The International Finance Corporation (IFC) is likely to make an equity investment of up to $25 million in a new fund, SBCVC Fund V, L.P., which will invest in equity and equity-linked instruments of fast-growing mid-market technology companies in China.
SBCVC, or SB China Capital, is a venture capital and private equity firm set up in 2000. It targets investments in high-tech, high growth ompanies in TMT, clean technology, healthcare, consumer/retail, and advanced manufacturing sectors; across all stages of growth.
SBCVC Fund V has a target fund size of $400 million with a hard cap of $475 million.
SBCVC has invested in over 100 companies across China since 2000, most of which became regional and global brands.
“In the current fund, IFC will be supporting around 40 promising Chinese companies to grow and gain access to international capital markets,” IFC said, in a its investment disclosure.
The global development institution said it will invest primarily through one or more subsidiaries formed in the Republic of Singapore (or Hong Kong) and People’s Republic of China.
“The manager, SBCVC Holdings Limited, is based out of British Virgin Islands, the adviser is based out of the Republic of Singapore (or Hong Kong) and the consulting company has offices in Shanghai, Beijing, Suzhou, Shenzen, Tianjin, Chongqing / Chengdu, Xi’an, Hangzhou, Ningbo, Yinchuan, Taiwan in China,” the announcement read.
SBCVC Management V, L.P. is the sole general partner of the fund and will exercise control and supervision over its operations.
The general partner of the General Partner is an entity controlled by Chauncey Shey, Dr. Peter Hua, Dr Alan Song, Tim Liu and Kathy Chen.
SBCVC Fund V, a Cayman limited partnership, is the successor to these funds – the 2000 vintage $100 million SB China Holding Pte. Ltd. (Fund I); the 2006 vintage $151.6 million SBCVC Fund II, L.P. (Fund II); SBCVC Fund II-Annex L.P., a $43 million 2006 vintage co-investment vehicle for Fund II; SBCVC Fund III, L.P. (Fund III), a $320.4 million 2008 vintage fund, and SBCVC Fund IV, L.P. (Fund IV), a $386.7 million 2011 vintage fund.
Among other impact that are expected from this investment are the support of innovation and technology, as SBCVC invests in early and growth stage technology firms, supporting and empowering entrepreneurs and innovation.
IFC’s commitment will also provide necessary risk capital for asset light businesses such as technology firms, for which access to long term equity capital is difficult.