Ince hits $450m first close on second China VC fund

The vehicle launched in mid-May and a 10-day virtual roadshow was conducted in the second half of the month. The original target was $450 million, and the hard cap has been set slightly above that level, according to a source close to the situation. Ince declined to comment on fundraising.

Ince set out to raise $300 million for Fund I in 2019 and ended up closing it at the hard cap of $351.9 million within four months. Most of the capital came from global institutional investors. LPs include the University of Pittsburgh, Duke University, Carnegie Mellon University, the Dietrich Foundation, Mayo Clinic, Kaiser Permanente, Commonfund, Unicorn Capital Partners, Axiom Asia, and Siguler Guff.

The source declined to identify specific participants in Fund II, while noting that Ince had once again received strong support from the endowment and foundation community, as well as from global and Asia-based fund-of-funds and asset managers.

Gan (pictured) set up Ince with Steven Hu, a gaming industry veteran. They were colleagues at NASDAQ-listed wireless value-added services provider KongZhong Corporation and then at Qiming, with Gan joining in 2006 and Hu in 2009. Hu subsequently had a five-year stint as CEO of mobile game developer Ourpalm before rejoining Qiming.

Other senior team members are also Qiming alumni. Stella Zhou, the third founding partner, was previously a partner at the venture capital firm, while CFO Paul Keung was a venture partner and Principal Alex Yan served as a vice president.

Ince focuses on the consumer internet space, primarily participating in Series A and B rounds. Fund II will follow the same strategy as Fund I. As of March, the debut vehicle had delivered a gross multiple of 2.55x and a gross IRR of 126%.

The key value drivers are: Shihuituan, a community group buying platform otherwise known as Nice Tuan; Eeo Education, operator of a software-as-a-service (SaaS) platform that effectively serves as Zoom for schools; Black Unique, a membership-based e-commerce business; and KK Group, an online-to-offline retailer that sells goods ranging from snacks to baby care products.

Several of these companies saw significant increases in demand during the pandemic. Nice Tuan's gross merchandise value (GMV) rose more than 50% between April and October of 2020, enabling the company to enlarge its Series C round to three tranches. It eventually closed at $500 million.

Eeo's customer base grew tenfold to 60,000 schools as offline education providers had no choice but to move teaching online during COVID-19. Ince signed a term sheet for a $35 million Series B in April 2020. Four months, later Eeo raised a $265 million Series C at a pre-money valuation of $750 million.

Two mainstream strategies in Asia PE attracted more capital in 2020 than they did a year earlier: Japan buyout and US dollar-denominated China venture capital.

China VC continues to power on, with $5.6 billion raised in the first six months of 2021, more than half the full-year total for 2020. This was shared between approximately a dozen GPs, underlining how top managers are leveraging strong demand to raise ever-larger funds.

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