China’s Tiantu Capital, an over-20-year-old equity investment company, has closed a new RMB-denominated fund at 1.5 billion yuan ($218.3 million).
For the RMB fund, Tiantu Capital roped in Chinese state capital investors including Haicheng Digital Industry Fund and the 10-billion-yuan ($1.5 billion) Hainan Free Trade Port Fund from the island province of Hainan in southern China.
Their combined commitment represents the biggest capital contribution that a consumer-focused fund has raised from China’s state capital managers in recent five years, said Tiantu Capital in a statement on Monday, although it did not disclose the size of the commitment.
The RMB fund also secured commitments from listed companies, industry capital investors, banks, securities firms, family offices, and other institutional investors, said the firm.
With the new dry powder, Tiantu Capital plans to double down on its investments in innovations in China’s consumer sector. Additionally, the firm will focus on supply chain innovations, digital solutions, cross-border businesses, and biotechnology.
“China remains the world’s largest consumer market with undoubted growth moving forward. We continue to be bullish on the country. Having experienced a new round of reshuffles, China’s consumer market still has ample room for emerging entrepreneurship and innovation opportunities across various product categories,” said Pan Pan, managing partner of Tiantu Capital, in the statement.
“Tiantu Capital will leverage its market know-how and resources to help startups build their competitiveness in product innovations and operations efficiency. The goal is to achieve long-term sustainable growth for these businesses,” said Pan.
Tiantu Capital currently manages over 25 billion yuan ($3.6 billion) across eight RMB funds and three US dollar funds with offices across Shenzhen, Shanghai, Beijing, and Hong Kong.
Founded in 2002, the firm has built a portfolio of more than 200 companies including China Feihe, the country’s largest infant milk producer, duck-made packaged food maker Zhou Hei Ya International, teahouse chain operator Nayuki, and Shenzhen Pagoda Industrial Group, the biggest fruit retailer in China. All four companies are listed on the Hong Kong stock exchange.
It is also an investor in China’s rising coffee brand Saturnbird Coffee, hotpot and barbecue ingredients supermarket chain Guoquan Shihui, artificial intelligence (AI)-based drug development firm Xbiome, and social e-commerce app Xiaohongshu, which is known as China’s answer to Instagram.