China Data Insights (Mid-Year 2020)

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Venture capital funds outraised private equity in 1H 2020, even as overall fundraising slowed

Fundraising for China reached USD12.7b in 1H 2020, despite COVID-19-induced lockdown policies that restricted in-person investor meetings and pressure from LPs to conserve liquidity. While overall fundraising dipped, venture capital (VC) fundraising reached USD8.5b, a 57% year-over-year increase. Veteran firms accounted for the largest funds in 1H 2020 across strategies, including  SD1.1b for Qiming Venture Partners, USD1.2b for CDH Investments’ latest mezzanine fund, and USD2.8b for a late-stage venture fund from Sequoia Capital. Overall fundraising for China peaked in 2018, and many firms still have dry powder, while GPs report to EMPEA that the groundwork for many 1H fund closes predated the pandemic. The full impact of COVID-19 on 2020 fundraising efforts for newer GPs may depend on travel restrictions and the more widespread adoption of digital due diligence.