Cathay raises $320m for China-US-Europe VC fund
Middle-market private equity firm Cathay Capital Private Equity has closed its first venture capital fund at $320 million with a mandate spanning China, Europe, and North America.
LPs include China Development Bank’s investment arm CDB Capital and Shenzhen-listed milk company Joyoung. There are also French backers such as Bpifrance, BNP Paribas Cardif, Groupe ADP, Groupe Artemis, Groupe SEB, Michelin, Total and Valeo.
The fund, named after the firm’s VC affiliate Cathay Innovation, will invest 20-25 technology companies with initial commitments of $3-15 million each. The plan is to support start-ups that have international expansion ambitions through multi-continental operational support.
“Connecting European, Chinese, and American start-ups with the whole world may look obvious. But this approach did not exist until now in the world of venture capital, and meets a real need of digital entrepreneurs,” Mingpo Cai, president of Cathay Capital and co-founder of Cathay Innovation, said in a statement. “The entrepreneurs must accelerate the diffusion of their innovations and quickly scale up globally.”
Cathay Innovation was launched in 2015 with a view to raising up to EUR250 million ($284 million) and now comprises a team of 11 professionals across Beijing, Shanghai, Paris, and San Francisco. It claims to have completed more than 10 investments within a 20-month period, including Pinduoduo, a Chinese e-commerce platform said to be worth in excess of $1 billion.
Founded in 2007, Cathay Capital has completed more than 60 growth-stage acquisitions to date and claims about $1.5 billion in assets under management. Recent activity includes participation in a RMB400 million ($59 million) Series D round for China-based electronics recycling company Aihuishou.
The GP also manages a small-cap China-Europe fund that closed at EUR200 million last year and a mid-cap China-Europe fund that closed at EUR500 million in 2014. A China-North America fund was launched in 2015 with a target of $350 million.
Last year, Bruno Bezard, formerly the head of France’s Treasury Department, joined Cathay management as part of a plan to launch a new fund.
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