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Oct. 17, 2001
DragonVenture Teams With Chinese VC Firm to Co-Manage a New Fund
San Jose, Calif.-based venture capital firm DragonVenture announced
yesterday it entered into an agreement with Shenzhen Venture Capital
Co., China's largest venture capital firm, to co-manage a RMB 500
million ($60 million) venture capital fund that will focus on software,
telecommunications, Internet infrastructure and technology companies
in China.
Half of the fund will be raised in China through Shenzhen Venture
Capital, with the other half coming from DragonVenture, with the
possibility of new U.S. investors joining the firm's roster of limited
partners, according to a press release.
DragonVenture, founded in early 2000 as a venture capital and consulting
firm to help with and invest in U.S. businesses with strategies
in China, as well as Chinese companies with U.S. strategies. The
firm has made investments in eight startups, including Magellan
International Corp., an online educational community for K-12 students
in China. The firm closed a $50 million fund in 2000.
"We are excited at the myriad of opportunities before us today
in China," K. Bobby Chao, chairman and co-finder of DragonVenture,
said in a press release. "By joining forces with the largest
venture capital firm in China and focusing on China's growing IC
and semiconductor sectors, we will be combining Silicon Valley experience
and knowledge with locally managed venture capital to help trigger
the next generation of entrepreneurial success stories in China."
Shenzhen was formed in 1999 and has government backing. The firm
has a total of RMB 3 billion ($362.8 million) in assets under management.
The firm makes equity investments in technology companies. The firm
has also called for Beijing to establish a national standard for
venture capital, as well as develop a second board for the city's
stock exchange. Current Chinese venture capital standards vary from
region to region. A second board is needed, the firm says, to allow
for easier exits and a greater return on investment.
DragonVenture, founded by Chao and Tony Luh, does consulting and
makes equity investments through its DragonVenture M&A Fund.
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