Sinovation confirms Fund IV close at $500m
Chinese VC firm Sinovation Ventures has confirmed a final close for its fourth fund at the targeted corpus of $500 million.
The US dollar-denominated fund, which launched in February, was said to have received commitments in excess of its target after one month.
According to a statement, most of the firm’s existing LPs contributed to the fundraise, including pension funds, fund-of-funds, a sovereign fund, family offices, and a global manufacturing company. New investors include a European financial institution a global automobile company. For both new investors, it represented their first strategic investment in China.
It follows the announcement earlier this month of a $50 million contribution by Spanish bank BBVA and a commitment in February from the International Finance Corporation to invest $15 million. Previous LPs in Sinovation’s various vehicles include Tencent Holdings, Sequoia Capital China, Baillie Gifford, Sina Corp, and Draper Dragon Fund.
The close brings Sinovation’s total capital managed to more than $1.7 billion across six funds, including four US dollar funds and two renminbi funds. It also coincides with the launch of a third renminbi fund which is targeting RMB2.5 billion ($395 million). The second renminbi vehicle closed at RMB2.5 billion in 2016 in conjunction with a final close for the third US dollar fund at $300 million.
Fund IV will make early and growth-stage investments in both Chinese and US technology companies across internet consumption, B2B, and education, with a special focus on artificial intelligence (AI). BBVA expressed an interest in bringing the fund’s AI developments to the banking sector and indicated its intent to co-invest accordingly. Sinovation launched an AI ecosystem development program in 2016 and invested the sector as recently as November by leading a $20.6 million round for China’s Zhuiyi Technology.
Sinovation's investments are mainly focused on China, with a small portion of the corpus deployed overseas. Foreign companies should have products and services that can be transferred to China. Recent activity includes participation in growth rounds for US-China educational hardware company Wonder Workshop and Chinese e-commerce player Hua Juan.
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