China's Source Code raises $570m for latest US dollar funds
Source Code Capital, a Chinese VC firm founded by Yi Cao (pictured), formerly a partner at Sequoia Capital China, has closed two new US dollar vehicles at $570 million.
Source Code Venture Fund IV and Source Code Growth Fund I received commitments of $290 million and $260 million, respectively, US regulatory filings show. The additional $10 million in each vehicle - which takes the overall total to $570 million - is understood to be the GP commitment.
The LP base comprises sovereign wealth funds, endowments, and foundations, pension funds, fund-of-funds, family offices and executives from leading global companies, the firm said. The two vehicles will follow the investment themes of the firm’s previous funds, focusing on early and growth-stage deals for new economy businesses.
Source Code believes opportunities will be driven by three trends: an "internet plus" strategy, whereby start-ups use technology to disrupt traditional industries; "global plus," which involves backing companies with a China angle in the international arena; and the emergence of intelligent technology such as artificial intelligence and virtual reality.
Founded in 2014, the firm currently has $1.5 billion in assets under management across three renminbi-denominated funds and three US dollar funds.
Source Code closed its debut US dollar fund at $100 million in 2014 and subsequently raised a $40 million annex fund to make follow-on investments in existing portfolio companies. Fund II closed at $150 million in 2015 followed by a third vehicle of $260 million in 2017.
On the renminbi side, the firm's first and second funds closed at RMB150 million and RMB200 million in 2014 and 2015, respectively. Fund III closed at approximately RMB1.6 billion in 2017.
Source Code has invested in over 150 companies across media, consumer, education, real estate, automobile, and finance. They include ByteDance, the parent company of Tik Tok and Jinri Toutiao, Hong Kong-listed online-to-offline services platform Meituan Dianping, US-listed online micro-lending player Qudian, property agency Homelink, and US-listed Chinese online shopping and social networking site Mogujie.
In recent years, the firm has also backed a number of B2B start-ups that are intended to bring greater supply chain efficiency to traditional industries. Among them are Yijiupi and Baibu, trading platforms for fast-moving consumer goods and fabrics, respectively, as well as logistics service provider Yimidida.
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