Qiming defies coronavirus to close seventh China fund at $1.1b

The firm shared its fundraising plans with LPs at its annual general meeting in November and then launched the vehicle in February with a target of $1 billion. Investors were scheduled to come to Shanghai the week of February 11, but with coronavirus cases in China on the rise, there was a general reluctance to travel. Qiming's senior management team immediately flew to San Francisco and spent 14 days in quarantine before conducting meetings. The fund closed on schedule.

"Even when we visited some LPs, a week later the campuses started closing in New York and Boston and some other places. We were lucky we squeezed it into the timeframe. It is so difficult with the pandemic – no one is seeing people, let alone fundraising," said Nisa Leung, a managing partner at Qiming. "It's probably the most challenging fundraising environment we have ever seen."

Qiming Venture Partners Fund VII is the largest China fund raised so far this year, ahead of CMC Capital Group, which announced its $950 million final close in late February, having completed much of the work in 2019. Overall China private equity fundraising slipped from $11.8 billion in the final quarter of 2019 to $3.4 billion in the first three months of 2020.

Some new names were added to the LP roster for Fund VII, but the investor base is still primarily populated by endowments, foundations, family offices, and private pension funds. Many of those are longstanding backers of Qiming funds.

"Qiming has developed a strong reputation and track record as a leading venture capital firm and is notable for its culture of partnership within the firm, with entrepreneurs, and with LPs," said Jim Millar, a managing director at the Princeton University endowment, which has been an anchor investor in Qiming since its inception in 2006.

The firm closed its sixth US dollar fund at $935 million in April 2018, stepping up from $648 million for Fund V. About 60% of Fund VI has been deployed in technology, media and telecom (TMT) investments and the rest in healthcare. However, for Fund VII, a 50-50 split is expected. While early-stage deals will account for the bulk of the capital, around 25% has been earmarked for later-stage rounds for existing portfolio companies. Most of those will be in the healthcare space.

Biopharmaceuticals, medical technology, diagnostics and healthcare services have been identified as the key domain areas within healthcare, while information technology, artificial intelligence, enterprise services, consumer internet, and e-commerce will dominate TMT coverage.

Qiming used to have separate teams for consumer internet and technology hardware but last year they merged. That change followed the departure of J.P. Gan, the managing partner responsible for consumer internet coverage. He launched Ince Capital Partners and raised for $351.9 million for a fund focused on that area. Qiming's managing partner line-up now comprises Leung, Duane Kuang, William Hu, and Gary Rieschel.

Qiming has $5.3 billion in assets under management across nine US dollar and five renminbi funds. A sixth renminbi vehicle is likely to launch later this year. The firm has invested in 350 companies, of which 30 have achieved unicorn status. There have been 110 liquidity events via IPO or trade sale.

Distributions to LPs in 2019 amounted to $1 billion, largely driven by sell-downs in previously listed companies such as Xiaomi, Meituan-Dianping, Zai Lab, and Berry Genomics. There have been three IPOs so far in 2020: Schrodinger, a drug discovery software company, listed on NASDAQ in February, while smart vacuum manufacturer Roborock and an orthopedic business that spun out from Shandong Weigao both went public on China's STAR Market.

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• Topics
• Greater China
• Venture
• Technology
• Healthcare
• Fundraising
• China
• Qiming Venture Partners