This article is part of TechNode Global’s partnership with CEO Roundtable Podcast and Asian Investors Podcast hosted by David Kim wherein we publish edited transcripts from the podcast’s interviews with inspiring entrepreneurs and experienced VCs. This edited Q&A is based on the show’s original transcript. For the full interview, listen to the podcast here.
About Legendary Ventures
Legendary Ventures is a venture capital firm that accelerates value creation for consumer retail technology (CRT) companies. The firm’s funds represent a unique collaboration between venture capitalists and retail executives, including the way it selects portfolio companies, the role it plays in optimizing product development for the consumer markets, and its success in identifying acquisition partners to drive stellar returns for its investors.
About Jayson Kim, General Partner
Jayson Kim is a General Partner at Legendary Ventures, a venture capital firm that invests in companies across the consumer, retail and technology space. Previously, Jayson served in a variety of senior leadership roles at some of the most iconic retail brands in the world, including J.Crew Group, Jones (Nine West) Group, Perry Ellis International, and BCBGMAXAZRIA Group. Jayson is a graduate of Columbia University and a Board Trustee with the Girl Scouts of America.
Tell us a little bit about yourself and your journey to Legendary Ventures.
I’m a New Yorker. After graduating from Columbia University, I started entrepreneurship with a family office-owned and operated direct mail merchandise business that transformed into a clothing catalog business most consumers came to know as J.Crew, the omni-channel retailer. The company was eventually acquired by the private equity firm, Texas Pacific Group, which utilized the transaction to expand into the consumer space.
I spent the next 15 years or so in growth projects, mostly public market businesses leading direct-to-consumer initiatives. After gaining more management experience, I co-founded a venture firm with my partners, Legendary Ventures. Today, we focus on investing in emerging startups across all stages of their business lifecycle in the CRT space.
Tell us about your fund, investment strategy, thesis, sectors, size, and stage.
The firm’s funds are highly opportunistic, investing in the CRT space across all stages of early-stage growth, leveraging the extensive industry knowledge and relationships among the key principals, partners, and investors. Our current Fund is hyper-focused on early-stage venture-class companies.
Generally speaking, we are model, stage, and industry/sector-agnostic since we live in a world where technology is now ubiquitous in our lives. If you asked me what technology meant a decade ago, I would’ve told you it was infrastructure, but today, it’s experience. From this perspective, we like to invest in businesses that have highly disruptive tech-driven products with a clear line of sight to some form of monetization, or commercialization so to speak, in the marketplace.
Tell us about some of your interesting portfolio companies
We’ve invested in some great companies. For example, our portfolio ranges from innovative CPG (“Consumer Packaged Goods”) businesses on one end of the spectrum to disruptive CRT companies on the other, with some digitally native marketplaces in between.
Beyond our later-stage investments such as Fiscal Note or SpaceX, we’ve invested in a number of earlier-stage companies like Gemist and Toybox, both of whom are disrupting their respective industries with transformative tech that bridge the physical-virtual worlds in the post-pandemic era. Our goal is to have a balanced, diversified portfolio of emerging disruptive CRT companies.
Please tell us about your investment in SpaceX, and about Elon Musk.
From an outside perspective, this doesn’t seem like a logical investment ‘fit’ for our fund. On the surface, it’s natural for most people to see SpaceX as primarily a B2B aerospace or aviation business. However, SpaceX as a company is a very diversified conglomerate of businesses.
Along these lines, we saw SpaceX as four companies in one: (1) Starlink (consumer/ISP), (2) Rockets, (3) Starship, and (4) Exploration. Of this set, we invested because of the Starlink Consumer ISP imitative. We believe the opportunity to “wire the rest of the world” was practically achievable short-term given so many competitors have failed to launch telecommunication/satellites in the constellation due to a lack of infrastructure, cost-effectively, and at-scale.
We also believe the other businesses would perform well long-term, complimenting this consumer initiative as they are causally related from a technology perspective. It’s important to note here that most startups take years to reach market scale or financial stability, and SpaceX is no exception. Elon has been building the company since the early 2000s, and he’s really done a great job of delivering transformative tech in very commercially viable ways. From this lens, we believe SpaceX as a whole is a generational-class asset in our fund.
How can a large company achieve synergies with a startup it has acquired?
It’s natural for businesses to become more complex, which requires more time managing them, right? So, it’s very natural that a larger company, or corporate strategic acquisitions–with diversified business units or sales channels–are slower at innovation than startups given their operating footprint, namely employees.
Along these lines, I think it’s important to understand the cultural differences between highly matrixed corporate organizations versus unconventionally flat (or vertically integrated) startup teams. In other words, how do you accommodate ideas that are normally executed in hours or days at startups versus months or years at corporations? From this lens, it’s important to leverage the best of both worlds through some level of understanding.
For example, it’s important that larger companies empower startups to continue to ‘innovate’ at their speed but it’s equally as important for the startups to understand the benefits of lugging through layers of decision making or business processes so they can leverage a much larger infrastructure (e.g., distribution channels) that can get their products to scale, albeit cumbersome or frustrating at times. Like a marriage, it’s all based on the people who can bridge some level of understanding of the cost/benefit on both sides.
How has COVID-19 impacted your investment approach and/or paved the way for new opportunities in the post-pandemic era?
There have been lots of winners and losers from the pandemic. Initially, service sectors such as retail, real estate, hospitality, and travel took the initial blows. But I think it’s interesting the hardest hit industries are now at the forefront of innovation given they were facing existential events.
For example, we think there is a lot of innovation around the travel retail hospitality sectors. IF you examine the airline or hotel industries in particular, they were written off early in the pandemic. From a financial perspective, their market valuations were akin to banking companies during the beginning of the 2008 financial crisis in the public markets. However, and like the banks post-financial crisis, they began to innovate to survive.
From on-demand, subscription-based pricing changes to new business models that support these changes in the ecosystem, what we’re seeing is a re-invention of the old to thrive in the realities of the new margin-conscious marketplace. Today, consumers benefit from a ‘middle-man’-less supply-demand system, where people can buy cheaper airline tickets through competitive travel subscription models, and even avoid baggage fees by renting their clothes on-demand when they arrive at your destination! I think this speaks volumes about how we, as a people, and as a society, collectively, can overcome adversity through innovation. And where this is darkness, we see opportunities.
Do you have any plan to expand and/or invest in Asia?
It’s important for us to evaluate and invest in companies inter-continentally because we live in a globalized marketplace. In this sense, you can probably add ‘borderless’ to our investment strategy/thesis. Lead by our early-stage team, Ryan Shuler and Catherine Rhee, our firm actively participates in deal/flow across EMEA and Asia, and especially emerging retail markets in the Eastern Europe and North/South Asia regions.
For example, we recently invested in Posture360, a Korean-based smart wearable company, with a ‘Smart Shirt’ that tracks, monitors, and analyses physical activities (with real-time bio-feedback) through its SaaS platform to improve people’s posture. Their product helps individuals develop better posture habits through its embedded fabric AI sensors (which collects behavioral data when worn), enabling people to change their posture, which is extraordinarily disruptive and relevant as businesses and consumers shift towards a more passive-aggressive post-pandemic work-life balance.
What does Legendary Ventures plan to do in 2022?
We’ll continue to make investments into founders that represent change. It’s clear the world is changing, and with more people and fewer resources on this planet, we want to do our part in delivering a smarter, sustainable economy to the next-generation of businesses and consumers.
At Legendary, we believe economic development is the primary means to happiness and prosperity. However, and where we differ from our peers, is we believe that a shared economy, including wealth, can only be actualized not only through tech/innovation but also from its distribution and/or use. In other words, what’s so great about creating a sustained food or meal if only certain folks can afford it? Here, it’s important to understand the socio-economic impact of our investments not only on financial terms but also at mass-market scale. We believe there is so much innovation in the market today, there is a venture class of founders, companies, and businesses that can do good, and make money doing it.
David Kim is the founder and Chairman of North Head Capital Partners based in Hong Kong.
David is an experienced CEO, seasoned banker, and global strategy professional with nearly three decades of cross-functional expertise. He worked at eight international companies and banks living in six Asian countries, during which he has successfully closed highly structured investment and financing deals for over 200 companies of various industries totaling more than $4 billion.
Prior to joining North Head, David was acting CEO at Leading Investment and Securities based in Hong Kong and Senior Executive Managing Director at W Bank based in Korea. David also worked as Managing Director and country head of corporate financing group at GE Capital Korea for seven years.
He started his career at Korea Development Bank Capital in Korea and helped to set up multiple Joint Venture non-bank finance companies and banks in emerging markets, including Nepal, Vietnam, and Thailand in the mid-1990s and also worked as CFO for MILC in Thailand. David is also a frequent lecturer at various seminars, MBA, and banks on the topics of M&A. international joint venture, and fundraising.
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