From “Copper Wires” to “Green Gold:” The Double E Investment Strategy of the Ta Ya Group【Meet Report】

From “Copper Wires” to “Green Gold:” The Double E Investment Strategy of the Ta Ya Group

Reported by Tseng Ling-Huai on February 21, 2023

▲(Image Source: Provided by BUSINESSNEXT/Photo by Hou Chun-Wei) (https://reurl.cc/lZq2Aj)

       “Warren Buffett once said that a mature industry does not mean there is no room for growth. While the Ta Ya Group has maintained steady growth, we also need to identify the emerging industries and establish connections to embark on our second growth curve,” said Shen Shang-Hung, Chairman of the Ta Ya Group (1st image).

       Just as Intel shifted its focus to microprocessors in the 1980s, the establishment of the Ta Ya Group in 1955 is now undergoing a similar transformative phase. With its core business in electric cables and wires, the Ta Ya Group encompasses a wide range of products, from high-voltage cables to enameled wire coils in electric scooters and headphones. Despite achieving a revenue of nearly NT$27 billion in 2022, Ta Ya is still in pursuit of the next wave of growth momentum.

       Corporate investment is a means to explore innovation and the second growth curve. In order to envision the “emerging industries outside,” Ta Ya established Ta Ya Venture Capital as early as 1998, focusing on “Double E investment” — not the Double E of Electrical Engineering, but Energy and Emerging innovative industries.

Embracing a Paradigm Shift: Unveiling the “Green Gold” of Growth Beyond “Copper Wires”

       In 1998, Ta Ya consciously embraced investment as an innovative approach, establishing Ta Ya Venture Capital with Shen Shang-Hung assuming the role of Chairman. “However, at that time, our investments were not limited to startups; we also invested in many mature enterprises,” stated Shen. Initially, Ta Ya leveraged its core business of copper wire materials as a foundation for application diversification and expansion. This included ventures such as copper powder and spheres for printed circuit boards, as well as the design and production of metal phone casings. Nevertheless, these endeavors remained closely connected to the periphery of wire and cable, copper materials and enameled wire businesses. The challenge of creating innovative ventures and charting a new course for Ta Ya became a pivotal agenda in the 2010s. Consequently, top executives from key departments within the company frequently convened to deliberate upon this matter.

       “What is the essence of wire and cable? Power transmission. What is the essence of enameled wire? Energy conversion.” The essence Shen speaks of represents the core value that Ta Ya has provided to the market for several decades — energy. “From this perspective, energy emerges as our new frontier, encompassing opportunities in generation, conversion, transmission, storage and management.”

▲Shen Shang-Hung, Chairman of the Ta Ya Group, expressed that electric wire and cable, along with enameled wire, fundamentally embody the essence of energy. (Image Source: Provided by BUSINESSNEXT/Photo by Hou Chun-Wei)

Ta Ya's Energy Investment Radar Reaches Beyond Electric Vehicles to Space Motors

       In recent years, Ta Ya, with its focus on the energy sector, has not only invested in solar power plants but also kept a keen eye on the dynamics of energy startups. Shen cited examples such as Ta Ya Venture Capital’s investments in smart energy company NextDrive and Tensor Tech, which specializes in spherical motors and focuses on the space industry.

       The realm of space that Tensor Tech belongs to may seem somewhat distant from Ta Ya’s focus on energy. Regarding this, Shen expressed that motors are involved in the conversion of kinetic energy, electrical energy, light energy, sound energy and more, making them part of the realm of energy transformation. Therefore, they fall within the scope of Ta Ya’s investments. Furthermore, even the demand for motors in electric vehicles can be a target for Ta Ya’s investments and the demand for enameled wires in motors has always been a core business for Ta Ya.

       How can one distinguish between emerging technologies and startup companies? Shen emphasizes that when it comes to teams in their early stages, personal traits play an increasingly vital role.

       “Our investment strategy revolves around assessing both the ventures and the individuals behind them. Why are you pursuing this endeavor? What value does it offer? What problems can it solve? How does your solution outshine others? These inquiries are part of the due diligence process when evaluating the venture. As for personal traits, they encompass leadership abilities, adaptability to rapidly changing environments, effective communication skills and, most importantly in my opinion, perseverance and determination, as entrepreneurship is rarely a smooth sailing journey.”

▲Shen Shang-Hung, Chairman of Ta Ya Group, acknowledges the strong determination exhibited by the founding team of Tensor Tech. Pictured are Yen Po-Hsun, Lee Shang-Jung, Hou Sung-Liang, and Hsieh Hsun-Cheng. (Image source: Tensor Technology)

       Shen cites Tensor Tech as an example, highlighting the growing trend in the satellite and space industry. The company possesses a competitive edge in terms of its technological capabilities, satisfying the criteria of “due diligence.” However, what truly convinced Shen to invest was the unwavering perseverance and determination demonstrated by Tensor’s founders. “Despite their youth, they exhibit remarkable pro-activity and resoluteness, surpassing expectations not only in technical expertise but also in their astute business acumen.”

Embracing Early: Preparing for the Next Wave of Trends

       In addition to companies like Tensor Technology and NextDrive, which fall within the realm of energy, Ta Ya’s investment portfolio also includes startups such as Calyx, focusing on IoT technology, iStaging, offering virtual reality services and TXOne Networks, operating in the field of cybersecurity.

       This is closely related to Ta Ya’s move into energy investment in 2014. Shen said that as the pace of change accelerates with the times, businesses cannot afford to wait until a crisis occurs before taking action. Instead, they must be proactive and prepared for the future. That’s why Ta Ya has taken early steps to establish its presence in various fields. Taking cybersecurity as an example, with the surge of remote work brought about by the pandemic, data and network security have become increasingly critical for businesses. This is the rationale behind Ta Ya’s investment in TXOne Networks.

       Shen acknowledges that assessing cross-disciplinary investments is currently a challenge for Ta Ya Venture Capital. However, if a new technology has already become an inevitable trend, it is necessary to view risks from different perspectives. “In venture capital, we evaluate whether or not the risks and rewards are proportional, rather than solely focusing on the magnitude of risks,” Shen explained. High risks and high returns have always been fundamental in the venture capital industry, even for Ta Ya, which has been established for nearly 70 years.

Original Source: Meet ( https://meet.bnext.com.tw/articles/view/50015 )