Last month Jeff Chen joined Chinese online healthcare firm WeDoctor as its chief strategy officer after 14 years in banking. But coming on board wasn’t an easy decision for Chen, who was previously head of technology investment banking for Asia Pacific at HSBC. “I took a few weeks to think about the job, which is sensible when you’re making a big career change,” says Chen. “If I had an offer from another bank, it would have been an easy yes or no.”
Hong Kong-based Chen is the latest senior banker to shift to a Chinese technology company, in a trend that began to gather pace about two years ago. Alibaba, for example, appointed 20-year Goldman veteran Michael Evans as its president in 2015, and a year later named another ex-Goldmanite, Douglas Feagin, as head of international business for its online finance arm, Ant Financial Services.
“I think more bankers in Asia will make these moves, including juniors. Tech companies offer interesting work, pay competitive base salaries, and there’s more potential upside at a senior level if the company performs,” adds Chen.
While Chen has only been in his role for a matter of weeks, he’s already drawing positive comparisons with investment banking. “When you’re in-house, you think more strategically and long term. Completing a transaction is only the first step, you then need to work on successful implementation and integration,” he explains. “Your role is advisory at a bank, so once a deal closes, you move on to the next one.”
Chen says bankers should not to jump at any opportunity within China’s burgeoning online sector. “If my job offer had come from just another e-commerce company, I probably wouldn’t have been so keen. But we’re doing something worthwhile: we’re trying to improve the Chinese healthcare system, which has many pain points, leading to significant inefficiency for both doctors and patients.”
Working for WeDoctor, whose investors include Tencent and which was reported to be valued at $1.5bn after it completed a $394m funding round in 2015, also gives Chen the opportunity to “help shape the future of the whole business rather than work project to project like you do in banking”.
The company, which was founded in 2010 and provides online consultations, diagnosis and appointment booking, is now looking to raise about $500m in private funding ahead of its likely IPO next year. “My job involves looking after capital market activities, strategic cooperation and investment, M&A and international expansion,” says Chen. “Currently, an important focus for me is to craft our market positioning so it’s clear for investors to understand our business and competitive strengths.”
Despite his recent move away from technology investment banking, Chen recommends it as a career. “Technology is the best sector to cover in Asia as there are constantly new companies and concepts being developed, which provide you with new clients and keep the work interesting. It’s also the only industry where companies can go from zero to multi-billion dollar valuations in only few short years.”
While Chen did some technology work when he was an analyst at Credit Suisse in Hong Kong in 2004, he moved into the sector full-time in 2011, at the same bank. His stand-out deals at Credit Suisse include Lenovo’s acquisition of Motorola from Google in 2014 and ASE’s takeover of rival Taiwanese semiconductor firm SPIL, which was approved last year. “Most TMT bankers in Asia focus on China internet IPOs. But I was also doing M&As deals for about 40% of the time, and I worked across Asia Pacific, not just China,” he says. “This gave me a more holistic view of the market, which is helpful in my new role.”
Chen left Credit Suisse for HSBC in December 2016. “As TMT, especially technology, continued to be the most active sector in Asian capital markets, HSBC senior management decided to develop a team to focus on technology sector coverage,” he says. “HSBC had been interviewing standard China technology bankers for the role and hadn’t found the right fit. They were bankers who’d been focusing on taking Chinese internet companies public in the US, which doesn’t play to HSBC’s strength of leveraging its balance sheet and global network.”
“My suggestion to them was that HSBC shouldn’t just focus on internet IPOs. It should start off by growing revenues via traditional technology, such as semiconductors and hardware, and do M&A advisory where it can add value by also providing acquisition financing,” he adds.
Chen built a five-strong team at HSBC, which worked on deals including the Hong Kong IPO of Tencent’s online publishing arm China Literature, which saw its shares surge more than 80% in their debut in November.