Shunwei raises $1.2b for fourth China VC fund

Regulatory filings from July indicated that Shunwei China Internet Fund IV and Shunwei China Internet Opportunity Fund III each had a target of $600 million. From its second fundraise onwards, the venture capital firm has launched venture and growth vehicles in parallel. A Shunwei statement offered no comment as to the structure, merely saying that it would continue to back early to growth-stage start-ups.

Shunwei was set up in 2011 and raised $225 million for its debut US dollar fund the same year, with commitments from sovereign wealth funds, family offices, fund-of-funds, and endowments. Three years later, Fund II closed at $525 million, comprising $315 million in commitments for the venture vehicle and $210 million for the growth fund. There was an equal split between the two tranches for Fund III, which closed at $1 billion in 2015.

Shunwei raised RMB1 billion ($145 million) for its first renminbi fund in 2015. There are now two local currency vehicles, with total AUM of RMB2 billion.

Led by Lei and Tuck Lye Koh, formerly of GIC Private and C.V. Starr Investment Advisors, Shunwei is seen as representative of a new breed of China VC firms, started by, or raised from, founders of successful first-generation internet business. Their pedigree tends to be rooted in extensive deal-sourcing networks and proven operational ability.

The GP focuses primarily on early to mid-stage investments in internet, e-commerce and social networking businesses. It has backed more than 100 companies since inception, including Xiaomi, which raised $4.72 billion in a Hong Kong IPO in July. The portfolio also features the likes of iQiyi, Renrenche, 17zuoye, Kuaishou, Ninebot, and Jinri Toutiao.

Despite weakening public markets in China – prompted by slowing growth and Sino-US trade tensions – underperforming unicorn IPOs, worsening renminbi fundraising conditions, and talk of a correction in start-up valuations, a select bunch of VC managers have still completed substantial fundraisings.

In October, GGV Capital closed its latest fund, comprising early-stage, venture, top-up, and entrepreneur co-investment vehicles, at $1.88 billion. This followed 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. Earlier in the year, Qiming Venture Partners collected $1.39 billion for its latest US dollar and renminbi vehicles, as well as for a US healthcare fund.

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• Topics
• Greater China
• Venture
• Fundraising
• Technology
• GPs
• China
• Shunwei Capital Partners
• TMT