BA Capital raises $147m for renminbi fund, hits first close on dollar fund

The consumer sector-focused GP has also reached a first close of $100 million on its debut US dollar fund. The vehicle has a target of $150 million, according to a regulatory filing.

BA Capital declined to comment on the US dollar fundraising, but it confirmed the final close on the renminbi vehicle. Approximately 60% of LP commitments came from fund-of-funds with corporates and entrepreneurs providing the remainder. Ning Wang - founder of Pop Mart, a BA Capital portfolio company that filed for a Hong Kong IPO earlier this year - is among the backers.

BA Capital was established in 2016 by David He, former head of strategic investment at ByteDance, and Michael Zhang, previously an investment professional at Eight Roads. It raised RMB380 million for its debut renminbi vehicle in 2017.

In the past four years, the firm has backed 15 companies, among them Pop Mart, milk tea beverage chain Hey Tea, sugar-free drink brand Yuanqi Senlin, online-to-offline fashion retailer KK Group, oatmeal brand Wangbaobao, and liquor brand Jiang Xiaobai.

BA Capital's strategy is to identify leading consumer start-ups and back them through multiple rounds. Zhang told AVCJ that the firm's core advantage is its sector specialization, which lends itself to in-depth deal-sourcing efforts. For example, his team goes into shopping malls and calculates customer traffic for target companies. 

Zhang added that BA Capital is only interested in retail businesses that are strong enough in terms of brand and internal operations to generate a profit without support from third-party capital. He advises that investors think carefully before backing loss-making companies.

Starquest Capital is one of BA Capital's LPs, leveraging the relationship to co-invest in Pop Mart. The fund-of-funds has 15 portfolio GPs, of which half are sector specialists, including generalist firms with dedicated teams for different sectors. 

"When we first looked at these specialist funds in 2009, we asked whether they could outperform generalist funds. In the US and Europe, the returns for specialists aren’t necessarily better than for generalists. Now it’s not a question – you must be a specialist, particularly in China," Frankie Fang, founding managing partner of Starquest, told AVCJ earlier this month.

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• Topics
• Greater China
• Fundraising
• Renminbi fund
• Consumer
• GPs
• China
• ByteDance
• Eight Roads
• BA Capital