Richen Capital has held the first close of its fifth flagship fund at over 1 billion yuan ($140.8 million), as the Chinese investment firm targets to hit the final close of 2 billion yuan ($281.6 million) within the next 12 months.
China-based Richen Capital, which has over 10 billion yuan ($1.4 billion) in accumulated assets under management (AUM), set up Fund V to continue its focus on investments in growth-stage startups in the fields of digital technology, smart manufacturing, and related applications, said the firm in an official statement.
About 70% of its existing limited partners (LPs) invested in Fund V, said Richen Capital. It said the LPs of the first close include insurance companies, funds-of-funds (FOFs), privately-held corporations, and entrepreneurs.
Fund V attracted capital commitments from new LPs including a 12.5-billion-yuan ($1.8 billion) government-backed FOF named Anhui Province New-Generation IT Industry FOF. The FOF, located in eastern China’s Anhui Province, was launched in May 2023 to promote the provincial IT industry development.
“We’re at a perfect time for equity investments,” said Wang Tingfu, founding partner and chairman of Richen Capital.
“Companies that can weather through this period of slowing economic growth will be much stronger than those only staying afloat at the peak of the market. Valuations are also more reasonable in a market down cycle, effectively helping remove the froth that we typically see amid the market frenzy,” said Wang.
This fundraising update came months after Richen Capital built its first angel fund in May 2023 to focus on early-stage digital technology and smart manufacturing startups. Its debut angel fund is supported by multiple entrepreneurs and other LPs including the local government-backed Shanghai Angel Capital Guiding Fund.
Richen Capital has invested in over 80 companies since its inception in May 2015. Its portfolio companies include financial software services provider Wind Information; business data platform Qichacha; artificial intelligence (AI)-enabled fintech startup Shenqing Technology; and Haoxinqing, which offers online psychological wellness services in China.
With venture capital (VC) as its key strategy, the firm is also involved in mergers and acquisitions (M&As), private investment in public equity (PIPE) deals, and investment banking services. As of present, it manages five growth-stage VC funds, one angel fund, and over 10 special purpose vehicles.
Before Fund V, Richen Capital held the final close of its fourth growth VC fund at 1.5 billion yuan ($211.2 million) in July 2021 following a first close at 1.1 billion yuan in 2020.
Earlier, the firm announced the fundraising successes of its 900-million-yuan ($126.7 million) Fund III in 2018 and 500-million-yuan ($70.4 million) Fund II in 2016, respectively.