GCV Powerlist 2018: Alvin Wang Graylin

At the GCV Asia Congress in Hong Kong last September, Alvin Wang Graylin, China president of Vive at Taiwan-based HTC, gave virtual reality (VR) and AI as an example of how China’s five-year plans focused attention on a topic.

In a presentation on the topic and the excitement around it, he said China was willing to adapt and VR was being used as a tool to drive its fifth-generation (5G) communications infrastructure, as well as AI work. China was also setting the standards globally and Vive’s cloud VR business launched just before the congress required partnerships to enable 60 megabits per second download speeds to avoid latency issues.

HTC launched Vive X as a $100m VR accelerator in April 2016 with Kevin Leung, GCV Rising Stars 2018 award winner, coming on board as director in July that year to run its operations in Beijing and Shenzhen in China and now its newly opened location in Tel Aviv, Israel. It was set up as a series of accelerator programs in different cities to foster innovation in the VR sector and create an ecosystem around HTC’s Vive VR product.

Vive X has invested in more than 80 companies since it started, with Leung having managed more than 30 deals, according to Graylin.

For Leung award nomination, Graylin said: “It is an exciting time of rapid innovation for the VR industry now and Kevin has made a big contribution to the VR startup ecosystem with his efforts.”

Vive X recently announced its third batch of startups that would go through the program. Of the 26 companies that will participate across five locations, 14 will be located in Beijing (Future Tech, Genhaosan, JuDaoEdu, Lenqiy, PanguVR, Pillow’s Willow VR Studios, Yue Cheng Tech), Shenzhen (Antilatency, Configreality, Super Node, VRWaibao, Wewod) and Tel Aviv (Astral Vision, Remmersive), under Leung.

This continued growth is one of the biggest challenges that Leung said he faced. He said for his awards profile to keep up with the growing size and diversity of the accelerator’s community, his team also needed to keep growing in pace.

Perhaps the biggest success of Vive X so far was a company in its first batch, TPCast, which has developed a wireless adapter for VR headsets, removing the need for cables to connect to the PC that is doing the graphics processing.

“It is a team that I incubated last year [2016], helping them to transform a proof of concept to a mass consumer product in just months,” Leung said.

The TPCast adapter is the first wireless solution for VR, which competitors in the market had previously said is a problem that they did not expect to be solved for another two years. The RMB1,400 ($220) device was offered for pre-order in November 2016 through Vive’s Chinese site and reportedly sold out within minutes.

Leung said the company had brought in a massive return on investment, however as it is in the process of raising a new round he asked that we not disclose figures. He added: “In general, over one and a half years of running the accelerator we are seeing three to five times returns on most investments despite it being the so-called VR investment winter.”

Building a team and such deals help explain why Graylin last year graduated so quickly from GCV Rising Star to Powerlist so quickly.

Few people cram as much in to their years as he manages in a quarter. He said: for last year’s profile “Key items I am especially proud of beyond what was in the Rising Stars summary is we have closed our batch two of the Vive X accelerator and invested in 36 more companies – in total, over 70 startups invested by Vive X within its first year, making us the most active virtual and augmented reality investor in the world. That does not even include our non-Vive X investments.”

The second batch came from San Francisco (CognitiveVR, Construct Studio, Forbidden Mechanism, HyperfairVR, Limitless, Mindesk, Realiteer, the Rogue Initiative, Subdream and Vertebrae), Beijing (Mint Muse, Hexa, Vito, Invrse Reality, PlusOne, Multiverse, Red Accent, Byond and OVA), Shenzhen (Transmind, Aurora AR, Kiwi Technology, Shengda, Brokencolors, bHaptics and SoccerDream) and Taipei (Opaque Space, Snobal, Memora, Xikaku, Appnori, Vrani and Tegway) with applications from a new Vive X in Israel.

Graylin also helped close a deal between Warner Brothers to make it the exclusive virtual reality (VR) content and distribution partner for Ready Player One, a $450m budget VR movie directed by Steven Spielberg which released in March.

In November 2016, HTC signed a strategic cooperation pact with the government of Shenzhen, a southern China city and special economic zone (SEZ), to set up a VR research institute as well as a RMB10bn ($1.5bn) venture fund.

Part of Shenzhen’s interest in HTC lay in the groundwork Graylin had done in building the industry through alliances.

In August, HTC also signed a strategic cooperation agreement with China-based Alibaba jointly to develop VR technology based on the online retailer’s cloud platform, Aliyun. Three months later and Alibaba and HTC together demonstrated Alibaba’s Buy-plus mobile VR channel on HTC-powered VR-ready smartphones.

In June, Graylin became president the VR Venture Capital Alliance with 28 initial members managing a combined $10bn. Another eight members joined in November to take the total to $12bn.

Alliance backers include Colopl VR Fund, a $50m specialist fund launched by mobile game publisher Colopl in December 2015, the Virtual Reality Fund, backed by Colopl and game developer Gumi, and Legend Capital, the corporate venturing arm of conglomerate Legend Holdings.

The corporates are augmented by institutional investors such as venture capital firms Sequoia Capital, GGV Capital, Qiming Venture Partners, Matrix Partners and Redpoint Ventures.

Graylin is also chairman of the Industry of Virtual Reality Alliance, launched in September 2016 as the only government-endorsed VR organisation in China.

These connections helped drive entrepreneurs to HTC and create the dealflow for the VR fund along with HTC’s own Vive X VR Accelerator.

Such speed and scale creates both opportunities and challenges. Graylin said for his Rising Stars profile: “Our biggest challenge with the investment arm has been speed of deal execution and legal complexity. The companies we are looking at come from all over the world and with differing company structures. Our internal legal and deal teams are not used to working with companies at this stage and with so many at the same time. We did 33 deals in batch one, and likely will do 30 to 40 more in January 2017. It will hopefully get better over time as we standardise our processes and documents.”

Perhaps unsurprisingly, given such an immediate impact as regional president, Graylin said: “I am very happy with what I am doing today and the impact I am making. VR will be changing all our lives in a significant way and I am excited to play a role in helping direct where that is headed.”

Looking more broadly, he said making a stronger venture and entrepreneurial industry required other corporations to “hire more entrepreneurs into the company and take more risk on high-potential people and deals – do not let the lawyers and accountants drive or inhibit decision-making.”

Graylin said before entering CVC he had been an entrepreneur for the previous 15 years, founding four venture-backed startups in the US and China and also working for several public companies. He said: “Having that background make me understand the mindset of both the investor and the entrepreneur, which lets me better communicate and collaborate with both sides.”