Orchid Asia reaches $1.1b first close on Fund VIII
Orchid Asia has achieved a first close of $1.1 billion on its eighth fund, five months after launching the vehicle with a full target of $1.6 billion.
AVCJ was informed of the first close by sources close to the situation. One source added that the firm's previous fund - which closed at $1.3 billion in 2017, beating a target of $900 million - had generated a net IRR of 42% as of the first quarter of 2021. Orchid declined to comment on fundraising.
LPs that have disclosed their involvement in Fund VIII include Orange County Employees Retirement System (OCERS), Public Employees Retirement Association of New Mexico, Texas Teachers Retirement System, Commonwealth Superannuation Corporation (CSC), Allstate Insurance, Maryland State Retirement & Pension System, and Los Angeles City Employees' Retirement System.
The new fund will continue its predecessor’s strategy of providing growth capital to experienced executives who are building franchises in China. Orchid focuses on four sectors: consumer, technology, education, and healthcare. The firm has a separate team for healthcare investments and has increased its exposure to this sector in recent years.
According to AVCJ Research, deals announced in the last six months include a $120 million Series E commitment to online financial information platform Snowball Finance and participation in a $100 million Series B for gaming company Quwan Network Technology. It also led Series B rounds - of $30 million and $100 million, respectively - for animal husbandry business Jian'an Supply Chain smart lock maker Kaadas Intelligent Technology.
Orchid was founded in 1993 and raised $42 million for its first fund the same year. The firm now claims about $6 billion in assets under management. It operates out of offices in Hong Kong, Shanghai, Beijing, and Guangzhou.
Among the stand-out investments from previous funds are travel booking platform Ctrip, wich generated a 20x return, online car sales business Autohome (46x), baked goods brand Ganso (15x), cybersecurity player Sangfor (330x), and social network Yalla (45x).
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