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Since there are more than 6,000 venture funds in the world, Matt Salloway knows the importance of bringing together a cohesive team of investors and operators with tech expertise and in-market access to help U.S. startups maximize scalable market opportunities in MENA and Asia. He is the co-founder and managing partner of SIP Global Partners, a cross-border venture fund with a presence in New York, Tokyo, Riyadh and Boston. SIP is focused on investing in the next generation of transformative technologies in the U.S. with the goal of helping those technologies grow into Asia — specifically, Japan, ASEAN and the GCC. “We’re investing in the 5G economy, which includes areas like AI, AR, VR, cybersecurity, smart cities, digital media and digital health,” Salloway says.
He and his co-founders Shigeki Saitoh, Justin Turkat and Jeff Smith recently announced their first close of $75 million for the company’s debut fund, aiming to raise $150 million. Most of Salloway and his partners’ focus has been on venture investing and growing technologies into the Middle East from the United States. “We have been investors, but also strategic partners, into the Middle East.”
SIP’s portfolio includes: Fable, a web-based, full-stack motion design tool with co-investors such as Chad Hurley, the co-founder of YouTube; Croquet, an ultra-low latency, collaboration platform incubated out of XEROX Parc and Alan Kay, considered by many as the “Father of the Personal Computer”; Tilt Five, an AR platform set to revolutionize gaming with investors such as Logitech and Bitkraft Ventures; Parallel Wireless, a next-generation O-RAN technology company started by serial unicorn founder Steve Papa and recent winner of the Mobile World Congress for best infrastructure technology; and KINETIC, an industrial IoT technology focused on workplace safety and productivity with co-investors including Primary Ventures and Crosslink Capital.
Salloway sat down with Jessica Abo to share what he looks for before investing in a startup and what entrepreneurs should think about before expanding globally.
Jessica Abo: What trends and markets are you most bullish about and why?
Matt Salloway: 5G is really a once-in-a-generation opportunity, and it’s all the countries in the world working at the same time to achieve 5G implementation. We are seeing not only a massive rollout of the 5G technology, but also a significant economic opportunity. I’m specifically talking about the technologies that are impacted as a result of the infrastructure rollout, such as areas including artificial intelligence, augmented reality, digital health and cybersecurity. We see this implementation as an over $14 trillion global economic opportunity.
In terms of geographic areas, we’re very bullish on Japan and Saudi Arabia. Companies from the U.S. who have expanded into Japan have used it to massively grow their international business. And Japan is often a springboard into the rest of Asia. It’s a great starting point if you have the right connectivity. Saudi Arabia is really becoming what we like to call the Silicon Valley of the Middle East. And the government efforts are helping to support that, putting over a billion dollars into Saudi-based startups. The technology ecosystem is evolving, and we believe that there’s a tremendous opportunity to take technologies from the US into that region.
When it comes to having to choose what startup you’re going to invest in, what do you look for?
I’ve come up with an acronym: MISS. It’s a company I don’t want to miss. “M” stands for management, so we look very deeply at who is running the company. We want to invest in people we believe are able to execute on their vision. So it’s more than just an idea, it’s being able to actually move that forward and execute on it.
“I” stands for integrity, which is really self-explanatory, but we want to work with people we can trust and have the same value systems that we do.
“S” stands for size. We want to be investing in companies that have tremendous global potential in terms of size.
The last “S” stands for sales. We need to make sure that we are investing in companies that have good sales and marketing strategies. Because you can have a really impressive idea, but you may not be able to actually execute on it and get that technology into the marketplace.
What advice do you have for entrepreneurs who are looking to expand globally?
The first thing is they have to understand where they want to expand. Does that marketplace have enough size and relevance to their technology? As investors and managers of the fund, we spend a lot of time trying to understand whether this technology is applicable in markets where we have the capability to grow.
Then you need to partner with the right person. You want to make sure that that person or business has experience growing companies in your space, in your industry. You have to do reference checks. Speaking with other clients they’ve worked with is also important as is sharing the same passion and vision that you have for your companies.
Finally, you want to make sure that there is an alignment of interest so they are compensated in a way that makes them long-term committed to building your company. It’s a long haul, so it’s critical to have the right partner with the right incentives in order to be successful.