WoW Woman in VC I Lu Zhang, founder and Managing Partner of Fusion Fund

Lu Zhang is the founder and Managing Partner of Fusion Fund. She is a renowned Silicon Valley investor, a serial entrepreneur, and a Stanford Engineering alumna.

Lu is a World Economic Forum - Young Global Leader. She has also garnered other accolades including the Featured Honoree in VC of Forbes 30 Under 30, Silicon Valley Women of Influence, Town & Country 50 Modern Swans – Entrepreneurship Influencer, and was recently selected as the Best 25 Female early-stage Investor by Business Insider (2021).

Prior to starting Fusion Fund, she was the Founder and CEO of a medical device company (acquired in 2013). Lu is a frequent speaker at tech events and conferences such as Davos World Economic Forum, Future Investment Initiative (FII), Forbes, Web Summit, SuperReturn, etc., and serves as a mentor and advisor to several tech innovation programs in Silicon Valley.

Lu is the board member of the Youth Council of Future Forum and Future Science Award. Lu is also on the Jury Board of Cartier’s Young Leader Award. She received her M.S. in Materials Science and Engineering from Stanford University.

Fusion Fund invests in promising start-up companies that have technology barriers in their business models. They invest in many industries including connected industries (robotics, mobility), network technologies (connectivity, security), artificial intelligence (computer vision, NLP), and digital health/medical devices.

Tell us a bit about your background and your projects so far.

I was born and raised in Mongolia. I didn’t think culture shock was real when I moved to the United States – Silicon Valley has been a great place for me and I really feel like I fit in with the culture here.I was a Stanford University student in 2010, and my background in general is very technical. When I was 21 years old, I patented technology for Type II Diabetes diagnostics. In 2012, I started my own business, a medical device company focused on non-invasive technology for the early diagnosis of Type II diabetes. I finished school with a Master’s degree in Materials Science and Engineering.

A couple of years after starting my company, it was acquired by one of the largest medical device companies. I was a solo founder and a majority shareholder when it was sold, and that’s how I got a good financial return on that sale and led me to move into investing. My investing focus is in deep tech and healthcare, led by my own experience and my passion for health tech investment. So rather than launching another company, I decided to launch Fusion Fund to support deep tech in healthcare in 2015. 

In 2017, I was featured on Forbes 30 under 30. In 2018, I was nominated as a World Economic Forum Davos 2018 Young Global Leader and present in Davos regularly. In 2021, I was named Best 25 Female Early Stage Investors by Business Insider. Early this year, Fusion Fund launched a brand new $120 million fund that was oversubscribed.

How did you get into this industry? Has it been an easy industry to get into or have you had many challenges?

I got into this industry from the transition from entrepreneur to the investor. Because of my personal experience, I saw an opportunity with the lack of investors with strong technical, healthcare, and operational backgrounds, as well as the lack of investors with minority and immigrant diverse backgrounds, which results in a great opportunity market being underserved. 

I decided to launch my own VC firm because of this need in the market. With my founder experience, I was able to build a more cost-efficient system across Fusion Fund. When we launched in 2015, I focused on building a strong team and network, and a solid business structure from the start. This is not an easy industry to get into. I was only 25 when I started Fusion Fund, and many people told me I am too young and still comment on my age, asking me how I am so successful at my age. No one else had started a firm this young; the average age of the industry is 45. Deep tech and healthcare have not been a big trend until recently. This is a big topic in the founder community. Lack of attention to the sector has created an opportunity for me to differentiate myself and Fusion Fund.

My background as an entrepreneur has greatly benefitted Fusion Fund’s ongoing success and adds to my credibility as an investor in this arena. I’ve gone through this whole VC funding process with the business I started, so I uniquely understand the process for building a company cost-efficiently in the deep tech and healthcare space. I really understand and empathize with the founder's perspective on the funding process.

 How long did it take you to be where you are now? What was the biggest obstacle? What are the challenges of being in the industry you are in? 

Like most companies, the first two to three years of Fusion Fund were challenging. Fusion Fund tried to use very limited resources in institutional VC. We were like a startup in this way; everyone was wearing different hats and learning to support each other. We also used technology to operate more efficiently by building our own tech and algorithms to help with decision-making. Fusion Fund is creating a lot of training materials internally and adding this to our growing library of available resources for founders.

 Fusion Fund launched its first VC Fellowship program this year and has received more than 400 applicants for 20 positions. This is a way for this organization to give back to the community, so we can share our training materials and other resources with new professionals in the industry who are wanting to learn and grow.

I have experienced a lot of challenges to help Fusion Fund be successful, and now that Fusion Fund is more established, I am excited to turn these challenges into valuable knowledge that can help others who want to follow this path or are looking to learn about VC/startup investing.

 Fusion Fund has written all of our data ourselves since day one, giving us a valuable database of the companies we work with and an internal check to see where we are making mistakes in order to fine-tune strategy. There are a lot of emerging managers who have entrepreneurial backgrounds that are coming in with a different mindset.

 What are your biggest achievements to date?

I’m very proud of my three established flagship funds, one of them being an opportunity fund. I have one of the only VC funds in Fusion Fund III led by a woman focused on deep tech and healthcare.

 I believe the industry does not have enough tech-focused funds for the female market, today it is about technology empowerment and digital transformation. I’m passionate about healthcare and believe it is an underserved market. My team is also one of my greatest accomplishments. I am much younger than the rest of the Fusion Fund team who are more established in their careers, and they are recruiting very established and credible executives who are joining Fusion Fund. Our team is composed of intelligent businesspeople across all levels that have strong technical backgrounds.

Fusion Fund is a female-led firm that is doing well and showing incredible returns, even in a challenging market. I want to show people the innovations in deep-tech and healthcare. Fusion Fund is ahead of the curve and is always completing industry reviews, like the female healthcare report. We plan to share more knowledge like this in the future to continue showing that Fusion Fund is an opinion leader in our industry and promote the vision we believe in.

 What are the projects you are currently working on?

Fusion Fund just announced our third fund,  announced Fusion Fund III – a $120M fund that was oversubscribed, looking to invest in early-stage founders with technical backgrounds.

 Fusion Fund has built a strong network of executives, CXO Network, who have integrated technology and work with early-stage founders. It was launched in 2018 and is now headed by Shane Wall as president.

  • VC Fellowship program

  • Cartier Woman Initiative – an award that empowers female entrepreneurs; a committee member for corporate board How Women Lead; promoting more females to join private and public company board seats; get more women in the boardroom.

 Is the #WomenInTech movement important to you and if yes, why? 

The #WomenInTech movement is very important to me and I believe diversity can improve business results. I’m especially passionate about female healthcare and tech; less than 15% of funding is attributed here, but more than 50% of the population is female. Women have many healthcare considerations and there’s not a lot of funding dedicated to these areas.

 The industry does not need to invent new technology; it needs founders to focus on the female-focused application of this tech. It needs more female founders who are willing to create applications for this. Women need to understand tech because they will all be using wearable devices in the future. 

The data the industry generates every single day will be the most valuable asset. They need to understand how to use, protect, and monetize the available data.

In order to better empower female leaders, they need to equip themselves with technology. More women in the boardroom will change them, from the rule breakers to the rule makers.

What will be the key trends in your industry in the next five years and where do you see them heading?

  • Digital transformation for all industries. The traditional sector has AI and sensor technology, this will drive the whole industry with digital transformation.

  • How we better use and protect our data is important; privacy and security are paramount. The industry needs better protections for data transfer, like with edge computing.

  • Aging population – Due to my own experiences, I focus on diagnostic healthcare applications, which can help with early detection and early prevention to help with treatment. This also helps with mental disease treatment; early diagnosis and prevention.

 What is the most important piece of advice you could give to anyone who wants to start a career in this industry?

I’d advise women to find a strong differentiation to start their own fund and to understand what VC can do for you specifically, it is not all about financial return. Create a fortune and change the world. It can be an amazing and overwhelming industry. You need to understand how this will impact you and be committed to it.

Who are three inspirational women in your respective industry you admire?

Find out more about the Fusion Fund on their website.

Follow Fusion Fund on LinkedIn.

Connect with Lu on Linkedin.

This interview was conducted by Marija Butkovic, Digital Marketing and PR strategist, founder, and CEO of Women of Wearables. She regularly writes and speaks on topics of wearable tech, fashion tech, IoT, entrepreneurship, and diversity. Follow Marija on Twitter @MarijaButkovic and read her stories for Forbes here.

Wearable Tech, AR & VR, Health TechMarija Butkovic