GGV to spin off Asia operation

The Singapore-headquartered Asia partnership, led by Jenny Lee and Jixun Foo, will invest primarily in China, Southeast Asia, and South Asia. The US partnership will cover most other geographies, including North America, Latin America, Israel, and Europe as well as India-US cross-border deals. It will be led by Glenn Solomon, Hans Tung, Jeff Richards, and Oren Yunger.

Eric Xu remains the managing partner for GGV’s renminbi-denominated funds, which have always been managed independently. They operate under the Jiyuan Capital brand.

“Investing locally through a global lens has been our guiding principle for the past 23 years, driving GGV Capital’s vision to support entrepreneurs who are making a positive difference around the world,” the partners said in a joint statement.

Over the last decade, the investment landscape has shifted significantly, and the operating environment has become highly complex. Against these new realities, GGV is also evolving.”

These new realities became more pronounced in August when US President Joe Biden signed an executive order prohibiting outbound foreign investment in China that targets certain sensitive technologies, including semiconductors and microelectronics, quantum information technologies, and artificial intelligence (AI).

US persons – individuals as well as entities organised under US law or in US jurisdictions – will be held responsible for adhering to the prohibition, the US Treasury Department said. The same obligation may apply to US persons with respect to foreign entities under their control. This prompted questions about US VC firms that invest directly in China or have relationships with China-based VC firms.

In the weeks prior to the executive order, a select committee of the US House of Representatives wrote to several venture capital firms – including GGV – asking for information regarding investments in Chinese AI, semiconductor, and quantum computing businesses.

The committee noted that GGV was identified as the most prolific investor in Chinese AI start-ups in a study of outbound investments into Chinese AI companies between 2015 and 2021 by Georgetown University’s Center for Security and Emerging Technology (CSET). China accounted for 43 out of 112 AI investments GGV made globally during the period.

In June, Sequoia Capital announced that its China and India-Southeast Asia operations would formally separate from the Sequoia entity in the US and become independent partnerships. Sequoia Capital China has changed its name to HongShan. More recently, BlueRun Ventures China was rebranded as Lanchi Ventures to differentiate itself from the Silicon Valley VC firm with which it shares a name.

Unlike most of its peers, GGV has not to date raised dedicated US dollar China funds, preferring to invest from global pools. The most recent vintage closed on USD 2.52bn in 2021. It included GGV Capital VIII (USD 1.46bn), GGV Capital VIII Plus (USD 366m), Entrepreneur VIII (USD 80m), and Discovery III (USD 610m). Plus is a top-up vehicle and Entrepreneur raises capital from founders in the GGV network.

A regulatory filing from February indicated that GGV was targeting USD 2.5bn for a new set of funds. The flagship vehicle, GGV Capital IX, remained but the Discovery strategy was split into separate US and Asia vehicles.

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• Topics
• Greater China
• GPs
• Technology
• Regulation
• China
• USA
• GGV Capital
• TMT