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.

Albert Chen; Source: Judy Lin

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.

Lau shared a notable example from his experience raising a Series B round for Wattpad. During the process, Vinod Khosla, one of the most renowned venture capitalists globally, flew to Toronto to discuss investing in Wattpad. Khosla suggested that Lau move the company to San Francisco to achieve greater success. Lau disagreed, explaining that relocating Wattpad would mean competing with tech giants like Apple and Google for talent, leaving him with less qualified engineers. By staying in Toronto, Lau ensured access to the best local engineers, which ultimately contributed to Wattpad's growth and success.

This mindset ties into Taiwan’s current position on the global stage. Taiwan now finds itself in the spotlight, gaining confidence in its role as a leader in innovation and technology. Success for Taiwan requires strategic investments and collaboration among stakeholders.

Canada’s interest in partnering with Taiwan reflects this collaborative spirit, as do similar efforts from Europe. This moment presents an exceptional opportunity for investors, who must act early to capitalize on emerging trends rather than waiting for them to peak. By investing ahead of the curve, stakeholders can position themselves at the forefront of innovation—a key reason why TSF is actively engaging with Taiwan today.

What’s on TSFV’s Radar Screen?

TSF’s portfolio includes 59 companies spanning various sectors, with Blumind, ABR, Zinite, and Hepzibah standing out as prime examples of its focus on the intersection of software and hardware. These semiconductor startups embody TSFV’s commitment to investing in transformative technologies that blend innovation across disciplines to drive meaningful progress.

Chen explained that TSF is actively investing in robotics due to the synergistic relationship between robotics and AI. These two technologies complement each other perfectly, with robotics providing physical capabilities and AI enabling machines to learn, adapt, and make decisions autonomously. Together, they are transforming industries such as healthcare, logistics, manufacturing, and beyond.

In addition to robotics and AI, quantum computing is also on TSF's radar. Canada has been a pioneer in quantum research, with institutions like the Perimeter Institute in Waterloo leading the charge. Waterloo is often referred to as "Quantum Valley," akin to Silicon Valley in California, due to its concentration of world-class quantum physicists and research facilities. Quebec and Toronto also boast thriving ecosystems for commercial quantum computing development. TSF has been actively investing in this space, with Allen Lau mentoring startups working on quantum technologies.

While quantum computing may not yet directly tie into Taiwan’s ecosystem, TSF sees Taiwan playing a significant role in the next five to ten years as these technologies mature. Many of TSF’s portfolio companies, especially those focused on AI and semiconductors, have already established operations in Taiwan and are beginning to scale. TSF is committed to encouraging more of its portfolio companies to expand into Taiwan, leveraging its robust supply chain and collaborative spirit, said Chen.

Taiwan’s growing prominence on the global stage makes it an ideal partner for innovation. With increasing confidence and strategic investments, Taiwan is attracting attention from international investors. “We believe that early-stage investments are critical; waiting until the hype peaks would be too late. By acting 3-4 years in advance, TSF aims to position itself ahead of emerging trends while fostering collaboration between Canada and Taiwan for mutual success,” said Chen.