China’s Winreal Investment, which mainly invests in the hard tech and digital tech industries, has announced the second close of its new RMB-denominated fund at 1.8 billion yuan ($249.4 million).
With the second close, the new RMB fund is already 50% larger than the 2020-vintage, 1.2-billion-yuan ($166.7 million) predecessor fund. Over 77% of existing limited partners (LPs) committed to the new fund, said Winreal in a post on its official WeChat account during the weekend.
Winreal said that the main LPs in the second close include Hangzhou Capital, a state capital investor in eastern China’s Hangzhou City; and Hangzhou Jintou Industry Fund Management, a Hangzhou government-backed fund-of-funds (FOF) that counts HongShan and IDG Capital among its fund portfolio.
A subsidiary of the city’s state-owned Zhejiang Provincial Financial Development also made a sizeable contribution.
The new fund, whose Chinese name can be translated into “Rongteng 5G Industry Fund II,” focuses on investments in the new-generation information tech industry, said Winreal.
The fund looks to invest in opportunities of turning advanced scientific and technological results into businesses, the firm said. It added that the fund targets to promote the development of “emerging industries with strategic importance” by connecting them with industry capital and government funds.
Huang Jinping, Chairman and founding partner of Winreal, is of the view that hard tech and digital tech have become the most important strategic industries for China in the past few years and that they will remain so in the following years to come.
“The future development of China must be tech-driven and innovation-driven,” said Huang, pointing to the increased focus of the country’s investment circle on semiconductors, domestic replacement, and digitalisation, and the US sanctions against Chinese firms like ZTE Corporation and Huawei Technologies.
The second close of Rongteng 5G Industry Fund II came about one year after Winreal announced the first close at 1.3 billion yuan ($180 million). Winreal initially targeted to raise no more than 2 billion yuan ($277.1 million) for the fund, with its planned final close before the end of 2022.
Chinese state-owned automaker SAIC Motor and UOB Venture Management, a wholly-owned subsidiary of Singapore’s United Overseas Bank Limited, both subscribed to its first close.
Hou Weigui, founder and Chairman of Chinese telecom group ZTE, also invested in the fund. Winreal’s co-founders Huang Jinping and Liu Hongchun previously held senior positions at ZTE.
As of March end, Rongteng 5G Industry Fund II has made a total of 11 investments since it started deploying capital in December 2022. Nine of the 11 deals are venture capital (VC) investments, of which four have already completed follow-on financing.
One of the fund’s portfolio companies, a Chinese acoustics and dynamics test solutions provider named P&R Measurement Technology, applied in June for an initial public offering (IPO) on Shenzhen’s startup board ChiNext.
Founded in 2015 with offices across Chinese cities like Shanghai, Beijing, and Hangzhou, Winreal has previously invested in companies including big data and artificial intelligence (AI) unicorn MiningLamp Technology; quadruped robot developer Unitree Robotics; cloud computing startup BoCloud; and JustPower Technology, which offers engine systems for hydrogen industrial vehicles.