As challenges ranging from China’s slow economic recovery to regulatory uncertainty limit funding for startups, Innoven Capital Group, Southeast Asia’s leading venture debt provider, has announced that China’s early stage are saving cash to fund their businesses.
The Singapore-based venture debt firm announced on Friday that it has completed a $130 million initial close on its second China fund. The fund is a dollar-yuan dual currency fund with a total target of $250 million.
InnoVen Capital China Fund II’s lead investors are InnoVen Capital Group, a joint venture between asset management firm Seviola Holdings and United Overseas Bank (UOB), and the venture, which is “two Chinese local government entities” the bond company said in a statement, without providing further details. detail. Seviola is a wholly owned subsidiary of Temasek, Singapore’s sovereign wealth fund, and UOB is one of Singapore’s three “big regional banks”.
Venture debt is a loan to early-stage companies that helps increase a company’s liquidity between equity financing rounds. InnoVen Capital is structuring the deal with a combination of debt and equity financing, and each ticket size is typically less than $20 million, the company wrote in a note.
Venture capital investment in China will shrink by more than 7% to below US$70 billion in 2023, data provider Preqin said, with investors spooked by regulatory uncertainty and a lackluster economic recovery pushing the country’s startups to invest more. This is the lowest level in four years.
InnoVen’s second China fund was launched in 2023 and is expected to be fully closed in early 2025. The first China fund was closed in March 2023, with a total value of nearly US$100 million.
Taiwanese startups seek alternative markets as cross-strait tensions rise
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Ben Teck Ong, CEO of Innoven, said: “In an environment where the global economy faces multiple challenges and uncertainties, financing opportunities for China’s high-growth technology companies remain strong.” Ta.
“The Group has decided to strengthen its anchor commitment to the New China Fund. With a larger fund size and expanded geographical coverage, the New China Fund will be able to leverage outstanding start-ups across the country in their next stage of growth. “We will be in a good position to support those in need,” he added.
“While we recognize the challenges and uncertainties prevailing in the Chinese market, we remain optimistic about the opportunities.” [brought about by] industrial restructuring and the development of new science and technology,” said Cao Yingxue, managing partner of Innoven Capital China.
Sector-wise, this means the second Chinese fund will focus on industries such as deep technology, enterprise services, consumer and healthcare, while adhering to “ESG investment principles”, he added. .
The entrepreneurial spirit and dynamism seen in Chinese startups is also an important reason for inspiring confidence in the country. “Seizing the opportunities for Chinese companies to expand into Asia, the Belt and Road region, and beyond is a focus for us, and we are dedicated to partnering with them to help them successfully navigate and capitalize on these expansion opportunities,” he said. “There is,” he said.
Comprised of offices in Singapore, China, and India, InnoVen Capital Group has invested over USD 1.3 billion in 350 early and growth-stage companies, including 50 unicorns, or companies valued at over USD 1 billion. has grown into a start-up company.
The venture bond firm’s recent exits from China include office information technology provider Aidianyun and auto insurance search engine Cheche Technology. Both companies went public in Hong Kong and the US, respectively, in 2023.