China's Joy Capital raises $718m for VC, growth funds

The Chinese firm – which was established in 2015 by Erhai Liu, who previously led technology, media and telecom (TMT) investments at Legend Capital – announced it had raised more than $700 million to take its total assets under management (AUM) past RMB10 billion ($1.45 billion). AVCJ learned the precise totals for each fund from a source familiar with the firm.

The venture fund was in the market for barely three months, with Joy setting an initial target of $350 million and then a hard cap of $385 million. The opportunity fund, most of which will go into follow-on rounds for existing portfolio companies, was launched earlier and expected to close around the $330 million mark. LP contributions came from public pension funds, insurance companies, sovereign wealth funds, endowments, fund-of-funds, and family offices.

Joy closed its debut fund at $200 million in 2016 and followed up with $319 million for Fund II. Citing data from Cambridge Associates, the firm claims these two vehicles rank in the top 5% VC funds globally for their vintages (2015 and 2017). Moreover, distributions from Fund I amount to nearly 100% of the corpus.

Liquidity events in the past 18 months – not necessarily for Fund I investments – include IPOs for electric vehicle manufacturer Nio and technology-enabled coffee shop chain Luckin Coffee as well as the sale of bike-sharing business Mobike to Meituan-Dianping. The latter transaction, completed at an equity valuation of about $2.7 billion, saw investors receive a combination of cash and shares. Joy is said to have taken 90% of its interest in cash, putting the firm on course for an 11x multiple.

Joy typically invests across Series A and B rounds in TMT, e-commerce, consumer, automotive, entertainment, and traditional industries integrated with the internet. It currently holds positions in Danke Apartment, Haozu and Xiaozhu, which handle residential, commercial and short-term stay rentals, respectively; auto after-sales services platform Tuhu, driving assistance technology developer Roadefend, co-working space start-up MyDreamPlus, and robotics specialist Megarobo.

The speed at which Joy has achieved RMB10 billion in AUM is not unprecedented in Chinese venture capital. On closing its fourth US dollar fund at $500 million last December, Gaorong Capital – which was established in 2014 by a team that spun out from IDG Capital – claimed that no other firm had crossed the RMB10 billion threshold faster. Both Joy and Gaorong manage renminbi as well as US dollar funds.

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• Topics
• Greater China
• Venture
• Fundraising
• Technology
• GPs
• China
• TMT
• Joy Capital