China VC firm Banyan closes $100m co-investment fund
Chinese venture capital firm Banyan Capital has closed its latest co-investment fund at $100 million, having spent just one month in the market.
The fund will make follow-on investments in existing portfolio companies from its debut US dollar-denominated fund, which closed at $206 million in January last year, the VC firm said on its website.
The co-investment vehicle comes three month after the VC firm reached a final close on its second US dollar fund at $362 million. The vehicle was substantially oversubscribed with demand reaching $500 million and re-upped from most existing LPs.
Banyan was founded by Zhen Zhang, Xiang Gao and Bin Yue who focused on tech, media and telecom (TMT) investments for IDG Capital Partners. Zhang and Gao, who were both partners at the firm, have been working together for about 10 years. Yue also previously worked at advisory firm China Renaissance Capital.
Banyan typically focuses on seed and growth investments in TMT sector. Its first fund has backed more than 20 companies, mostly in Series A rounds. Gao previously told AVCJ that Series A rounds remain the primary focus of Fund II, but the firm plans on participating in more Series B investments.
In addition to the US dollar funds, Banyan raised a RMB320 million ($51 million) renminbi fund in January of this year, which invests in seed stage start-ups that plan to list domestically.
Several Chinese VC firms have raised top-up funds as certain Chinese technology companies are raising ever-larger private rounds at ever-higher valuations. Last month, Qiming Venture Partners raised $75 million annex vehicle on top of its third US dollar fund for follow-on investments in existing portfolios.
An annex vehicle is distinct from an opportunity fund, which is usually raised in parallel with or shortly after the main fund, and targets later-stage investments, often in existing portfolio companies.
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