Technology has always had a place in GIC’s portfolio since its founding over 40 years ago. In 2017, GIC boosted our capabilities in deploying capital, developing partnerships and deepening our research, by formally setting up the Technology Investment Group (TIG).

The Bridge Forum is an example of these new capabilities. It was created in 2018 to bring together partners in the tech ecosystem and those from the larger GIC network. In May 2023, GIC held its latest flagship Bridge Forum Summit in San Francisco. The event connected incumbent companies with startup founders to exchange exclusive insights, form meaningful collaborations, and develop investment opportunities.

As part of the Summit, GIC CEO Lim Chow Kiat and Head of TIG Chris Emanuel took the opportunity to share more about how GIC invests in tech as a long-term investor and the future of tech.

Tell us more about what sets GIC apart as a long-term investor in the tech industry.

CHOW KIAT: In 1986, or 37 years ago, we started investing in venture capital funds when we set up our San Francisco office. We were in that space earlier than most other institutional investors, which gave GIC a head start in building strong partnerships with leading technology investment managers with long track records. Since then, we have invested through cycles and demonstrated our staying power.

CHRIS: We also have a broad mandate that gives us the flexibility to deploy capital across the private and public space. We have multiple touchpoints with companies and can cover all stages of the financing lifecycle of a company. We have the flexibility to invest early and stick with companies through growth and maturation – we call this “lifecycle investing”. With this approach, we’ve partnered various companies in recent times, such as Zoom and Snowflake, through their growth stages. We supported them with more than just capital, helping them with our network, expertise, and reach too.

CHOW KIAT: I should highlight too that having an on-the-ground presence in tech hubs around the world allows our tech teams to stay on top of emerging tech trends and opportunities, and to build relationships with founders across various markets. They are then able to focus on identifying exceptional founders, good companies, technologies, and business models. Our teams are also diverse with different skillsets in direct and indirect investing across public and private markets.

CHRIS: Today, TIG has teams based in the US, China, and India, with a portfolio of companies spanning enterprise software, fintech, and emerging technologies.

The tech landscape is constantly shifting, with new trends and innovations. How does GIC continue to identify the right tech companies to add to your diversified portfolio?

CHRIS: On the ground, our team’s approach is to understand the fundamentals, rather than placing bets on “the next big thing”. We employ a bottom-up approach which includes conducting extensive due diligence, researching industry trends, and spending time with founders to deeply understand the businesses we invest in. In doing so, we identify founders who have started businesses that we believe can become “iconic companies” with durable business models and are often category-defining. We identify market dislocations and invest in the winners.

Ultimately, when we invest in companies, we look at the people behind them as we believe that great founders build great companies. After investing, we work closely with them to navigate the macro environment and build stronger and more innovative companies. We continue to value-adding, such as through facilitating connections between those in our network and larger community, which is what we’ve done for Razorpay and Grafana Labs.

The tech industry has experienced significant changes over the past year. How does GIC manage this volatility and continue investing in tech with a long-term approach?

CHOW KIAT: GIC constructs a diversified portfolio that is resilient across a broad range of plausible economic conditions and reaps good real returns over the long term. Technology is part of this diversified portfolio; it benefits from the stability provided by the total portfolio. The stability enables us to ride through occasional volatility and focus on finding and adding long-term value.

CHRIS: Within our tech portfolio, we are diversified across sectors and lifecycle stages to achieve good risk-adjusted returns. Our long-term investment style is beneficial to companies in general, but it’s especially beneficial to tech companies who tend to need stable, committed capital more as they grow their business. For instance, because we’ve invested in technology through every market cycle in the US for over four decades, our extensive experience as investors in the tech space transcends the industry evolution seen in the last few years.

CHOW KIAT: The effect of recent macroeconomic trends, such as interest rate hikes, has no doubt been felt across the tech sector too. However, there are still plenty of opportunities that our teams are looking out for, such as in software companies that can scale quickly without expenses rising as much and in the secondary market where others might be looking to exit.

GIC’s flagship platform, Bridge Forum, is most reflective of your partnership strategy. Tell us more about what makes GIC’s partnership approach with founders unique?

CHOW KIAT: Collaborating with like-minded partners is central to GIC’s investment strategy and critical to portfolio company growth. The value proposition we offer in these partnerships, with our stability, determination to remain engaged, and ability to serve as a bridge between Asia, the Americas, and Europe, presents more than just capital to our partners.

CHRIS: To stay updated with the latest developments in the global innovation ecosystem, it is important to have a strong network of trusted partners to exchange insights with. One example of how we do this for our partners is through the Bridge Forum platform we established in 2018 to share GIC’s global network of relationships and insights across the technology landscape. At this year’s Bridge Forum Summit, we brought together GIC’s global network of enterprise software and emerging tech companies together with our global partners for meaningful discussions on the future of tech.

CHOW KIAT: Over the years, Bridge Forum has led to numerous business partnerships that added to companies’ performance and introduced further investment opportunities for participating companies and GIC.

This year’s Bridge Forum Summit was focused on the future of enterprise software and emerging technologies, such as generative AI. How is GIC preparing for the future of technology?

CHOW KIAT: As a long-term investor, we closely monitor how companies and their workforces are evolving, and as a large company with 11 offices globally and investments in over 40 countries, we experience these evolutions firsthand.

CHRIS: We see good growth potential in enterprise software and fintech. Over the years, we have built a significant portfolio of companies in these two categories with unique product offerings, spanning enterprise video communications, data analytics and visualization tools, cloud data platforms, and many more. Looking ahead, in fintech, we are excited about innovation in the distribution of financial products and the underlying infrastructure that enables this. On the software side, tech companies are continuing to change the way businesses operate and there will be further innovations, such as with cloud migration, which we are still in the early days of.

CHRIS: Similar to what we saw in the development of cloud computing, we are also expecting a paradigm shift in software technology, given the developments in AI and as we see a new tech stack emerge in the field of generative AI. We anticipate that this paradigm shift will drive the creation of new tools and infrastructure that will make it easier to build AI applications on top of foundation models. The tooling and infrastructure layer represents a significant opportunity in the near term, as it will drive the development of more applications. Over the long term, it is likely that we may see a few dominant players emerge in the foundational model layer, with some breakout models being developed for specific verticals. On the application side, it is possible that most companies will incorporate AI features, and AI also has the potential to transform how consumers interact with the internet.

CHOW KIAT: The concern of generative AI being developed too quickly is not unwarranted. There are valid concerns about the ethical implications of AI-generated content, such as deepfakes and fake news. There is also a risk of malicious use of AI, such as in cyberattacks. It is up to all of us to work together to ensure that AI is developed and used in a responsible and ethical manner.