Leading Chinese funds

Not sure how much WSO knows about China, but here is a question: what is the landscape for VCs in the new economy / tech sector beneath the first layer of obvious ones?

I would typically see firms like IDG and Hillhouse in the top tier, with maybe foreign companies like Sequoia too. Beneath this though, are funds such as (in no particular order) Clearvue, Genesis, Zhen and Zhong. Are there any views on additional names to this list?


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Jan 18, 2019 - 1:19am

Have a slow Friday afternoon. Been in both USD and RMB fund space in China so I'd pitch in. I am currently working for corporate development for a large cap TMT company so I deal with VCs and PEs once in a while.

In China MFs would look into sub $100mm space, but since you asked for VCs, here we go.

Top tier: Sequoia (better dealflow than MFs/UMM in Series B/C, has great PE funds too, probably have most solid teams), Warburg (they start investing in Series B as well, best performance among US/European funds), Hillhouse (multi-stages, stellar teams overall), Tencent (their funds are more financial than strategic but amazing dealfow), Alibaba (more strategic but small teams with great dealflow), GA (recently poached Carlyle's China head), DCM (lean teams and great dealflow), DST (small teams and I think they only hire ex-GS)

1.5 tier: IDG (has good growth and PE funds too), GGV, Sourcecode (teams can be a bit nerdy but yield very stellar performance, has Tier 1 potential), Morningside, Qiming (top VC in healthcare), Banyan (do not know anyone there but overall good comments from other investors), Matrix (mixed teams and lots of VIPs, would probably even put them in Tier 2, HC teams are solid though)

Tier 2: lots of other funds, including Legend Capital

Bottom Tier: I would probably even put TPG and TA associates here, along with other funds which deliver really sub-par performance like Baidu M&A team

KPCB and NEA are in stealth mode so cannot really comment. Zhen Fund has taken a downhill path really so I really cannot say much. Genesis is reasonably decent (founded by ex-head of Tencent's fund)

Apr 17, 2019 - 12:57am

Currently I'm at an FMCG PortCo based on the mainland. I've dealt with mostly F&B Teams from VC firms either for investment/partnerships with their PortCos. My thoughts are mostly interactions with the VCs:

  • Clearvue: Met them three years back, a few of their people are impressive and had a reasonable understanding the F&B ecosystem. But the majority of the team I met lacked fundamental industry knowledge. The old team made a lot of misplaced bets in F&B, but I know they've reshuffled in the past year or two.

  • TZG Partners - smaller VC firm backed by ex-MBB guys. Not on many people's radar but good team/strategy in F&B. They've had a few good exits over the years. Their management team are also pleasant to deal with and overall good people (I know I am an emotional sucker).

I've also dealt with some SOE backed VC funds, but can't comment too much on them apart from that their strategy is a little "wide" and depth on their teams in F&B is slim.

To henryxub - curious what your thoughts are on the JD M&A Team, China Resources Backed VC/PE Funds and other larger SOE backed VC funds like szvc.com. I know that's pretty broad but would appreciate if you have any insight. I come across them via their FMCG portcos a lot.

Apr 19, 2019 - 6:20am

Yeah, so SOE backed VC/PE funds can be a different beast, even through lens of LPs. I think generally their culture/hours can be pretty laid back/not as competitive as Sequoia and the like, since in reality they might be playing a FoF/LP role or closing co-investments. You also will be paid under market as they oftentimes commensurate with hours.

Do you mean JD M&A team as JD capital or JD.com? Both are lackluster and underperform in the market. I am not sure about CR since I have zero interactions with them. SZVC has a large portfolio and they recently closed an investment with us. Very large fund so culture/ dealflow is highly dependent on the group.

Apr 22, 2019 - 4:22am

Yes I meant the JD.com team - sorry should have clarified.

I only interact with these larger VC/PEs within the F&B sector so I don't interact with the other sector teams!

Thanks for the insight/answers!

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