Alibaba-Backer GGV Gathers Over A Billion To Invest In Startups
GCV Capital raised over a billion to fund startups in China and US at a time when the Chinese economy suffers from the consequences of slowdown
The GGV Capital, which backed Airbnb and AliBaba, raised a sum of $1.2 billion in new capital to finance startups in US and China, an indication of resiliency amidst skittishness in the international startup market.
The funds will be spent across four GGV funds, including a sum of $250 million allocated to finance initial-stage startups. The organization is finding a large number of opportunities with entrepreneurs inside the state, who are working on their second or third startup, a trend in the United States with entrepreneurs like Twitter’s Jack Dorsey and Tesla’s Elon Musk.
The financing comes amidst concerns regarding the conditions of the market for startups in the US and Asia. Venture Capital organizations raised a sum of $48 billion across the globe in 2015, which is less than $51 billion in 2015, revealed London consultancy service provider, Preqin Limited.
The funds invested in new emerging organizations declined in the last quarter, and investors declined the value of shares in well-known companies like Indian online shopping platforms ‘Flipkart’ and ‘Snapdeal’.
In China, investments in venture did increase in the first four months of the year and many other China-focused venture capital investors are raising record-making funds. Sequoia Capital looks to invest $1.45 billion for some funds to invest in Chinese tech startups, people aware of the matter stated in March. In February, the Chinese venture capital investor Qiming Venture Partners raised a sum of $648 million, the largest fund of the organization since it was established in 2006.
The largest Chinese startups are raising billions of dollars. The app-based cab service ‘Didi Kauidi’, the online property service provider Homelink and finance affiliate of Alibaba are receiving a sum of $6 billion to the least, people aware of the separate agreements told previous week.
The Chinese e-commerce company’s affiliate, operator of Alipay, is aiming over $3.5 billion, which would market the biggest fundraising round of the tech industry. In 2015, the technology boom in China was witnessed with falling smartphone price that boosted rapid growth in everything from manicures, phone-ordered messages, and online shopping apps.
Now that such a large number of phone-users are there, that growth isn’t taking place, said GGV’s managing partner, Jexin Foo. This indicates that capital will be injected to some organizations as investors chance on what they view as category winners, he stated.
Foo’s organization is interested in investing in automation, industrial and consumer robotics, Chinese consumer enhancements in services and products, enterprise efficiency devices and virtual reality-powered entertainment. The financing will let GGV Capital reach a sum of $3.8 billion under management. Foo said he believes that cooling off the market for startups is not such a bad thing.
Valuations will fall down and the country will turn into a much more attractive region to invest. It could be said that the fundraising by the startup would help the Chinese economy to recover from the economic slowdown.