Morningside secures $1b for China venture fund

Morningside’s last two funds comprised three tranches: a core venture fund, a growth vehicle for later-stage investments, and a co-investment pool. The firm has not specified whether the new offering has the same structure. Two regulatory filings refer to Evolution Fund I and Evolution Fund I Co-Investment, which were seeking $600 million and $135 million, respectively.

Commitments came from Morningside’s existing LPs, while a number of endowments, foundations, and financial institutions came in as new investors, according to a statement. “Given the volatile political and economic environment globally, the closing of the fund carries a special significance for us. This means foreign investors still have faith in China’s long-term growth,” said Richard Liu, a managing partner with the firm.

Morningside retains its general technology, media, and telecom (TMT) scope, with areas such as social media, artificial intelligence (AI), healthcare, education, e-commerce, transportation, and housing services expected to feature prominently in the new fund.

The firm has seen three portfolio companies – Xiaomi, Huya, and Huami – go public in the last 12 months, according to AVCJ Research’s records. Morningside was one of the first institutional investors in Xiaomi and still held a 13% stake at the time of the smart phone maker’s $4.7 billion Hong Kong offering. Another exit came when social networking platform Musical.ly was bought by Jinri Toutiao.

Morningside is also an investor in the likes of AI technology developer SenseTime, electric car manufacturer Xpeng Motors, and autonomous driving technology specialist Pony.ai. All have closed sizeable funding rounds since the start of the year.

Established as part of the family office of the Chan family, owner of Hong Kong property developer Hang Lung Group, Morningside’s TMT team spun out in 2007-2008 and started launching independent funds. However, the Chan family remains an anchor LP. It has offices in Shanghai, Beijing, and Hong Kong, and manages over $1.5 billion in assets. The firm closed its debut renminbi fund at RMB1 billion ($143 million) last year.

Morningside is not the only Chinese venture capital firm to complete a sizeable fundraising effort this year. Sequoia Capital raised $2.5 billion for its latest China funds, which cover seed, growth and venture strategies, while Qiming Venture Partners received $648 million and RMB2.1 billion ($334 million), respectively, for its latest US dollar and renminbi vehicles. The likes of Matrix Partners China, Sinovation Ventures, and Vision Plus Capital Partners also closed funds that are larger than the previous vintages.

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• Topics
• Greater China
• Fundraising
• Technology
• Venture
• China
• Morningside Technologies
• Venture
• TMT