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Crossing Borders with Nathan Lustig


Hello and welcome to Crossing Borders with Nathan Lustig, where I interview entrepreneurs doing startups across borders and the investors who support them, with a focus on companies that have some relationship to Latin America.

May 15, 2018

Jie Hao is a partner at Magma Partners who previously built and sold two companies before heading to Chile to look at investment opportunities in 2012. To make this podcast, I repurposed a segment of a conversation we had while I was in Shanghai for the launch of the partnership between Kr Space and Magma Partners to create the Sino-Latin American Accelerator. This conversation was a part of our doing business in Latin America course through 36Kr, China's version of TechCrunch, where we taught Chinese entrepreneurs and investors about the growing opportunities for investing in Latin America.

In this short form episode of Crossing Borders, we talk about how Magma Partners got involved in China, why Chinese investment is important for Latin America, and how China and the US are looking at Latin America differently.

From Magma Fund I to the Sino-Latin American Accelerator

After working with us on Fund I, Jie tried to raise funds in China for Fund II, and was originally met with skepticism. We realized Chinese investors, like US investors, knew very little about Latin America, so Jie worked with the 36Kr team, the Chinese version of TechCrunch, to allow us to write a guest column on doing business in Latin America. The course was such a success that we created a business, then a partnership with Kr Space, a Chinese version of WeWork and 36Kr subsidiary, to encourage business relations between Latin America and China.

China seizing opportunities in LatAm while the US steps back

As the US has taken a step back from Latin America, China has leaned in. Jie speculates that Chinese technology is more applicable to the Latin American context than tech in the US. Giant Chinese companies like Didi Chuxing and AliExpress are already operating in Latin America, while US competitors have not taken their investment in LatAm to the next level.

Many Latin American businesses that are solving real problems are already profitable, and have much lower valuations than in the US or China. This makes startups in LatAm an attractive investment for Chinese and US investors. The Sino-Latin American Accelerator, and Magma’s event series, China-Latin America Innovation Year, look to bring China and LatAm together for greater investment and technology transfer between the two regions.

Show Notes

[1:24] - Nathan Lustig explains how he met Jie and how Magma started working in China

[6:39] - How Jie started working with Magma Partners

[8:45] - What the LatAm tech ecosystem looked like when Nathan arrived in 2010

[10:10] - The trend toward Silicon Valley and Chinese capital coming to Latin America

[12:36] - Why Latin American businesses are becoming so valuable

[15:16] - How the US and Latin America are different from China

[17:34] - How Chinese investment in Latin America is growing exponentially