Ince seeks $450 million for second China VC fund

The launch is scheduled for the middle of May, according to sources close to the situation. Fund I – which closed at $352 million in October 2019 – is already 60% deployed. Capital reserved for follow-on rounds takes the firm past the 70% threshold, permitting a return to market. Ince declined to comment on fundraising.

The speed of deployment reflects a general industry trend. China VC investment reached a record $21.9 billion last year, up from $14.1 billion in 2019, and $12.7 billion was put to work in the first four months of 2021, AVCJ Research’s records show. COVID-19 was responsible for a slow first quarter of 2020, but investment rebounded aggressively, topping $6 billion in each subsequent quarter.

The number of VC deals fell 12% on 2019, suggesting an increase in average round size. This corresponds to a resurgence in general investment activity in the technology sector. A total of $43.1 billion was deployed – up from $31.9 billion in 2019, though still down on the record high of $60.8 billion set in 2018 – with much of that going into growth-stage rounds.

Ince, which was established by J.P. Gan, formerly a managing partner at Qiming Venture Partners, concentrates on the consumer internet space. It primarily participates in Series A and B rounds, with the latter being the core focus. The firm moved swiftly in response to COVID-19, targeting trends that were being accelerated by lockdowns early last year. Online education was an obvious candidate.

“We know how much people spend on after-school tuition in China. There are hundreds if not thousands of Chinese companies in this space, with $1 million to $100 million in annual revenue, and spread across the country in second, third, and even fourth-tier cities. They had no choice but to move teaching online during COVID-19, which meant more demand for online video tools,” Gan told AVCJ late last year.

Ince identified Eeo Education, operator of a software-as-a-service (SaaS) platform that effectively serves as Zoom for schools. They signed a term sheet in April 2020 and a $35 million Series B investment – the largest the VC firm has made – closed in July. Four months later, Eco raised $265 million in Series C funding at a pre-money valuation of $750 million. Hillhouse Capital led the round.

Ince has also benefited from the surge in demand for online grocery services. It participated in a funding round for Shihuituan, a community group buying platform otherwise known as Nice Tuan, in early 2020. This became the first of a three-tranche Series C round totaling nearly $500 million. Alibaba Group and Jeneration Capital led the $196 million third tranche.

Shihuituan’s gross merchandise value (GMV) rose from RMB650 million ($91 million) in April 2020 to RMB1 billion in October. Over the same period, its footprint doubled to 200 cities and 200,000 community leaders.

Ince’s other portfolio companies include pet services platform Petkit, membership-based e-commerce business Black Unique, gem trading platform CodeBox, retail operator KK Group, lifestyle brand BetterWood, and online medical consultation and pharmacy services player Miaoshou Doctor.

China VC managers raised $9.75 billion for US dollar-denominated funds in 2020, up from $7.4 billion the previous year. The record high is $9.9 billion in 2018. A total of $2.65 billion has been raised so far in 2021.

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• Topics
• Greater China
• Fundraising
• Venture
• Technology
• China
• Ince Capital Partners
• Fundraising
• Venture
• TMT