Sinovation closes $362m RMB fund, establishes GBA base

The fund launched last year as a cooperative effort with the Guangzhou government. In addition to the fund, Sinovation has established an AI research institute and a branch of its Chuangxin Qizhi business services unit in the city. The aim is to combine investment, innovation and business empowerment, with the research institute taking the lead on R&D and business transformation and Chuangxin Qizhi helping companies implement technology solutions in their daily operations.

In addition to AI and big data, the fund will target education, consumption upgrades, and B2B business services, Sinovation said in a statement. Prior to this fundraise, it had RMB15 billion under management across US dollar and renminbi vehicles. A fourth US dollar fund closed at $500 million last year. Sinovation raised $300 million for the predecessor vehicle in 2016 and secured RMB2.5 billion for its second local currency fund at the same time.

The firm makes early and growth-stage investments – typically Series A to C rounds – in Chinese companies, with a small allocation for overseas deals. AI is expected to feature prominently across all its funds following the establishment of an AI ecosystem development program in 2016. Sinovation claims to have backed more than 370 companies, of which 14 have achieved unicorn status. Five of these are AI-related businesses.

Citing research by iiMedia, a local digital consultancy, it said there were 20 unicorns in South China at the end of last year, including five in Guangzhou. There were also 33 “quasi-unicorns” – no further explanation was given for how these are defined – of which 11 were in Guangzhou.

The Sinovation statement went on to say that the three key “bay areas” globally – San Francisco, New York and Tokyo – are highly urbanized marine economies with one or more global cities, top-quality innovation and manufacturing capabilities, and large hinterland populations. The Greater Bay Area boasts similar characteristics and aspires to be recognized as part of this group.

"Capital gives momentum to the development of an AI industry. The combination of capital and technology, aligned with commercial opportunity, creates the strongest framework for rapid growth,” Ning Tao, president of Sinovation, said. “More AI technologies, solutions, and cutting-edge talent will help the Guangdong, Hong Kong, Macau and the Greater Bay Area build an international technology innovation center.”

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• Topics
• Greater China
• Fundraising
• Renminbi fund
• Technology
• China
• Sinovation Ventures
• Renminbi
• TMT
• artificial intelligence