Plum Ventures raises $77m for China angel fund

Established in 2014 by Shichun Wu, a serial entrepreneur whose resume includes Kuxun, an online travel site acquired by TripAdvisor, Plum has invested in nearly 350 companies. They include microlender Qudian, which went public on NASDAQ in 2017 but has since come under regulatory pressure, and Niu Technologies, an electric scooter manufacturer that listed in the US last October.

Institutional investors account for 80% of the fund corpus, with the rest coming from high net worth individuals (HNWI), the venture capital firm said in a statement. The fundraise comes 12 months after Plum collected RMB500 million for its debut select fund, which participates in Series A and B rounds, principally for existing portfolio companies.

Wu noted that the capital has been raised amidst a “cold winter” for renminbi-denominated funds. “Angel investment is the best weapon to counter a down cycle,” he added. “Plum Ventures now has sufficient ammunition to focus on new economy companies and to help smart young people become great entrepreneurs, while generating excess returns for LPs.”

Renminbi fundraising fell by more than half to $31.9 billion in 2018 due to a combination of weakening sentiment among HNWI and corporate investors and restrictions on financial institution participation in PE and VC funds. The number of final and partial closes fell below 200 from more than 370 in 2017. In the first six months of 2019, $2.1 billion was allocated to about 120 funds.

In addition to the angel funds and the select funds, Plum manages several special vehicles. It claims that, as of March, 70% of all portfolio companies had received follow-on funding and more than a dozen had achieved valuations in excess of $100 million. The average IRR across all funds was 40%. Other investments include childcare e-commerce site Mia, karaoke app Changba, truck logistics platform Fuyoukache, and app developer NewBornTown.

The firm will continue to concentrate on new economy areas such as smart manufacturing, artificial intelligence, e-commerce, digital content, enterprise services, and mobile app development. It also provides post-investment services across capital raising, legal and finance, marketing and PR, and human resources. Additional support comes from a 300-strong portfolio company community.

“We hope to play three roles for entrepreneurs: as shoulders, offering support so they can climb to the next level; as eyes, identifying trends and challenges they do not; and as a bridge, connecting them with other businesses with a view to promoting cooperation and the exchange of ideas.”

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• Topics
• Greater China
• Fundraising
• Renminbi fund
• Technology
• China
• TMT
• Plum Ventures
• seed