China’s Plum Ventures closes $50m USD fund to back startups going overseas

Traffic move down the third ring road in Beijing, China, on Monday 15 May, 2017. Photographer: Qilai Shen/Bloomberg

Chinese investment firm Plum Ventures has secured about $50 million for a USD-denominated fund to invest in domestic companies with a potential to expand to markets such as Southeast Asia, India and the United States.

The company will primarily use the new USD fund to back early-stage startups in China, cutting cheques between $30,000 and $1 million. The firm has been looking at potential investment opportunities since early this year, Plum Ventures founding partner Wu Shichun said during an online session on Thursday.

“Many mature business models that were born in China are also suitable to be deployed in overseas markets,” said Wu.

He added that power bank rental service, pay-for-knowledge, e-commerce, and fresh produce startups could be among them.

Plum Ventures will inject capital into companies oriented toward both individual and corporate clients, with a focus on “startups that have greater growth potential,” said Wu.

The USD fund comes less than a year after Plum Ventures announced the final close of its RMB-denominated fifth angel fund at 532.5 million yuan ($76 million) in July 2019. The previous fund took its total assets under management (AUM) to 3 billion yuan ($427 million).

With a focus on the internet space, Plum Ventures invests across a wide range of industries including consumption upgrade, software-as-a-service (SaaS), advanced manufacturing, robotics, education, and logistics.

Before the completion of the US fund, the company operated one select fund, five angel funds, and several special funds with investments that have backed more than 300 startups.

Some of its most prominent portfolio companies include Chinese electric vehicle maker CHJ Automotive, smart electric scooter brand NIU, New York-listed online consumer credit provider Qudian.com, and Newborn Town, which recently raised HK$175 million ($22 million) in an initial public offering (IPO) in Hong Kong.

Limited influence

Zhejiang-based Plum Ventures is raising the stakes in overseas opportunities as venture capital deals in Greater China have suffered from a steep 44.21 per cent decline in transaction volume in February, in the wake of the coronavirus outbreak that has claimed nearly 3,200 fatalities in the region as of March 12.

“Plum Ventures remains a fairly active early-stage investment fund, even when the deal activities of many domestic investors have slowed down,” said Wu. The VC firm has completed four startup demo events and screened out six companies since the beginning of this year.

“The epidemic will certainly have a greater impact on domestic industries. But it will also nurture and stimulate new consumption habits and new business models, such as working remotely, online education, and other new entertainment services,” said Wu. “These models might also be replicated in the overseas markets.”

Plum Ventures could be one of the few domestic investment firms that managed to close a new fund against the headwinds of travel restrictions and compulsory self-quarantine requirements introduced in several cities in China. According to Chinese market research firm Zero2IPO Group, the number of newly-launched funds in the country dropped 48.8 per cent month-on-month in February 2020.

“We have slightly adjusted our investment strategy due to the coronavirus outbreak. But its influence is limited,” said Wu.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.