Chinese VC Xiang He Capital beats target to close second USD fund at $425m

Shanghai, China. Photo by Merlin Kraus on Unsplash

Chinese venture capital firm Xiang He Capital has closed its second USD‐denominated fund at the increased hard cap of $425 million, the firm announced on Tuesday.

The oversubscribed fundraising exceeded Xiang He Capital’s initial target of $350 million, with support from both existing and new investors that include global consultants, university endowments, foundations, family offices, pensions and fund‐of‐funds from the US, Europe, the Middle East, and Asia‐Pacific.

In July, DealStreetAsia reported that the Beijing-headquartered fund manager secured a first close for the second fund, which already surpassed the corpus target.

Xiang He Fund II, launched in June 2018, inherits the Fund I strategy to invest in “high‐growth internet and tech‐enabled businesses in China, identifying and investing at an inflection point where companies have operational traction but have not yet scaled to the growth stage of investment,” Xiang He Capital said.

The second vehicle has made four investments in e‐commerce, online education, enterprise services, and artificial intelligence. The most recent deal was a Series B funding worth $14.5 million in GuanData, a Chinese provider of next-generation data analytics and business intelligence solutions to new retail and new finance customers.

“We have been able to source some interesting early investments in the fund and believe the coming cycle offers exciting opportunities for China’s TMT market and a more normalised valuation environment for this vintage,” said Hesong Tang, founding partner, Xiang He Capital.

Tang and Maggie Yang, his co-founding partner, were former Baidu investment executives before establishing the venture capital firm in 2016. They were responsible for major acquisitions at Baidu, such as investments in iQiyi, Qunar, PPS and 91 wireless.

Xiang He Capital has also backed logistics companies Lalamove and Yunmanman, AI-enabled healthcare startup Synyi, Sensors Data, and education platform VIPKid, among others.

With a focus on internet, enterprise services, AI and big data in China, Xiang He Capital manages two USD funds and one yuan fund with over $1 billion under management.

Despite lingering effects of the trade war, the good news for investors in the TMT sector in China is that the country is likely to further relax restrictions on foreign investment, according to law firm Hogan Lovells. Recently, CITIC Capital Partners closed its latest China buyout fund with a focus on TMT at $2.8 billion.

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.