Banyan raises $725m across US dollar, renminbi funds

The firm was founded in 2014 by Xiang Gao, Zhen Zhang and Yue Bin (pictured) - who previously focused on technology, media and telecom (TMT) investments for IDG Capital - and now has around RMB11 billion in capital under management. It claims that no other China VC firm has crossed the RMB10 billion threshold faster.

Banyan’s third US dollar fund comprises a $350 million main corpus and a $50 million side vehicle made up of contributions from management and entrepreneurs in the venture capital firm’s network. LPs in the main fund, which took about one month to raise, include university endowments, US pension funds and family offices. Many of these are investors in Banyan’s previous funds.

While the firm relied heavily on contributions from high net worth individuals in raising $206 million for its first fund, the LP base has become more institutional with each vintage. Fund II closed at $362 million in early 2015 and was followed by a $100 million co-investment vehicle that makes follow-on investments in existing portfolio companies.

The renminbi fund is also Banyan’s third. It closed at RMB2.5 billion, having received commitments from leading domestic financial institutions and corporations active in traditional industries as well as the technology space. A host of internet entrepreneurs also put in money, among them the founders of Baidu, Tencent Holdings, Xiaomi, and JD.com.

Banyan raised RMB320 million for its first local currency fund in 2014 and then RMB560 million for the second, which closed in July 2015.

The new funds, on both the US dollar and renminbi sides, will follow much the same remit as their predecessors, focusing on early- and growth-stage TMT investments, according to a statement. Areas of particular interest include artificial intelligence, consumer and industrial internet applications, enterprise services, consumer upgrades, and culture and entertainment.

To date, eight Banyan portfolio companies have achieved valuations of $1 billion or more and last year 10 generated gross merchandise volumes in excess of RMB10 billion. Banyan has realized seven exits, one via IPO and six through trade sales. A further seven portfolio companies have listed on the National Equities Exchange and Quotation (NEEQ), also known as the New Third Board.

Since its establishment, Banyan has created a post-investment support team that works in areas such as business development, human resources, marketing and public relations, commercial partnerships, management training and financial planning. Following the most recent fundraise, the GP plans to further expand both this team and its investment team.

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• Topics
• Greater China
• Venture
• Renminbi fund
• Fundraising
• GPs
• Technology
• China
• Venture
• Banyan Capital
• TMT