Redpoint China Ventures is the latest venture firm to raise capital for new funds: $300 million for investments in startups and $100 million for growth stage and for break-out companies in Redpoint's portfolio. Both funds are focused on China's consumer, enterprise and emerging frontier tech such as AI, robotics and autonomous driving.
Redpoint China completed the fund-raising in three months, and was over-subscribed, founder and managing partner David Yuan noted. He added that the new funds bring Redpoint's institutional investors to over 30, more than doubling the number from the firm's inaugural $180 million fund two years ago.
China venture funds climbed nearly 8 percent in 2018 to $23.6 billion, according to alternative assets data provider Preqin. The peak year was 2016 at $44.7 billion.
"The fund-raising climate for China-focused funds is increasingly bifurcating between has and has-not," Yuan said, in an interview with Silicon Dragon. "First-time managers are experiencing increasingly significant challenges in raising money. Many LP’s with China mandate have already reached fully allocations, and can only add on new managers when there are slots open."
China-focused venture firms that have recently raised new capital include such majors as Qiming Venture Partners, Matrix Partners China, Lightspeed China, and GGV Capital. Others that are currently fund-raising are venture stalwarts ZhenFund and DCM.
A star in Redpoint's early investing was Qutoutiao, which went public on Nasdaq less than one year after Redpoint China led its Series A investment. Qutoutiao is now one of the leading mobile content aggregation platform in China with a market cap of $2.5 billion. All together in 2018, four of Redpoint China's investees completed successful IPOs in the U.S., Hong Kong and China’s domestic stock exchanges: Qutoutiao and 360 Finance on Nasdaq, iDreamSky in Hong Kong, and 360 on the China A Share.
The Redpoint China team, based in Beijing and Shanghai, spun out from Redpoint in Silicon Valley in 2015 -- similarly to many other US firms that ventured to China. The cross-border strategy of investing seems to be working. Yuan noted that performance of Redpoint Chinese portfolio companies is among the top 5 percent.
“The U.S. and China are two of the world’s largest markets for technology innovation and Redpoint has seen first-hand how strong collaboration between our regions can help all our portfolio companies succeed through shared with access, insights and connections,” said Satish Dhamaraj, partner Redpoint Ventures.
The team in China has grown to 20 professionals, including two partners Yuan and Reggie Zhang. Tony Wu, a partner in Fund I, will discontinue his role in Fund II.
