Canadian Early-Stage Venture TSF Leverages Taiwan to Make Big Splash in Deep Tech Investments

TSF partners Albert Chen (L) and Allen Lau (M) interviewed by Tina Cheng, a Cherubic Ventures partner at Founders Fiesta in Taipei. Source: Allen Lau

Having successfully closed its third fund at US$30 million, Two Small Fish Ventures (TSF), a Toronto-based early-stage venture capital firm, is expanding its reach into Taiwan. The firm's partners recently visited Taipei to forge strategic partnerships with local supply chains and corporate ventures, signaling their intent to invest in a new wave of transformative tech startups.

Albert Chen, Venture Partner at TSF, outlined a three-fold strategy during an exclusive interview with TechSoda. The firm aims to invest in Taiwanese startups, attract capital from Taiwanese investors, and leverage Taiwan's robust supply chain to support the success of its portfolio companies. "Everything we touch these days—hardware companies working on semiconductors, neuromorphic systems, AI chips—requires Taiwan's supply chain for success," Chen emphasized.

TSF's investment focus is to back the next frontier of computing and its applications by investing in early-stage deep-tech startups, particularly those at the intersection of hardware and software. Chen explained that as these companies grow, Taiwanese institutional investors stand to benefit by participating in later-stage funding rounds or investing directly in TSF’s funds. This approach fosters a mutually beneficial ecosystem where innovation and capital flow seamlessly between Canada and Taiwan.

During their visit, TSF engaged with top corporate venture capitalists in Taiwan, finding alignment in identifying promising early-stage companies. Chen noted the challenges corporate VCs face in discovering startups abroad, especially in less accessible Canadian cities. TSF’s expertise in scouting and nurturing such companies offers a valuable solution to bridge this gap.

Reflecting on the recent AI investment frenzy, Chen described how TSF shifted its focus toward meaningful applications of deep tech. "Two or three years ago, many of the ‘shallow tech’ AI investment opportunities in the market became less defensible and less attractive," he said. “Many of those ventures would fail to deliver value. TSF evolved its thesis that centered on defensible technologies that combine hardware and software to create transformative benefits for humanity." This disciplined approach underscores the firm's commitment to impactful innovation over hype-driven trends.

Big Fish in Small Pond

Although TSF may not yet be widely recognized in Taiwan, the Toronto-based venture capital firm is far from being a "small fish" in Canada. Co-founded by Eva Lau and her husband Allen Lau, the firm has established itself as a key player in early-stage tech investments. Allen previously co-founded Wattpad, a global platform for original fiction reading and writing, which grew into a major success with 100 million users and was eventually acquired for US$660 million. TSF now manages three funds backed by investors and family offices from North America, Europe, and Asia.

Allen Lau brings a background in electrical engineering, while Eva Lau, also an engineer, worked at ATI (now AMD) and Wattpad before transitioning to venture capital. The firm’s technical expertise is further bolstered by Brandon Zhao, TSF’s partner and founding data scientist at Wattpad. Zhao played a pivotal role in transforming Wattpad into an AI-driven platform capable of supporting millions of users in more than 50 languages. His work helped propel the platform into global prominence, with many novels originating on Wattpad later adapted into blockbuster films.

Albert Chen, TSF’s Venture Partner, adds another layer of deep-tech expertise to the firm. Born in Taiwan and raised in Canada, Chen earned his Ph.D. in BioMEMS Engineering from the University of Waterloo and served as CTO at robotics and edge AI company Forcen before joining TSF earlier this year. Invited by his university classmate Brandon Zhao, Chen brings specialized knowledge in robotics and semiconductors to the team. “With his expertise in robotics and semiconductors, Albert bridges the gap for our deep-tech investments,” Allen Lau remarked.

When asked about the differences between Canada and the United States in a founders’ gathering in Taipei, Chen said Canada has often been perceived as the underdog, with less funding available compared to its southern neighbor. “However, the talent in Canada is not less, they are equally strong,” said Chen. Among Canadian founders and investors, there is a shared understanding that external help will not come unless they take initiative themselves. They recognize their responsibility to drive change and shape their own destiny. Allen Lau emphasized this sentiment, stating that Taiwanese, like Canadians, must view themselves as "big fish in a small pond" to succeed.

Read the rest of the article at: https://techsoda.substack.com/p/canadian-early-stage-venture-tsf