IDG reaches $586m final close on early-stage China fund

According to AVCJ Research, this takes China VC fundraising for 2014 past the $5 billion mark, with less than half the year gone. The amount of capital raised surpasses the full-year totals for every year on record apart from 2011, when renminbi-denominated fundraising was at its peak.

IDG China Venture Capital Fund IV represents the first time the VC firm has tapped the market since 2011, when it raised two vehicles under the IDG-Accel banner. IDG-Accel China Capital Fund II raised $750 million for later stage and pre-IPO tech investments while IDG-Accel China Growth Fund III had $550 million for early-stage deals.

The firm has raised three other funds with Accel, three renminbi-denominated vehicles and smaller, targeted funds launched in partnership with Hearst and News Corporation, online game developer NetDragon Websoft, and peer-to-peer lender CreditEase, respectively.

"The new fund exceeded its original target due to heavy oversubscription by existing limited partners as well as strong interest from new investors," said Hugo Shong, founding general partner at IDG, in a statement. "We are especially pleased to announce the participation of Breyer Capital, the global investment and venture philanthropy firm founded by Jim Breyer. Jim has been collaborating with IDG China and investing in China for over a decade and he will play a leading strategic advisory role in the new fund."

IDG's China VC operation was formed in 1993 and has more than 300 companies in its portfolio. The firm was an early-stage investor in the likes of Baidu, Tencent, Qihoo 360, Sohu, Soufun, Ctrip, 91 Wireless, Xiaomi and CreditEase.

In April, IDG made a partial exit from Tarena International as the Chinese IT training services provider raised $137.7 million through a NASDAQ IPO. It is one of five US listings by PE and VC-backed Chinese companies operating in the TMT, healthcare and education spaces so far this year. They have generated nearly $2.5 billion, more than any full-year total on record.

The revival of the IPO market and sharp growth in technology trade sales have made investors more bullish about China VC, contributing to the jump in fundraising.

There is also a cyclical effect: IDG last came to market in 2011, around the same time as several other firms that have closed funds this year, including Legend Capital, GGV Capital, Matrix Partners China and Qiming Venture Partners.

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• Topics
• Fundraising
• Venture
• Greater China
• Early-stage
• Venture
• China
• Fundraising
• IDG Capital Partners