Shunwei raises $525m for second China VC fund

The vehicle, which had a target of $500 million, was substantially oversubscribed, with strong demand from existing institutional LPs. Sources estimate the fundraising process took about two months. Regulatory filings divide the fund into two parallel vehicles, the $315 million Shunwei China Internet Fund II and the $210 million Shunwei China Internet Opportunity Fund.

Shunwei was set up in 2011 and raised $225 million for its debut fund the same year, with commitments from sovereign wealth funds, family offices, fund-of-funds and endowments. It focuses primarily on early to mid-stage investments in internet, e-commerce and social networking businesses. The firm is led by Lei and Tuck Lye Koh, formerly of GIC Private and C.V. Starr Investment Advisors.

Shunwei is seen as representative of a new breed of China VC firms, started by or raised from founders of successful first-generation internet businesses. Their pedigree tends to be rooted extensive deal-sourcing networks and proven operational ability.

Lei began his career at software developer Kingsoft and set up Joyo.com, an online music, book and video retailer, almost as a side project. It was sold to Amazon in 2004. He stepped down as CEO of Kingsoft in 2007, shortly after taking the company public, and embarked on a second career as an angel investor. Early targets included social networking site YY, which listed in the US in 2012, and mobile browser UCWeb, now backed by Alibaba Group.

Xiaomi was set up in 2009 and the most recent round of funding valued the business at a reported $10 billion.

The successful fundraise takes total capital committed to China-focused VC funds to around $5.2 billion so far this year, the most since 2011. Most of the money has gone to established names such as IDG Capital Partners, Legend Capital, GGV Capital, Matrix Partners China and Qiming Venture Partners.

However, a number of newer players - covering technology but straddling the PE and VC spaces - have also attracted capital.

In addition to Shunwei, IDG spin-out Banyan Capital raised $206 million for its debut fund, while Vision Knight Capital - a PE firm founded by ex-Alibaba.com CEO David Wei - drew $550 million for its second vehicle. In the last few weeks, Yunfeng Capital, which was set up by David Yu and Jack Ma, founders of Target Media and Alibaba, respectively, closed its second fund at $1.1 billion.

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• Topics
• Fundraising
• Venture
• Greater China
• Technology
• Shunwei Capital Partners
• Lei Jun
• Fundraising
• China
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• TMT