge of these portfolios.
We even have third party investors who believe in our thesis and have the
confidence in us to invest in this first time Growth Fund. James is the GP, with
Kee Lock providing support as he has done with our other Funds that required
his additional attention especially in their initial phase of set up.
More than providing good financial returns to our investors, we regularly share
perspectives with key stakeholders. We engaged government agencies,
Temasek portfolio companies, social enterprises like NTUC on key disruptive
technologies and emerging trends - insights helpful in their strategic
positioning. And establish relationships valuable for our portfolio companies.
Many of them found customers or partnerships from these engagements.
We are increasingly engaging other regional and global corporates as well.
Others we are embracing are the supportive and helpful alumni and strategic
partners. Many are here tonight.
We look to building mutually beneficial relationships to uncover and nurture
more compelling enterprises together, mitigating risks and sharing rewards like
the forefathers of the VC industry did when they first started.
Vertex’s journey is reflective of Singapore’s efforts to nurture our own home
grown technopreneurial community and ecosystem. Today the community is

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growing well, and the environment has become vibrant. Several successful
start-ups are emerging and more risk-investors are coming in1
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We do our bit to help strengthen the community. A strong technopreneurial
talent base is critical for any economy based on innovation and enterprise.
The Technopreneur Circle is part of our CSR – to provide free co-working
space, mentorship, networking opportunities and inspiration to aspiring
technopreneurs.
It complements the universities’ programme for their students to be interned
in startups in established innovation centers around the world. First initiated
by the National Science and Technology Board, the universities continued and
expanded even after the support ended. Several companies we invested in
have founders from this programme. I am glad that the Government has
announced recently to provide support again for such a programme.
At our conference this afternoon, Minister for Finance reiterated the
Government’s focus on building an innovation-driven economy.
More than ever, accelerating technological advances and innovation will bring
even greater disruptions to economies and the world. Countries will have to
be well prepared for this. The role of venture capital as a lifeblood of new
enterprises cannot be overstated.
I am gratified that Vertex played a role as Singapore shifts to a knowledge-
based, innovation-driven economy by being one of the first VC firms here.
I have no doubt that the Vertex global network will continue its mission to
build compelling enterprises in the decades ahead.
Gather talents. Combine their strengths. Forge new frontiers.
Friends, colleagues, partners, thank you again for your contributions in making
the Vertex of today possible. We look forward to your unstinting support as
we journey forward.
Enjoy your evening.
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Source: Preqin.