By Jeffrey Ball | Silicon Valley's New Power Player: China | Fortune | December 2015
By Jeffrey Ball
One of Sonny Wu’s favorite restaurants in the city where he lives is a venerable wood-paneled haunt in central Hong Kong where the waiters wear black bow ties and the menu melds comfort food from the East and West. On a recent Sunday evening, dressed in jeans, an untucked red-and-white checked shirt, and a gold Patek Philippe watch, Wu, a 47-year-old venture capitalist, is attacking dinner in much the same way he attacks whole industries these days: He sits quietly in a corner, snaps up a range of options, and gorges himself.
As he demolishes a platter of barbecued chicken wings and washes it down with hot tea, Wu explains why he’s racing to corner two sectors he believes are primed for explosive growth: LED lights and electric cars. In March, Wu scored his biggest win yet. He beat out such suitors as KKR and Bain & Co. for a $3.3 billion purchase of 80% of Philips’ Lumileds unit, one of the world’s leading LED-light makers. Now he’s preparing to move the California-based arm of the Dutch multinational to China, where he is building factories to scale up the business.
A similar strategy led him in 2011 to buy control of Boston Power, a Massachusetts battery maker that boasted advanced technology but couldn’t commercialize it. He moved the company to China, and then, in 2014, he bought a stake in a little-known Chinese electric-car maker, Xindayang, which today is cranking out bulbous, brightly colored electric cars with Boston Power batteries under the hood. The company has sold about 32,000 electric cars this year—each for about $10,000.
Xindayang’s growth trajectory, Wu claims, puts it on track to soon sell many more cars than Tesla Motors, the California-based maker of luxury electric vehicles that, along with its CEO, Elon Musk, is a global sensation. “Elon Musk is sexy, but Elon Musk is not changing the world,” Wu declares, his fingers glistening with barbecue sauce. “Let’s be frank. The guy who’s making the $100,000 car is not changing the world. The guy who is making the $10,000 electric vehicle is changing the world.”
He pauses, then grins. “You cannot have caviar every day. You have to eat chicken wings.”
Wu—part Chinese, part North American, all audacity—is the model of a new breed of global high-tech financier. He grew up in China and Canada, dropped out of graduate school at the University of California at Berkeley, and speaks unaccented Mandarin, Cantonese, and English. He has luxury homes and offices in Beijing, Hong Kong, and Silicon Valley, and he acts like a local on both sides of the Pacific—a body of water he treats essentially as a puddle, hopping across and back, first-class, more than a dozen times in a typical year. A chauffeur in Beijing ferries him around in a Porsche Cayenne, the desk manager of Shanghai’s five-star Jing An Shangri-La Hotel knows him by name, and Wall Street’s biggest banks now recognize him as a serious player.
The brash investor is quickly amassing an empire that, bankrolled in part by his friends in the Chinese government and among China’s billionaire set, is snarfing up technology companies from across the U.S. and around the world. His strategy is simple, unsentimental, and a sign of the times: Buy Western companies that have good technologies but poor domestic growth prospects and bring them to China, where Wu and his contacts serve up the money and the market to help the firms grow very big, very fast.
China, the world’s biggest polluter, is racing to clean itself up. The skies above its cities have become so poisonously smoggy that what started as a public-health danger has become, for China’s ruling regime, a political threat. That’s why Beijing is cracking down on pollution. The country’s leaders are mandating improved efficiency for coal-fired power plants, rolling out fat incentives for renewable energy and electric cars, and advising government-affiliated banks to help finance this power shift. At the same time, the country sees clean-energy technologies as a huge new market. Just as China cornered the manufacture of T‑shirts and televisions a generation ago, so it is moving to dominate the production of electric cars and solar panels in the near future.
In the U.S., China’s clean-energy push elicits both praise and terror. Environmentalists laud it, arguing that only if China, the world’s biggest greenhouse-gas emitter, goes green will the world have any chance of solving climate change. Nationalists decry it, fearing that China is snagging American clean-energy technologies that could, in the fullness of time, look like lost crown jewels. As for the Silicon Valley entrepreneurs developing these technologies, they’re simply seeking capital to fund their ventures—and finding that increasingly it comes from China.
Read the full piece here.