Taiwan’s Cherubic closes $110m VC fund

The firm closed its fourth fund on USD 89m in 2018 and raised USD 80 and USD 42m, respectively, in the two prior vintages. Matt Cheng, Cherubic’s founder and managing partner, said in a statement that the LP base includes institutions and family offices – while noting how difficult it was to gain traction with blue chip investors on launching the firm in 2014.

“We were of course shot down many times, but one time in particular left a deep impression when an investor looked me straight in the eyes and said: ‘It is literally impossible for you to raise money from institutional investors,’” Cheng recalled.

“I think a lot of people when being handed such a blunt rejection would give up right there, but on a gut instinct I had reacted with a question: ‘Then what should I do?’ The funny thing is, after I asked my question, this particular investor came to like us, and even though they didn’t invest in us at the time, they eventually became a great friend and mentor.”

Several years after that first meeting, the investor became a Cherubic LP. On receiving a phone call with this news, Cheng said that he wept.

Cheng followed the well-trod path from entrepreneur to angel investor to venture capitalist. He was part of the founding teams of Tian Ge Interactive Holdings, a China video-sharing platform that listed in Hong Kong in 2014, and Fotoable, a photo editing app. He is also credited as a co-founder 91App, an omnichannel commerce solutions provider described as Taiwan’s first homegrown unicorn.

Cherubic has invested in more than 150 start-ups since inception, of which 10 have gone on to become unicorns. The number of unicorns doubled in 2021, led by the likes of Chinese content marketing platform Tezign, US-based geostationary communications satellite operator Astranis Space Technologies, and Flexport, which claims to be a leader in the digital transformation of US logistics.

There have been approximately 27 exits. Last year, two unicorns went public: 91app listed in Taiwan with a market capitalisation of NTD 7.9bn (USD 262.5m) and then closed up 153% on its first day of trading; and US-based digital health start-up Hims & Hers merged with an Oaktree Capital Management-sponsored special purpose acquisition company (SPAC) at a valuation of USD 1.6bn.

Another landmark exit came when PayPal acquired Paidy, a Japanese buy now, pay later platform, for approximately JPY 300bn (USD 2.7bn).

Cherubic has earmarked 50% of Fund V for follow-on investments, enabling it to remain involved through the pre-IPO rounds. The strategy otherwise remains unchanged.

Working out of offices in Taipei, Shanghai, and San Francisco, the Cherubic team focuses on start-ups that are in the process of establishing product-market fit and leverages its global resources to support expansion.

Other Asian portfolio companies include enterprise services providers Lima Technology, CCX Credit Technology, KK Lab, and iKala, as well as pharmaceutical logistics platform YK Drugs, online education business Liulishuo, healthcare start-up Healthy2Sync, and Pinkoi, an e-commerce platform specialising in original design goods.

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• Topics
• Greater China
• Fundraising
• Venture
• Technology
• Taiwan (China)
• Cherubic Ventures
• Fundraising
• TMT