GGV raises $1.9b to back China, US start-ups

Fund VII follows a structure laid down for Fund VI and designed to allow participation in every phase of a start-up’s life. There are four vehicles in total: a core venture fund a pool of top-up capital, with a combined corpus of $1.36 billion; an early-stage vehicle of $460 million; and a $60 million entrepreneurs fund through which members of the GGV network, primarily the founders of Chinese start-ups, can participate in deals.

While the top-up vehicle enables GGV to enter growth-stage rounds as companies stay private for longer, the seed fund gives it scope to partner with serial entrepreneurs on new ventures from an early stage. In the previous vintage, GGV secured $657 million for the VC fund, $225 million for the top-up pool, $250 million for the early-stage vehicle, and $50 million for the entrepreneurs fund.

Disclosed LPs include Los Angeles City Employees Retirement System (LACERS), the National University of Singapore, Northwestern University, California State Teachers’ Retirement System (CalSTRS), Oregon Public Employees Retirement Fund, the Rockefeller Foundation and University of Texas Investment Management (UTIMCO).

As of March 2018, GGV Capital VI – the core venture fund – had delivered an IRR of 16.39%, according to CalSTRS. Data from Oregon Public Employees Retirement Fund for the same time period indicates that Fund V had delivered a 2x multiple and a 30.2% IRR, while Fund IV was on 2.34x and 20.7%.

GGV raised $625 million for Fund IV in 2011 and then $620 million for Fund V in 2014. The first top-up vehicle – intended to make follow-on investments in existing portfolio companies from Funds IV and V – closed at $475 million in 2015.

Founded in 2000, GGV has backed 51 companies across China and the US that have gone on to achieve valuations of $1 billion or more. Half of these were at the Series B stage or earlier when the GP first invested. About half of the 51 are now publicly traded. The firm claims that its pace of distributions is still strong, with more than $1 billion returned to investors since the start of 2017.

GGV targets investments in the consumer and new retail, social media and related digital services, enterprise software and cloud technology, and frontier technology segments. Online news aggregator Jinri Toutiao, transportation platforms Didi Chuxing, Grab, and Hello Chuxing, and fitness app Keep are among its current Asia-based portfolio companies.

Earlier this year GGV closed its first renminbi-denominated fund at RMB1.5 billion ($236 million). Including Fund VII, the firm’s assets under management now stand at approximately $6.2 billion across 13 vehicles.

GGV represents the third billion-dollar-plus fundraise in China’s venture capital space this year. Qiming Venture Partners announced in April that it had collected $1.39 billion for its latest US dollar and renminbi vehicles, as well as for a US healthcare fund. This was followed by Sequoia Capital raising $2.5 billion across three funds covering seed, venture and growth investments, and Morningside Venture Capital closing its fifth China vehicle at $1 billion.

[Pictured: Glenn Solomon, Jeff Richards, Jenny Lee, Jixun Foo, Hans Tung, and Eric Xu, GGV's managing partners.]

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• Topics
• Greater China
• Fundraising
• Venture
• Technology
• GPs
• GGV Capital
• TMT
• China