Morningside Ups The Ante For China Venture With $660M In New Capital

Morningside Ventures, set up in 1986 by the Chan real estate family owning Hong Kong’s Han Lung Group, has closed a new China-focused fund for TMT investments. This fourth fund follows a $280 million third fund in February 2014, and brings the firm’s total assets under management to $1.5 billion. The raise was structured as a $400 million core fund, separate from a $200 million fund and a $60 million fund for growth and later stage investments.

This strategy reflects an increased focus among China VC firms on growth and late-stage deals. As reported by Silicon Dragon, GGV Capital’s plans to raise additional funds also include separate vehicles for startups and emerging companies at various stages of growth. Additionally, DCM, Qiming Venture Partners, Banyan Capital and Shunwei Capital Partners have all raised either top-up funds for existing investments, or opportunity funds for new companies seeking expansion rounds. The trend reflects VCs holding onto portfolio companies for a longer time rather than urging them to go public in a not-so-satisfactory result.

Morningside, which was spun out of its family office parent by 2008, invests in private equity and venture capital in Europe, North America, and APAC, and has racked up an impressive track record. With this latest fund, the firm plans to continue making early stage investments across many China’s hottest sectors such as Internet, media, entertainment, finance, cleantech, life sciences, e-commerce, social networking and education.

In the midst of anxiety about downturns in China’s market, Morningside received participation from all existing LPs that had backed its third fund, including university endowments, pension funds, sovereign wealth funds and family offices in Europe and the U.S.

Richard Liu, Managing Director of Morningside, was awarded “Best VC Deal” by Silicon Dragon in 2013 for his lead investments in popular smartphone maker Xiaomi and social messaging platform YY.