AllChinaTech brings you the top 10 venture capital investors in China who backed many of the largest mergers and deals in the Chinese tech industry in 2015, based on a list generated by ITjuzi.com, a site that provides information and data on Chinese internet companies.
The list picks 20 out of 400 VCs from their database to top the list of China’s VC investors in 2015 in accordance with the number of investments they’ve made. Undoubtedly, IDG Capital Partners, Sequoia Capital in China and Matrix Partners China are the biggest three, which leave other VCs far behind in terms of the number of companies they’ve invested in.
Other names on the list are Innovation Works, Morningside Ventures, North Light Venture Capital, Legend Capital, Shenzhen Capital Group, Shunwei Capital, Qiming Venture Partners, SIG China, Ce Yuan Ventures, GGV Capital, SAIF Partners, SBCVC, China Growth Capital, GSR Ventures, Lightspeed China Partners, DCM China and Redpoint Ventures.
Let’s take a closer look at the top 10 VCs.
1. IDG Capital Partners
Founded in 1993, IDG Capital Partners was one of the first foreign VC firms to enter the Chinese market and focus exclusively on Chinese companies. It’s now based in Beijing, focusing on sectors including internet, mobile & high tech, modern brands & services, and healthcare. During its 22 years in China, it has invested in 307 companies. Two of the BAT giants, Tencent and Baidu, have received funding from IDG, and so have startup mammoths Xiaomi and Ctrip. Other noted ventures are Qihoo 360, a leading provider of internet security services, Baofeng, the leading online video platform, Xunlei, a multimedia download service, the O2O star Helijia and the steel material e-commerce site Zhaogang.com.
2. Sequoia Capital
Sequoia Capital, founded in 1972 in California, opened its office in China in September 2005. Sequoia Capital China now manages seven USD funds and three RMB funds. According to ITjuzi.com, it has invested in 246 companies, steering funds in sectors such as tech & media, consumer goods & modern services, healthcare, energy, and environmental protection. Having invested in China’s top two group buying platforms Meituan and Dianping, it facilitated the merger of the two companies. Other big investments went to companies including Alibaba, JD.com, leading news portal Sina.com, travel site Tuniu, e-commerce Mia.com, China’s largest dating app Momo and so on.
3. Matrix Partners China
38-year-old US-based investment firm Matrix Partners opened its office in Beijing in 2008. Matrix Partners China has invested in companies involved in internet & mobile technology, the service industry, healthcare and clean energy. 230 companies have received funding from Matrix Partners China, including some that have gone public, such as China’s leading film company Bonafilm and Qihoo’s domestic competitor Cheetah Mobile. Other names worth mentioning are O2O laundry service eDaixi, food delivery platform Ele.me, ride-hailing app Kuaidi Dache, women’s health app Meet You, decoration platform To8to and tech media 36Kr.
4. Innovation Works
Innovation Works was founded in September 2009 by tech celebrity Kai-Fu Lee (previously the head of Google China and founder of Microsoft Research Asia). With $500 million in assets under its management, the company has invested 95 companies in their seed or angel series, taking up 47% of the total investments. In total, 172 companies have received funds from Innovation Works, including China’s Quora, Zhihu, a PC tool for Android-based phone Wonderpod, mobile app analytical platform Umeng and “sound+image” mobile community Papa.
5. Morningside Ventures
Morningside Ventures, a branch of the Hong Kong-based Morningside Group belonging to the Chan family, was founded in 1992 in Shanghai. With over USD 1.5 billion under management, it has invested in 85 companies. Successful investments include leading news portal Sohu.com, Ctrip.com, Xunlei.com, China Distance Education, Phoenix New Media, and UCWeb. They are interested in Chinese companies involved in medical care, internet business, information services, and media.
6. Northern light VC
Founded in 2005, Northern Light targets early stage opportunities. Currently, it has offices in Beijing, Shanghai, Suzhou and Menlo Park in California, with headquarters located in Hong Kong. Their team, made up of experienced investors, entrepreneurs, and past managing directors, has a rich understanding of the market, both in China and abroad. Their focus is on 4 main sectors: TMT (technology, media and telecom), clean technology, healthcare and consumer goods. Among them, Hanting Express (a popular Chinese economy hotel), Meituan (a widely-used group purchase platform), U17 (a successful original animation platform), to name a few, have all received investment from NLVC.
7. Legend Capital
Founded in Beijing on March 26, 2001, Legend Capital’s core investment team members are former high-level management staff at Lenovo. Its parent company is Legend Holdings, which is under Lenovo. The team members have over 17 years of management experience from their time at Lenovo during various crucial stages in its development. They bring this experience to Legend Captial to provide small and medium start-up companies with not only capital but also management support. By May 2015, Legend Capital has set up three offices in Shanghai, Wuhan, and Shenzhen, and has invested in over 200 companies, of which 32 are already listed on NYSE, NASDAQ, HKEx, and some other major stock exchanges on the mainland. So far, they have ventured into areas like TMT, healthcare, clean technology, advanced manufacturing, consumer goods and modern services.
8. Shenzhen Capital Group
Established in 1999, ShenZhen Capital Group was initially known as Shenzhen Innovation and Technology Investment Company. They focus on equity investment and provide venture capital-related, value-added services that promote the development of high-tech industries in China. Their investment managers typically have 2-11 years experience in venture capital project management. Up until Dec. 2015, they have invested in 610 programs including but not limited to IT, internet, new media, biomedicine, and beyond, with a total investment reaching almost 18.8 billion RMB.
9. Shunwei Capital
Shunwei Capital is a Chinese VC firm set up in 2011, co-funded by Lei Jun, founder of mobile phone brand Xiaomi. The firm manages USD 1.75 billion and RMB one billion in capital. Though it hasn’t been around long, SW has been the lead investor for dozens of start-ups, many of which have established a solid user base, for example iQiyi and 51talk. Since it was founded by Lei Jun, it naturally plays a role in building and sustaining Xiaomi’s ecosystem. It has invested in over 30 Xiaomi-related programs since 2014. In 2015, Shunwei’s efforts started to skew towards education and finance.
10. Qiming Venture Partners
Founded in 2006 in Shanghai, Qiming is an established VC firm in China with offices in Beijing, Suzhou and Hong Kong. Qiming is currently running five USD funds and four RMB funds with over $2.5 billion in assets under management, according to CrunchBase. The firm primarily invests in mobile Internet advertisement, online-to-offline businesses, cloud services, education, hotels, consumer & retail and e-commerce. Its investment history includes recruitment platform Lagou.com, rental reservation platform Tujia.com, streaming video platform PPS, dating site Jia Yuan and social shopping guide Mogujie.com.
The best-funded sectors in China
E-commerce
There are several reasons why VCs prefer to invest in e-commerce. Firstly, Chinese people have relatively poor offline shopping experiences, due to deficiency in retail facilities. Online shopping is getting more and more popular, making up for the lack of brick-and-mortar stores. Besides, e-commerce giants like Alibaba have sneakily turned Chinese people onto the habit of shopping on sites like Taobao. For VC investors, money comes more easily and directly from e-commerce.
Business services
All kinds of enterprises are increasingly in need of services provided by the Internet to build a closer connection with their clients and to organize themselves more efficiently. China’s army of small and medium-sized enterprises number at about ten million and there is a huge market for business services.
Entertainment & Sports
With more and more money coming into their pockets, Chinese people are becoming increasingly crafty in terms of spending. They’ve started to want more than just stuff. The entertainment and sports industries are embracing their chance to earn big money with films, shows, e-sports and so forth. Two good examples are the founding of Alisports by Alibaba and Lesports by LeTV.
(With contributions from Yang Lai)