Last weekend, Crunchbase News explored which U.S.-based schools minted the most unicorns. While digging through the alma maters of VC-backed entrepreneurs, we found another interesting phenomenon: some of the most-heavily-funded companies in Asia happen to have founders who went to schools in the U.S. These founders have built companies in every industry you can think of, from ridesharing, fintech, and agtech.
To be clear, we are not implying that creating a successful startup requires an American university degree or that an education in the U.S. is superior to anywhere else. However, we wanted to know how a U.S. education influences founders who were born and raised in Asia and why they chose to base their businesses in their home countries.
To satisfy our curiosity, we dug up companies with the most funding that met the criteria of Asia-based startups with U.S.-educated founders. Where these founders come from may not surprise you, but their reasons for relocating go beyond H-1B visa problems.
Charting The People And Their Startups
Among the top ten most funded companies in Asia with founders schooled in the U.S., five have already raised over a billion, and all have made Crunchbase’s Unicorn Board.
China dominated the top ten list:
To give you a more in-depth perspective, we picked three companies representing different countries to dive into:
- Meituan-Dianping, China’s version of Yelp, has raised $4.3 billion to date. It’s backed by some of the most well-known VCs such as Sequoia China, DST Global, and Tencent Holdings. Since its inception in 2003, the startup has expanded from providing consumer reviews to offering group promotions, restaurant reservations, and delivery service. Founder and CEO Tao Zhang, born and raised in China, graduated with an MBA from the Wharton School.
- Grab became the darling of Southeast Asia’s ride-hailing market after receiving a $2 billion investment from Didi Chuxing and Softbank. The Uber rival has raised $3.4 billion and is currently valued at $6 billion. Its co-founder and CEO Anthony Tan, originally from Malaysia, received a dual degree in Economics and Public Policy from the University of Chicago and went on to graduate from Harvard Business School.
- Snapdeal, an online marketplace platform based in India, has raised $1.6 billion from investors including its e-commerce predecessors Alibaba and eBay. CEO Kunal Bahl, born in India, graduated from University of Pennsylvania with a dual degree in business and engineering.
To complete the picture of total funding amounts, we charted company distribution by country. The chart is limited to Asia-based companies whose founders were born in Asia, yet received their higher education from American institutions.
42 percent of Asian companies with U.S.-educated founders reside in India. China ranks as the second most popular location, where 25 percent of startups headed by U.S.-educated founders are headquartered. Others hail from Singapore and other, smaller Asian nations.
It came at no surprise that India and China took up most of the pie since the two countries send the most international students to the U.S. As the third largest startup hub worldwide (lagging behind the U.S. and the U.K.), India also surpasses China in terms of startup numbers.
Crunchbase News had the opportunity to chat with an entrepreneur who makes up part of our dataset. Jason Gui, Co-Founder and CTO of Vigo Technologies, was born in Shenzhen, China. He attended high school in New Zealand, and graduated from the University of Pennsylvania in 2013 with a dual degree in mechanical engineering and marketing from the Wharton School.
His startup branched off from his senior design project, a pair of glasses that vibrates and helps drivers stay alert behind the wheel. Upon winning the senior design award and receiving feedback, Gui’s team decided to commercialize the device.
Gui has long been active in the entrepreneurship circle, dabbling with various projects at school and attending meetups in Philadelphia. Before Vigo, Gui started a video show called Three Fellows, featuring Chinese students studying abroad in the U.S.
“The overall education in the U.S. is a lot more freeform and entrepreneurial. It encourages you to innovate and test out your own ideas,” said Gui. “All of the opportunities and resources that Penn and Philly offered paved the way for [building my startup].”
After graduating from college, Gui attended HAX’s accelerator program in Shenzhen. When the three-month program ended, he flew back to San Francisco and set up an office there. Since then, Gui has been flying back and forth and coordinating between Vigo’s Shenzhen and San Francisco office.
But unlike his friends, who went back to China for bigger market opportunities, Gui returned due to the nature of his business. Though Gui’s company targets mostly U.S. and European markets, manufacturing and hiring in China makes a lot more economic sense for them. Gui also noticed that China has a lot of capital flowing, and those investors are looking for high-quality investments headed by China-affiliated talent overseas.
“Aside from the $150,000 from HAX, the $700,000 we raised in our seed round in 2014 all came from Chinese investors,” Gui told Crunchbase News. “I spent like six or seven months raising capital in San Francisco, but it didn’t work out. When I came back to China, I finished raising within a month or two.”
Doing business in China was all well and good, but Gui did experience some level of culture shock.
“In the U.S., when you are meeting an investor, you are probably meeting them in the office or at Starbucks. You sit down, talk about your company and they’ll get back to you later. In China, when you ask to meet an investor, they are like: ‘oh it’s my birthday tomorrow, come to my birthday party and we can discuss it there.’ ”
The unpredictability of China’s VC community also took Gui some time to adjust. Chinese VCs, though willing to invest, are fast-evolving and unregulated.
“We had five or six top-tier investors who signed term sheets and didn’t invest. There were like internal conflicts within the VC firm, [and other] random events beyond our control. It’s not like the U.S. where VCs have been around for 20 or 30 years,” Gui analyzed.
Despite the nuances in dealing with Chinese investors, Gui found setting up a location in his home city a positive move for his company after all.
To Stay Or Not To Stay?
Applying to U.S. colleges is already a highly selective process for international students in Asia, most of whom try to work in the U.S. after graduation. However, trends indicate that you may want to consider leaving the saturated Silicon Valley tech market, and relocating to your home country, if you decide to start your own company.
We excluded companies that already got acquired or went public. In other words, we only looked at private companies in Asia with founders schooled in the U.S.
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