China's Ince raises $700m across two funds

Ince Capital Partners II was oversubscribed and closed on USD 478m. It launched in May 2021 and achieved a first close of USD 450m – the overall target for the fund – in July following a 10-day virtual roadshow. The firm collected USD 222m for Ince Opportunity Fund.

Ince took just four months to raise USD 351.9m for its debut vehicle in 2019, with strong support from endowments and foundations, as well as from global and Asia-based fund-of-funds and asset managers. All the endowments, foundations, and fund-of-funds in Fund I re-upped for Fund II, according to a statement.

Participants include Duke University, Carnegie Mellon University, University of Pittsburgh, Kaiser Permanente, The Dietrich Foundation, Commonfund, Unicorn Capital Partners, Axiom Asia, and Siguler Guff.

“Despite the global uncertainty and challenging capital market, we continue to believe in the innovation, entrepreneurship in China and Chinese venture capital as a great asset class,” said Edward J. Grefenstette, Dietrich’s president and CIO.

“We have a high level of confidence that Ince partners, with their deep experience and thoughtfulness, will navigate through these uncertain times exceedingly well.”

China-focused VC managers raised USD 18.7bn in 2021, up from USD 16.9bn the previous year. A total of USD 11.4bn went to US dollar funds alone, just short of the record level set in 2020. However, 70% of the capital raised in the US dollar space was committed before July, when additional hurdles were introduced for technology companies looking to list overseas.

Following a string of other regulatory interventions, some LPs began to hold fire. Numerous fundraising processes, for private equity and venture capital firms, were slowed or planned closes delayed. Industry participants are not confident of a return to form in 2022.

"I think in the next six months, fundraising for China-focused GPs is going to be very, very difficult. We are advising managers to wait until summer or the second half of the year to launch funds, if that’s possible,” Niklas Amundsson, a partner at placement agent Monument Group, told AVCJ in December.

Nevertheless, Ince is one of several final closes announced at the tail-end of 2021 or early in 2022. Lightspeed China Partners raised USD 920m for its latest vintage, while Eastern Bell Capital – a growth-stage PE investor with significant technology exposure – and Linear Capital raised USD 800m and USD 500m for their second and fifth US dollar funds, respectively.

Ince’s second fund will follow the same strategy as its predecessor, focusing on early-stage opportunities at the nexus of consumer and internet. The firm has backed 24 companies to date, including community group buying platform Nice Tuan, software-as-a-service (SaaS) provider Eeo Education, e-commerce player Back Unique, and online-to-offline retailer KK Group.

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 re-joining 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.

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