Qiming raises $3.2b across dollar, renminbi funds

Healthcare has become an increasingly significant part of the firm’s strategy over several vintages, to the point that Fund VIII has been split in two: a core fund to be deployed in early and growth-stage healthcare and technology and consumer opportunities and a parallel healthcare-only vehicle.

It follows several adjustments designed to accommodate the differing capital needs of healthcare companies. Qiming closed its sixth fund on USD 935m in 2018 and deployed 60% of the capital in technology, media, and telecom (TMT). The rest went to healthcare. A 50-50 split was expected for the USD 1.2bn Fund VII, although healthcare was set to take up most of a 25% later-stage allocation.

Last year, Qiming launched Springhill Fund, a public equities unit with a mandate to build a concentrated portfolio of long-term holdings across various healthcare sub-sectors. The open-ended investment vehicle, which has a separate Hong Kong-licensed manager, raised an initial USD 500m.

Biotech has established itself as the core part of China healthcare investment in recent years. Deal flow surged to USD 3.9bn in the second half of 2020 and maintained a rapid pace through 2021, reaching a record quarterly high of USD 2.6bn in the last three months of the year. Since then, the fall has been swift – USD 1.7bn and USD 810m in the first two quarters of 2022.

“Private market valuations have been coming down slowly since the end of last year. Right now, I think the market is just completely oversold. If it's a good company, it’s probably raising money at a flat valuation [to the last round]; if it's so-so, they might have a hard time,” said Nisa Leung, a managing partner with Qiming in a recent interview with AVCJ.

There is a general expectation that less sophisticated healthcare investors – typically generalist VCs that have pushed into biotech without creating a deep bench of specialist talent – will scale back their involvement, easing the competitive pressure.

Leung, who co-leads healthcare investments, is one of four managing partners at Qiming. The others are Duane Kuang, William Hu, and Gary Rieschel. Hu is the other healthcare co-lead.

The broader team, which includes 10 partners and two venture partners, works out of offices in Shanghai, Beijing, Shenzhen, and Hong Kong. Recent partner-level additions include David Chu, who joined from Los Angeles County Employees Retirement Association (LACERA) to lead fundraising and investor relations.

The weakness in China biotech is partly driven by a correction in technology stocks globally earlier this year. China’s consumer-facing technology space was already embattled, having faced a series of regulatory crackdowns in 2021. US-listed Chinese concept stocks underwent a significant correction in the middle of last year when additional oversight was introduced for offshore IPOs.

This has hit China fundraising, with some LPs wary of making commitments. GPs raised USD 20.1bn for US dollar funds in 2021, consistent with the average for the previous five years. However, more than 70% of the capital was raised before the end of June. Fundraising in the first half of 2022 came to USD 7.3bn, according to AVCJ Research. VC managers alone attracted USD 1.7bn.

Nevertheless, some managers continue to raise large amounts of capital. Sequoia Capital recently hit the hard cap on each of the four funds in its latest China vintage, accumulating USD 8.8bn. The last time the firm came to market in 2020, it raised USD 3.68bn.

Qiming has now raised USD 9.4bn across 18 funds since its inception in 2006. Much like the US dollar business, the firm’s renminbi vehicles have increased in size with each vintage. Fund VII is 65% larger than its predecessor, which closed on CNY 2.85bn last year.

The firm has backed 480 companies to date, of which 70 have achieved unicorn status. There have also been more than 180 exits through IPO, M&A, and other means. Significant returns have been generated from investments in the likes of Xiaomi, Gan & Lee Pharmaceuticals, Tigermed, Zai Lab, CanSino Biologics, APT Medical, Meituan, Bilibili, and Roborock.

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• Topics
• Greater China
• Fundraising
• Venture
• Healthcare
• Technology
• GPs
• Renminbi fund
• China
• Qiming Venture Partners
• Fundraising