Xiang He Capital Closes US$425m China-Focused VC Fund

Xiang He Capital, the China TMT-focused venture capital firm established by former Baidu executives Maggie Yang and Hesong Tang, has closed its second US dollar venture fund at US$425 million.

In a statement, the firm, which was founded in 2016, said the fund exceeded its US$350-million target as investors from the US, Europe, Middle East, and Asia, chipped in to invest in China’s technology, media, and telecom (TMT).

Among the investors in the new fund are global consultants, fund-of-funds, pensions, family offices, foundations, university endowments, and global consultants, the firm said.

The fund will continue to invest in tech-enabled and high-growth internet businesses in China. The focus will be on companies that have operational traction but have not reached the growth stage of investment yet.

So far, the fund has completed four deals in sectors spanning, AI, enterprise services, online education, and ecommerce. The firm currently has two dollar-denominated funds and one RMB fund with assets under management of over US$1 billion.

In a statement, Hesong said the oversubscribed fund reflects Xiang He Capital’s collaborative and strategic approach to partnering with management teams and investors. He added that China’s TMT market is even more exciting with the coming cycle.

Hesong was vice president of Corporate Development at Baidu before starting Xiang He. He oversaw the company’s M&A and strategic investments. On the other hand, the firm’s co-founder, Yang, was managing director of Corporate Development at Baidu.

Xiang He Capital’s portfolio investments include data analytics and business intelligence solutions firm Guandata, social ecommerce platform Beidian, SaaS software firm Moka, big data analysis company Sensors Data, and Shanghai-based AI-powered medical data solutions provider Synyi.

Xiang He said its comprehensive and analytical approach, coupled with its strategic vision, are highly recognized by entrepreneurs and have been instrumental in winning competitive deals in China’s VC space.