China's Genesis targets $1.2b for Fund III
Genesis Capital, a China growth-stage technology investor established by Richard Peng, who previously led the investment program at Tencent Holdings, is seeking $1.2 billion for its third US dollar-denominated fund.
The new vehicle launched in the past two months, according to a source close to the situation. Genesis did not respond to requests for comment.
Peng founded Genesis in 2015, teaming up with Kurt Xu, another Tencent alumnus. The firm raised $450 million for its debut fund and followed up with two renminbi vehicles of undisclosed size. A second US dollar fund closed at $850 million in 2019.
Genesis typically targets Series C and D rounds for technology-enabled companies with proven products that have yet to achieve critical mass. It prioritizes clear business models, high barriers to entry, and strong management teams.
“Many companies struggle after the A and B rounds as they figure out the right business model or product fit and they may have trouble raising money at the Series C stage. You need to spend a lot of time observing them,” Peng told AVCJ after the Fund II close.
“It requires tremendous experience and effort to identify companies that are about to take off. Most businesses are not that popular when we make our investment, but they go on to reach an inflection point.”
The sector focus is consumer and enterprise services. Genesis looks for opportunities where IT can reshape, upgrade or disrupt traditional industries, for example, by delivering operational efficiencies. Expansion of consumer services into lower-tier cities within China has been another key theme.
The firm secured an early Fund I exit when dating app Tantan was acquired by US-listed Momo in 2018. More recently, there have been IPOs for trucking business Manbang and grocery platform Miss Fresh.
Other Genesis portfolio companies include social media and e-commerce platform Xiaohongshu, HR management software provider Beisen, artificial intelligence infrastructure specialist 4Paradigm, online education business Zhangmen, and maintainance, repair, operations platform Zhenkunhang.
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