GGV Capital Separates to independently focus on Asia and USA

As political pressure mounts on American companies to limit investments in Chinese technology, US venture capital firm GGV Capital announced on Sept 21 that it plans to split its business into two, one focused on Asia and the other on the US.

According to a statement on social media X, GGV's U.S. partnership will invest primarily in North America, Latin America, Israel, Europe, and India, and cross-border deals in the United States from offices in Silicon Valley and New York. According to the company, its Asia partnership, headquartered in Singapore, will focus on China, Southeast Asia, and South Asia.

GGV's yuan-denominated funds will continue to be managed independently under its Chinese brand, Jiyuan Capital, it added. The separation will be completed by the end of the first quarter of 2024, GGV said. Its move follows Sequoia Capital, which in June said it is splitting its China and India/Southeast Asia businesses into two independent firms.

Economic challenges and geopolitical tensions have made fundraising and investment difficult in the world's second-largest economy and eaten into global venture funds' returns.

GGV said in the statement it is evolving against a "highly complex" operating environment.

In July, a U.S. congressional committee launched an investigation into American firms' funding of Chinese technology firms. Other names under consideration included GSR Ventures, Walden International, and Qualcomm Ventures. They have approximately $9 billion in assets under management and have supported companies such as Airbnb, ByteDance, and Alibaba in order to establish themselves as a cross-border venture capital firm.

According to its website, it has over 75 portfolio companies in China, including mobile phone maker Xiaomi, social media platform Xiaohongshu, and ride-hailing champion Didi.

China-focused investment firms, including venture capital, growth, and buyout funds, raised only $5.6 billion in US dollar funding this year, compared to $20.6 billion in total for 2022.