Temasek-backed InnoVen Capital, a venture debt firm, launches its second China fund with a target fund size of US$250 million ($334.57 million).
The InnoVen China Fund II has completed its initial close of about US$130 million, and will be a USD-RMB dual currency fund. This follows its first China fund, launched in 2021 with a fund size of less than US$100 million, which achieved its first equity exit in 2023.
The anchor investor of InnoVen’s China Fund II is InnoVen Capital, which is a joint venture between Seviora, a wholly owned subsidiary of Temasek Holdings, and United Overseas Bank U11 (UOB). Other investors include local government agencies, and Chinese industrial investment institutions located in the Yangtze River Delta area and central and western regions.
“With the collective backing of both USD and RMB limited partners, InnoVen Capital is committed to expanding its footprint in China, focusing on providing venture debt financing to high-growth and innovative startups,” the release notes.
InnoVen has participated in China’s venture debt market since 2017, with tie-ins with over 100 startups and cumulative disbursements exceeding US$400 million. According to the venture debt firm, of which nine companies became unicorns, and six were successfully listed.
InnoVen’s first China Fund was established in November 2021, and it has invested in over 20 high-growth startups including Mininglamp Technology, NextVPU, CBMG, Moodytiger, ANXIN, Casstime, Weiyun and Autowise.ai.
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InnoVen’s China Fund I has achieved a distribution to paid-in, or measure of the cumulative investment returned to the investor relative to invested capital, of 13%. Almost two-thirds of the portfolio companies have successfully secured subsequent rounds of financing. The China Fund I achieved its first equity exit in 2023.
