A lot of venture capital firms has sprung up lately to focus exclusively on the greater China and Asia startups.
AsiaTech Nears Close on Fund V
The red-hot venture activity in Asia has lured yet another firm to the fund-raising trail. Taipei-based AsiaTech Ventures is near a first close on its fifth fund, VCJ has learned.
General Partner Peter Chu says that the firm is aiming to raise $100 million, but anticipates a first close of $30 million by the end of March.
U.S. and Asian-based firms raising Asian-centric funds are nothing new. For instance, Taipei-based Crystal Ventures – which also has offices in Cleveland and Palo Alto, Calif. – was expected to close earlier this year on the first commitment of its third fund, a $150 million vehicle that will focus on Asia.
And in October, Wellesley, Mass.-based Battery Ventures closed its seventh fund at $450 million, allocating up to 15%, or nearly $70 million, for international investments.
AsiaTech, too, sees the value of investing in its own backyard. The firm, which is one of the oldest venture firms in the Asia Pacific region, will focus nearly the entire new fund on China.
The focus represents a continued shift for AsiaTech, which over the last six years has stepped up its activity in Asia. Just five years ago, only about half of the firm’s assets were devoted to Asia, with the rest of the investments headed into the United States.
Chu says that practically all of Fund V will go into China-based startups. Chu also tells VCJ that one of the top 10 U.S.-based VC firms has formed a strategic alliance with AsiaTech, essentially becoming an LP in the new fund, to increase its presence in China and leverage off AsiaTech’s experience in Asia. He declined to name the firm.
But Chu says that despite the increase of buyout activity in China from The Carlyle Group and others, venture firms have yet to significantly expand in Asia. He says that the alliance with the U.S. firm is an example of how more and more venture firms will soon enter Asian markets in which they have limited past experience.
AsiaTech was founded by Hanson Cheah and James Yao in 1997, with money from family owned telecommunications, technology and manufacturing conglomerates in Taipei and Hong Kong. The firm’s inaugural fund of $20 million was raised during the height of the Internet boom, and about 80% of it was invested in the United States. Chu says that the first fund had a return of six times the investor’s investments.
Among the high profile investments in its first fund was Eachnet, which was purchased by EBay in 2003 for $225 million in cash. When the new fund is closed, AsiaTech will manage about $300 million in assets.
– by Jerry Borrell from VCJ (VC journal – http://www.venturecapitaljournal.net/)
Crystal Ventures
It was expected to close late last month on the first commitment of its third fund, a $150 million Asian-centric fund.
Crystal also is looking to add to its team of six current general partners to replace Henry Wong and Howard Lee, who previously left to form Diamond TechVentures. The pair is raising a $50 million fund to invest in China.
Crystal Ventures co-founder Joseph Tzeng says that the departures of Wong and Lee were part of the evolution of the firm as it has transitioned over the last several months to concentrate more on investing in wireless, Internet and traditional media sectors and less on hardware and software IT deals. “Henry and Howard remain friends and we will support them in their [new firm],” says Tzeng, who, along with Crystal co-founder Daniel Kellogg, will sit on Diamond’s board.
Tzeng says that a media report that a third Crystal partner, John Hsin, is also leaving, is erroneous. However, Crystal has shut down its Singapore operations as it concentrates more on China. Hsin, who led the firm’s Singapore office, is currently opening a new office in Shanghai.
In addition to its new Shanghai office, the firm will open a new office in Beijing this year. Tzeng says that the firm has an interest in Korea and Southeast Asia.
Together with Crystal Ventures Fund I ($40 million) and Crystal Ventures Fund II ($160 million), the firm will manage assets of $350 million. LPs have included GIC SI, EDB of Singapore and TIF Ventures. Like the first two funds, the fund III will be Asian centric, investing in startups in the Pan-China region. Since its 1997 inception, Crystal Ventures has had offices in Cleveland, Palo Alto, Calif., Taipei, Singapore and Hong Kong. The first two funds focused mostly on Internet infrastructure-related startups, hardware and software and even some semiconductor companies.
Peter Liu, chairman of San Francisco based VC firm, W.I. Harper Group has a lot of dealings in China.