Joy Capital sets $350m target for third China VC fund
Joy Capital is seeking $350 million for its third China-focused venture capital fund, which would take the four-year-old firm’s assets under management past the $1 billion mark.
The hard cap for the fund has been set at $385 million, industry sources said. Joy – which was established by Erhai Liu, who previously led technology, media and telecom (TMT) investments at Legend Capital – is also said to be nearing a final close of $330 million on its debut growth vehicle. The bulk of the corpus has been earmarked for follow-on rounds for existing portfolio companies.
The firm’s fundraising activity comes on the back of lucrative trade sale exit from bike-sharing business Mobike and US listings for electric vehicle manufacturer Nio and technology-enabled coffee shop chain Luckin Coffee.
Joy was said to be on course for an 11x money multiple on its investment in Mobike, which was acquired by Meituan-Dianping last year for an equity valuation of about $2.7 billion. Investors were offered a variety of cash-and-share deals. Joy Capital, which was the sole investor in Mobike’s Series A in 2015 and re-upped in the next three rounds, took 90% of its interest in cash.
The firm was also an early backer of Nio, investing $40 million in the company alongside Sequoia Capital China in 2015. It re-upped in 2016. Nio went public last September, having raised a lower-than-anticipated $1 billion in its IPO. Joy participated in two funding rounds for Luckin worth a combined $400 million. It was the second-largest external shareholder, with a 6.75% stake, prior to the company’s $561 million IPO last month.
Joy typically invests across Series A and B rounds in TMT, e-commerce, consumer, automotive, entertainment, and traditional industries integrated with the internet. The firm raised $200 million for its debut fund in 2016 and then followed up with $319 million for Fund II.
Other portfolio companies include property rental platform Danke Apartment, fresh juice vending machine operator Vingoo Juice, B2B e-commerce services provider ShopEx Network, auto after-sales services platform Tuhu, on-demand chauffeur service Ucar, and plastic surgery chain EverCare. It has also backed BluePay, a Shenzhen-founded mobile payment gateway that is a market leader in Thailand.
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