DCM closes Asia-US fund at $500m hard cap

The firm announced a final close on DCM Ventures China Fund (DCM VIII) last month. A US regulatory filing for the vehicle, made in December of last year, indicated a target of $400 million. DCM's previous fund closed in 2014 at $330 million and was followed later the same year by a $170 million top-up fund intended to make follow-on investments in later-stage portfolio companies.

Fund VII was smaller than its two predecessors, largely because Silicon Valley-based general partners Carl Amdahl and Dixon Doll were stepping down. The firm was expecting fewer US investments but more China exposure, with about $220 million of the $330 million corpus earmarked for start-ups in the country.

There was some turnover in the China team ahead of the latest fundraise with the departure of Ruby Lu, co-founder and general partner at DCM China. It was announced earlier this year she would join H Capital, a China-focused VC firm founded by Xiaohong Chen, ex-China managing partner at Tiger Global Management. Hurst Lin, the other co-founder of DCM China, remains in place.

The firm has traditionally focused on Series A and B rounds in the mobile, digital media, e-commerce, and cloud computing landscape, with portfolio companies supported through later rounds on a selective basis. In addition to teams in the US and China, it has a presence in Japan.

Recent Asia-based activity includes a $20 million re-up - together with Sequoia Capital - for China Online Education in parallel with a $45.6 million US IPO. DCM first backed the company three years ago. The firm also completed three other re-ups as existing portfolio companies raised larger later rounds: Chinese dating app Tantan, Chinese second-hand machinery online trading platform Tiebaobei.com, and Japanese customer relationship management software developer Sansan.

According to AVCJ Research, a total of $2.9 billion has been committed to 17 China-focused venture capital funds so far this year. This follows two bumper years for the industry in China, with $8.7 billion and $7.6 billion raised - over the full 12 months - in 2014 and 2015, respectively.

The bulk of the 2016 capital went to GGV Capital, which raised $1.2 billion across three vehicles targeting early and growth stage investments. Qiming Venture Partners also posted a sizeable final close, raising $648 million for its fifth China fund, while WI Harper Group closed its eighth fund, which targets early-stage investments in Asia-focused companies, at $175 million.

DCM has been in existence since 1996 and has more than $2.8 billion under management. It has backed more than 280 technology companies in the US and Asia.

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• Topics
• Greater China
• North America
• Fundraising
• Venture
• Technology
• DCM-Doll Capital Management
• China
• USA
• Japan
• TMT