China Tech Investor Defies Skeptics With $900 Million Fundraise
(Bloomberg) -- Venture firm IDG Capital is poised to raise about $900 million for a new fund focusing on investment in China, a rare feat amid skepticism about the political and market risks of Asia’s largest economy.
Most Read from Bloomberg
Natural Gas Soars 700%, Becoming Driving Force in the New Cold War
Citi Says Oil May Collapse to $65 by the Year-End on Recession
Ukraine Latest: Kyiv’s Immediate Funding Needs Hit $65 Billion
Person of Interest in July 4 Parade Shooting That Killed Six in Police Custody
Most investors are existing backers of IDG, which has been putting money into Chinese technology firms for nearly three decades, according to people familiar with the matter, who asked not to be named because the matter is private. The new fund will focus on technology startups, the people added.
The fundraising stands out as venture capital firms in China are struggling to raise cash amid the nation’s regulatory crackdown on private enterprise and an economic slowdown brought on by the pandemic. Putting aside this year’s stock rally, China is still weathering a decline in venture capital investments, despite once being touted as a primary rival to Silicon Valley.
IDG declined to comment in an emailed statement.
The value of deals in the country fell roughly 40% from a year ago to $34 billion in the first five months of 2022, according to data from the research firm Preqin. Meanwhile, venture capital and private equity funds raised $6.2 billion, a fall of more than 90% compared to the first five months of last year.
Chinese tech stocks have taken a beating in the past year, driving down valuations in the industry, and spurring risk averse investors who still want the exposure to allocate money into the country’s top investment outlets instead of less established ones.
IDG Capital has been investing in China since 1993, making bets on companies including Baidu Inc., SenseTime Group Inc., Xiaomi Corp and Tencent Holdings Ltd. It’s invested in more than 1,300 companies, with 400 successful exits, according to the company’s website.
Most Read from Bloomberg Businessweek
The Lottery Lawyer Won Their Trust, Then Lost Their Mega Millions
Did Razzlekhan and Dutch Pull Off History’s Biggest Crypto Heist?
Gangs Are Fake-Killing People in India for Insurance Payouts
Geely Is Launching Satellites in a Bid to Bring Driverless Cars to China
©2022 Bloomberg L.P.