Sinovation seeks $500m for China fund

The vehicle - Sinovation Fund IV - will invest in technology, media and telecom (TMT) start-ups based in China and overseas. Foreign companies should have products and services that can be transferred to China. Target segments include artificial intelligence (AI), e-commerce, enterprise software and services, and digital media. The International Finance Corporation (IFC) said in a disclosure that it plans to invest $15 million in the fund.  

Sinovation was set up by Kai-Fu Lee (pictured), formerly head of Google China, in 2009. The firm operated under an incubation-plus-investment model in its early days. The incubator identified companies or individuals with potential and got them started. Those deemed to have sufficient potential received early-stage backing from the firm, with other VC investors brought in as the companies gathered momentum.

The GP spun off the incubation business and listed it on the National Equities Exchange and Quotation (NEEQ) in early 2016, with a view to accessing funding from the public market. The listed entity doesn’t include the firm’s fund management business.

Sinovation closed its third US dollar fund at $300 million in late 2016, in conjunction with a renminbi-denominated vehicle worth RMB2.5 billion ($375 million). The third US dollar vehicle was consistent with previous vehicles in terms of size: the GP raised $275 million for Fund II, closed in 2012, and $180 million for its debut vehicle in 2011.

Sinovation’s recent investments include Chinese AI specialist Zhuiyi Technology, e-commerce and online video platform Hua Juan, and video communication services provider Xiaoyu Link.

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• Topics
• Greater China
• Fundraising
• Venture
• Technology
• Early-stage
• China
• Sinovation Ventures
• TMT
• Technology