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Lucy Tan
Portrait of Lucy Tan
Photo taken by Abby Shen
Interviewed in March 2023

Lucy is a proud Chinese-Australian who was born in China and grew up in Sydney, Australia. Currently, Lucy is a Principal at Square Peg, a venture capital firm on a mission to empower exceptional founders in Australia, New Zealand, South-east Asia and Israel. As an investor, she has a particular passion in ed-tech/future of work and fintech.

Prior to Square Peg, Lucy worked at Bain as a management consultant in the financial services practice, and at Go1 (Aussie ed-tech unicorn) during their Series B stage to scale up their partnerships channel. She started her career in 2014 as a corporate lawyer with King & Wood Mallesons.
I think it’s safe to say that a common experience a lot of Asian Australians share, is understanding and believing in the importance of education. Asian cultures and parents highly value education, and believe that getting a good education is a key, and oftentimes in a tunnel visioned way - the only key to success.

This value of education has definitely been imparted on me, and as a result I’ve always been interested in education reform, whether through policy or innovation; especially in light of Australia’s declining education system on the world stage. As I became more interested in ed-tech and did more research into the Australian startup ecosystem, I would hear Lucy’s name a lot, as a leading VC passionate in ed-tech and its wider societal implications. I wanted to interview Lucy to hear how she’s navigating this space as an investor, and also showcase her impressive story as a POC female investor, given that the investments and VC space is traditionally not the most diverse.

I hope Lucy’s story inspires you as much as it did, me.
Why are you most interested in the ed-tech space?
A lot of my interest in the education space comes from personal experience and instilled values. There were three key moments that I observed in my parents’ lives and my own which led me to hold the belief that education can be an incredibly important lever for social and economic mobility:

1. My dad choosing to learn English while working in China back in the early 90s. He was in mining engineering at the time so when his company wanted to send some representatives to Perth, one of the criteria was ‘who here can speak English’? Back then, it wasn’t a common skill in China so it gave him the opportunity to come to Australia for the first time.

2. Once dad and mum had decided to immigrate to Australia, dad figured out one way he could do that was to find a sponsor lecturer at UNSW under whom he could do his PhD. He’s a huge nerd so naturally this was the path he chose. That gave us the opportunity to build a life in Sydney. 

3. I struggled in my early years of schooling - I remember doing so poorly in a seventh grade grammar test that I got allocated to a ‘English as a second language’ class. But being surrounded by kids who were really motivated and smart at that age made me realise ‘wow I better get my shit together’. That old saying - ‘you’re the average of five of your friends’ - rings true. If everyone around me at Sydney Girls had ambition and work ethic, it naturally rubbed off on me and led me to all the subsequent opportunities I had in my career.  

Thematically then, edtech became a sector I always wanted to be close to in life. The reality is there are still a lot of barriers to great education (e.g. price point, location, teacher resources and time). It’s hard to scale a great learning experience but technology is so clearly an enabler that I want to be able to find founders who share the passion and have the capabilities to bring great education to the masses. 
How do you think technology can meaningfully transform the education sector?
I won’t repeat my investment thesis here as I risk boring everyone but for those who are interested, I’ve written two articles around it:

1. Ed-techs haven't transformed the world...yet
2. Thoughts on ed-tech - co-written with my Square Peg colleague James Tynan who worked for many years at Khan Academy

What is one of your favourite companies that you or Square Peg has invested in and why?
I won’t choose one of my own because it’s like playing favourites with your own children - can’t be doing that haha! 

But out of the companies my Square Peg colleagues have invested in, one of my favourites is Neara. Neara is software sold primarily to utility providers, which models their critical infrastructure from powerlines to phone towers to underground cables. This enables utility providers to drastically improve their ability to maintain those assets and respond swiftly in disaster situations. Recently, they helped Essential Energy to unlock double the network capacity in NSW’s energy grid with their AI-enabled 3D models. That’s the kind of game changing, inspiring stuff that gets me excited!      
Do you see many diverse founders in the ANZ startup ecosystem? How do you think we can improve this situation?
I actually do have stats for this! From a gender perspective, about 30.2% of my meetings with founders are with women founders. That’s a far cry from parity and the funding gap is still enormous - I write a more detailed view on the drivers of that and what can be done in this article ‘Why VC funding for women has been dismal and what we can do about it.’

From race and other dimensions of diversity, I don’t have great visibility into the stats but my sense is it’s even more dire. Top of funnel is a big issue - who are the universe of people that are choosing to become founders in Australia and New Zealand? How do we boost that up in terms of diversity? The probability of success in any chosen field relies on having great peers, wider networks and role models to aspire to. Until we move those systemic needles, it will require a conscious effort from VCs to proactively find and invest in those diverse founders - some great examples of this are LaunchVic’s Alice Anderson Fund and the investors at Scale.

You meet a whole range of individuals and founders as a part of Square Peg. What advice would you give to people who are thinking about starting something (not necessarily a start up), but are unsure?
Don’t be scared to do the unscalable things at the start. True insight comes from spending time really getting to know the users you are trying to serve. If your sole focus is to solve a deep-seated, burning problem for someone (and that problem is generalisable enough to a big audience) - you will get somewhere.

A great startup story I come back to is the early days of Melio Payments (an Israeli startup last valued at $4B). The founding team wanted to solve accounts payable for small to medium businesses (“SMBs”) who didn’t have a finance function - typically it’s the owner-operator who had to manage cashflow and payments. To understand the needs of that group, they hired a bookkeeper to manually do payments for SMBs over Whatsapp. That unscalable exercise gave them the insights to build an incredibly scalable payment solution. You can listen to the CEO of Melio talk about it here but the gist is: they learnt more about the workflows of that target user from using the bookkeeper than they ever could have from surveys or questionnaires.
on culture and identity
What has your relationship with your Asian Australian identity been like, and how has it evolved?
My level of consciousness of it waxes and wanes over time. At Sydney Girls, quite a large proportion of my peers were also Asian and similarly at UNSW. In that context, you don’t really notice it as much because most of your peers look like you. 

But entering into the workforce first through UBS, then Mallesons and Bain - it definitely becomes something you are conscious of. When I looked up (in all those settings), I didn’t really see a lot of Asian leaders. The few that I did see I immediately sought to make my lifelong mentors because naturally, people are seeking role models that give them the comfort ‘hey if they can do it, I can do it’.

I also felt a bigger sense of responsibility as I moved up in the ranks myself to be a good role model. Bain has this high velocity feedback culture (we basically got feedback every fortnight, or even every week) and I remember early on making the decision that I didn’t want to be boxed in with the typical feedback young Asian women can get around ‘not speaking up in meetings’ or ‘not having gravitas in client situations’. That chip on the shoulder meant that I always wanted to come into meetings prepared to the nines in terms of the insight or expertise I was going to share. Even if people didn’t want to listen to me because of the way I looked, I thought they would have to listen if I actually knew my shit inside out.

The issue with having that mentality for a long time is it can be exhausting. If you always have to be more prepared than anyone else, guess what? You’re also working longer hours and stressing a lot! 

What I have learnt to appreciate in my 30s now is an increasing sense of comfort with my own identity, the value I can bring and how to choose a workplace culture that shares my values (collaboration, transparency, high degree of ownership). At Square Peg, we tell founders all the time - hey you should perform due diligence on us too, it shouldn’t be one way. You need to know that you want to work with us and have us in your corner so talk to the founders in our portfolio about their experience. I feel the same way about a career - always do your due diligence on the employer and choose based on people, culture and values rather than things that have limited impact on your day to day happiness like ‘hey they build a cool product’ or ‘wow this salary is huge’.
What is your favourite food from your culture?
Dumplings. The real oily pan-fried kind with thicker dumpling skin (that’s the way they do it in northern China where I’m from and it’s how my mum makes it). Don’t get me wrong - I love a good har gow at yumcha too but thick skinned dumplings are my comfort food.  
Who is an Asian Australian that inspires you, and why?
Kim Teo - she’s the CEO and co-founder of Mr. Yum. She’s just a badass! I remember meeting her very late into her Series A process and just being blown away by her self-assurance, her command of the whole fundraising process and overall hustle (she was in London at the time for work and was taking the call with me at some ungodly hour in her time zone).

She’ll be the first to tell you that the journey of Mr. Yum up to the point of raising a record-breaking $89m Series A round hadn’t been all smooth sailing. There were many years of trying to find product-market fit and then COVID lockdowns shutting down a good proportion of their target customers (restaurants, bars). When you just read the news headlines, you only see the successful outcome but when you dig deeper, you can see true grit and resilience shine through in her journey.

I’m really excited to follow what she does over the next decade - no doubt she’ll keep kicking goals.