Exclusive: GGV launches $500m China fund

The cross-border VC firm is raising Fund V.

US- and China-based venture capital firm GGV Capital has launched Fund V with a target of $500 million and a hardcap of $600 million, according to a source with knowledge of the matter.

The firm has strong interest from existing and new LPs and may have the momentum to reach final close in the first half of 2014, the source told Private Equity International.

GGV’s previous fund targeted $600 million but closed on $519 million in August 2012. 

LPs in Fund IV included California State Teachers' Retirement System, Los Angeles County Employees' Retirement Association, Oregon Investment Council,Oregon Public Employees' Retirement System, Pantheon Ventures and University of California Regents Endowment Fund, according to PEI’s Research and Analytics division.

The firm also closed a 700 million RMB (€83 million; $115 million) vehicle in 2011. 

GGV will face a tough fundraising environment. Venture capital fundraising for China plunged 50 percent last year to $1.97 billion, according to data from DJX Venture Source, and reported earlier in PEI. Fourth quarter 2013 venture fundraising was down 83 percent year on year.

Another key venture firm, US-based Sequoia Capital, launched a China fund in February and is reportedly targeting between $500 million and $600 million.

GGV last year managed to pluck Hans Tung from Qiming Venture Partners, where he had been a partner for six years, PEI reported earlier. Tung joined GGV as a managing director to focus on internet, mobile, and gaming industry investments, and he was an early investor in Chinese smartphone maker Xiaomi Tech.

GGV, which launched its first fund in 2000, has one integrated team that provides expansion capital to companies in both China and the US. Sectors include internet, cloud services, and consumer. The firm has offices in Menlo Park, Beijing, Shanghai and Singapore and currently manages $1.6 billion in capital across four funds, according to GGV’s website.