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ByteDance-Backer snags $3.2bn as China startup hopes grow

Investors remain cautious about regulatory uncertainty but recent weeks have shown signs of improving sentiment, as Sequoia China secured about $9 billion for investments in tech and consumer firms.
Image: Qilai Shen/Bloomberg

Qiming Venture Partners raised $3.2 billion across two new funds, joining Sequoia China and IDG in securing fresh capital as investors grow more sanguine about the country’s startup arena.

Qiming, known for early bets on tech giants from ByteDance Ltd. to Meituan and Xiaomi Corp., becomes at least the third venture house in recent weeks to home in on significant new capital. The firm closed its oversubscribed USD Fund VIII at $2.5 billion and also raised roughly $700 million in the first closing of a yuan-denominated fund, both aimed at the technology, consumer and health-care sectors. Qiming now manages $9.4 billion across 18 funds, it said in a statement on Monday.

Venture funding in China plummeted at the start of this year as the government’s far-reaching crackdown on consumer internet, gaming and fintech hit valuations across public and private markets. VC and private equity funds raised only $6.2 billion in the first five months of 2022, a 90% drop from the previous year, while startup investments slowed 40% to $34 billion, according to data from research firm Preqin.

Investors remain cautious about regulatory uncertainty but recent weeks have shown signs of improving sentiment, as Sequoia China secured about $9 billion for investments in tech and consumer firms. IDG Capital is poised to raise about $900 million for a new China-focused fund backed mostly by existing investors. Early-stage investor BlueRun Ventures China also reached the final close of a second dual-currency fund of more than 5.5 billion yuan ($817 million) in May, according to a company statement.

Founded in 2006, Qiming has backed over 480 companies. The company has made over 180 exits, it said in the statement. Managing Partners Duane Kuang, Nisa Leung, William Hu and Gary Rieschel will lead Fund VIII, the firm said.

© 2022 Bloomberg

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