GGV Capital, a prominent venture capital firm managing $9.2 billion in assets globally, plans to separate its China and the US teams following scrutiny from the US government about the national security implications of the firm’s investments in Chinese artificial intelligence and semiconductor firms, according to a notice the firm sent to its investors on Thursday.
The move comes a few months after Sequoia Capital said it would separate its high-performing China affiliate from its US-based operations and just weeks after President Joe Biden issued an executive order to restrict the US firms’ investments in China.
The firm was put under review by a US congressional committee in July this year that aimed to look at the American firms which invested in Chinese technology companies. The other companies include GSR Ventures, Walden International and Qualcomm Ventures and others.
GGV, known for its investments in Airbnb and Slack in the US and Alibaba and Xiaomi in China, is one of several major VC firms that invest both countries using capital raised from American pension funds, endowments, and other institutional investors.
In a statement on social media platform X, the company said that investing locally through a global lens has been its guiding principle for the past 23 years, driving GGV Capital’s vision to support entrepreneurs who are making a positive difference around the world.
Changing Investment Landscape
The company said that over the last decade, the investment landscape has shifted significantly, and the operating environment has become highly complex. Against these new realities, GGV is also evolving.
“We are announcing that GGV will become two completely independent partnerships, with distinct firms and separate new brands. The US partnership, led by Managing Partners Glenn Solomon, Hans Tung, Jeff Richards, and Oren Yunger, will invest primarily in North America, Latin America, Israel, Europe, and lndia/US cross-border from its offices in Silicon Valley and New York,” the statement said.
It continued: “The Asia partnership, led by Managing Partners Jenny Lee and J ixun Foo, will invest primarily in China, Southeast Asia, and South Asia, from its headquarters in Singapore. The RMB funds will continue to be managed independently as before under its Chinese brand Jiyuan Capital, led by Managing Partner Eric Xu.”
The statement also said that the company’s vision to serve entrepreneurs is unchanged and the evolution of GGV, in creating separate partnerships, is in the best interests of investors, employees, and founders. This transition is targeted to be completed by the end of Ql 2024.
Meanwhile, a Reuters report, citing the company’s website, said that GGV 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 $5.6 billion in US dollar-denominated funding this year, compared to $20.6 billion in all of 2022, the report added.