From Accelerator to Venture Capital Fund: Betatron’s History

Today Betatron Venture Group is an established early-stage fund investing in exit-focused, B2B companies from Hong Kong and Singapore. The fund leads most of the rounds it participates in, has multiple exits under its belt, and has achieved top-tier returns for investors. It’s run by managing partners Matthias Knobloch and Arshad Chowdhury. 

The first cohort launched in 2017.

No overnight success, Betatron started as a Hong Kong-focused accelerator in 2016. What follows is the story of the accelerator’s step-by-step, near decade-long evolution.

Founding the Accelerator

Rafal Czerniawski originally conceived of Betatron to support the HK ecosystem.

The accelerator was conceptualized by Rafal Czerniawski, a serial entrepreneur himself and founder of IC Studio. By then IC Studio had helped many Hong Kong startups build their first products in its capacity as a tech development shop. IC Studio partnered with local venture capital firms and investors in the startup space - Mindworks Ventures, Vectr Ventures, Cocoon Ignite Ventures and The Aria Group - to fund Betatron’s first cohorts.

By 2017 the first cohort was selected. The accelerator’s mission was to generate more successful Hong Kong-based startups. Local companies comprised early cohorts. Initial funding per company was capped at USD 30,000 each, generally made through a SAFE note. 

Theranos whistleblower Erika Cheung was Betatron's first Program Director.

The founding team included the first program director, Erika Cheung. Erika Cheung had previously worked at Theranos, where she discovered and reported serious ethical violations. As the primary whistleblower in the case against Theranos, her testimony was directly responsible for the company’s eventual shut down and criminal charges against its founders.

Enter Matthias Knobloch

Shortly after the program was up and running, the founders saw the need to bring in full-time management. They tapped Matthias Knobloch, an avid investor who had built his reputation as an executive and a deal maker while leading the Asia Debt Syndicate desk at HSBC. 

Matthias drove the accelerator to invest more in each cohort, to widen its reach to include startups from beyond Hong Kong, and to dramatically increase the number of startups applying to the program. 

In its second year, Betatron was ranked #1 accelerator in Hong Kong and #2 across Asia in the PitchDeck Asia Survey, which included 16,000 Linkedin votes.

Revealing Betatron’s Superpowers

Thanks to efforts by early marketing manager Sam Ameen and deal sourcing hacker Mitchell Suen, inbound interest in Betatron steadily grew. Betatron’s no-holds barred, deeply technical approach to sourcing brought increasing numbers of applicants and helped spread Betatron’s name across the region. 

Operationally, Betaron was building skills at helping companies with sales and subsequent funding rounds. The three-month program was led by Michael Wojcieszek and culminated in a popular demo day held at the Hong Kong Stock Exchange and moderated by Michael.

Betatron’s demo days were well attended and held at the HK Stock Exchange.

Deal sourcing became a major strength.

Enter Arshad Chowdhury

Arshad Chowdhury moved to Hong Kong from New York after two decades of building, operating, investing in and exiting startups. Looking to launch his own fund, he met the Betatron team and started helping evaluate startups shortly after Matthias joined. 

One day became three days, and three became full time. Arshad and Matthias together saw Betatron’s greater potential. Betatron would deliver better returns as a venture capital firm, but would have the benefit of launching with a team, a name, track record, and the ability to source deals. Together, the two charted a path towards building a fund. 

Intentional Incremental Growth and Learning

With each successive cohort the accelerator selected more advanced companies, invested more, and invested across a wider geography. Over three years the investment into each company grew from $30,000 to as high as $500,000. 

2021: The Pivot

Betatron’s 2020-2021 cohort would be its 6th and last. The accelerator had made 45 investments out of three separate micro funds. The program officially ended as Matthias and Arshad started the process of building a VC fund. This process required new money, a new entity, new ownership structure, SFC licensing, and new agreements. 

With the support of the original five founding investors, Betatron Venture Group was born. The five founding investors would retain partial ownership of 20% of Betatron Venture Group while Matthias and Arshad, now GPs of the new fund, would split the rest. The founders would serve as an external advisory board. 

2022: The First Closing

Betatron announced the first closing of its first GP/LP structured fund in May 2022. The team struggled with how to brand this fund. While Matthias and Arshad were first time GPs, they had overseen three past micro funds which had invested into 45 companies. Many investors from previous funds joined the first closing of the new VC fund. 

Considering this history, the first fund was named Fund IV. 

By mid May 2022, Matthias and Arshad had raised enough capital to declare its first close of $15 million. 

Lessons Learned and Applied

After making 45 investments across many regions, business models and types of founders, and having evaluated thousands more (6,000 by the time the fund was launched), Arshad, Matthias and the team had built a thesis around what worked and did not in Asia.

These lessons shape the fund’s strategy today. The most likely strategy to see investor returns in Asia is to invest in geographies where acquisitions happen - Singapore and Hong Kong - invest in industries where consolidation is happening - manufacturing, logistics and construction tech -  and invest in founders who are themselves exit-focused, running companies with acquirable technology. 

ITVF Leverage Scheme

After an almost two-year long tendering process, Betatron was selected as one of a small group of Hong Kong Innovation and Technology Venture Fund (ITVF) partners. This scheme acts as a powerful leverage, matching each Betatron investment into portfolio companies by 50%, and giving Betatron the option to buy back ITVF’s original investments at cost, thus sharing the upside with LPs. 

Betatron Today

With Matthias and Arshad at the helm, Betatron today retains key members such as Nathaniel Chan (with Betatron since early 2019) as well as all of the founding members now on the advisory board. The fund has retained its strength in deal sourcing and in tracking founders over time, but is now known for its in-depth diligence process and its post investment support. 

In July 2023, Arshad moved his family to Singapore to grow the fund’s presence and operations there. Today Betatron’s team and investments are split between these two cities. 

Getting Recognized

Always founder-focused, a core metric remains to be the most helpful investor on the cap table. In 2024 TechInAsia surveyed 900 founders from across the region asking them to rate their investors. Betatron was proud of the result.