China’s early-stage VC Sky9 Capital closes two new funds at $440m

The Sky9 Capital team. Photo from company website.

Chinese early-stage venture capital firm Sky9 Capital has announced the close of two new VC funds with a combined $440 million in capital commitments.

The Shanghai-based VC firm, founded by former Lightspeed China Partners managing director Ron Cao, said Sky9 Capital Fund IV LP and Sky9 MVP Fund LP received support from institutional investors such as sovereign wealth funds, foundations, pension funds, and family offices.

Fund IV will continue to concentrate on early-stage startups, mostly at Series A and B funding stages, while MVP Fund will focus on growth-stage and break-out companies in the Sky9 portfolio, the firm said.

Sky9 Capital Fund III closed in April 2018 with total capital commitments of $200 million.

“The over-subscribed fundraise signals Sky9 and its partners’ excitement, confidence, and commitment to China’s great entrepreneurs and the next generation of high-impact companies,” the firm said.

The close of the two new funds comes as Chinese VC investments in Southeast Asian startups grew more than eight-fold year-on-year to $1.78 billion in the first seven months of this year, according to a Refinitiv data.

Established in 2016, Sky9 Capital specializes in seed, early, and expansion stage investments in the financial technology sector. It prefers to invest in deep technology, media, telecommunication, internet consumer, social e-commerce, next-generation social network, financial technology, mobile platforms, B2B commerce.

“The potential disruptions around internet, media, commerce, software, infrastructure, and AI are perhaps greatest around the Chinese start-up ecosystem as the country’s entrepreneurial environment continues to mature and develop,” Cao, founder and partner of Sky9 Capital, said.

Sky9 invests between $1 million and $10 million in seed to Series A rounds and over $10 million for expansion-stage companies.

So far this year, the firm has participated in the funding rounds of three Chinese startups – group buying platform Songshu Pinpin; blockchain news media firm DeepChain; and cryptocurrency exchange Coinsuper.

The close of Sky9’s two VC funds follows other Chinese VC firms that have also announced raising fresh capital commitments for their funds. Among them is XVC Venture Capital, which raised about $330 million for its second fund, XVC Fund II.

The new fund, which surpasses its fundraising target of $265 million, has capital commitments mainly from university endowments and family offices in the United States, Europe, and Asia.

Early this month, Xiang He Capital also announced the close of its second USD-denominated fund at the increased hard cap of $425 million. The firm focuses on internet, enterprise services, AI, and big data in China.