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China’s LongRiver Investments closes debut fund on USD 385m

LongRiver Investments, a China-based venture capital firm established by the founding partner and former CEO of Ping An Ventures, has closed its debut fund on USD 385m, according to a briefing document seen by AVCJ. It will pursue a global mandate focused on the healthcare and technology sectors.

LPs include insurance companies, asset management companies, and funds-of-funds from Asia and Europe. Overseas insurers represent the largest LP constituency, although Ping An Insurance – the parent of Ping An Ventures – is not among them.

LongRiver achieved a first close of USD 300m in June 2022, implying a year-long extension to the fundraising period. The firm told Chinese media at the time of the first close that it wanted to raise as much as USD 500m.

Fundraising conditions began to deteriorate not long after – to the point that LongRiver’s offering is the only first-time fund launched by a Chinese manager to achieve a final close in the past 12 months. The new fund is also the second largest of 2024 to date after 5Y Capital, which closed its latest China vehicle on USD 800m in the first quarter.

A total of USD 1.4bn has been committed to US dollar-denominated China venture capital funds so far this year. Approximately USD 4bn was raised across 14 closes in 2023, down substantially on an average of USD 10.9bn for the prior five years, according to AVCJ Research.

Jiang Zhang established LongRiver in 2022 following a 10-year stint with Ping An Ventures. Before that, he worked for McKinsey & Company in Beijing, Philips in the Netherlands, and State Grid Xuji Electric in Beijing.

During Zhang’s tenure, Ping An Ventures backed about 40 companies across early and growth-stage rounds. Half went on to list in China or overseas, including medical software-as-a-service (SaaS) players ClouDr Group and B-Soft, outsourced pharmaceutical services provider WuXi AppTec, drug developer China Biologic Products, and data centre business Range Technology.

Non-Chinese companies made up two-fifths of the portfolio. Ping An Ventures backed the likes of Israel-based app developer IronSource, US online payments business Payoneer Global, and Israel-based multi-asset trading platform eToro. A partial exit from eToro last year returned approximately half the entire corpus of the fund that made the original investment.

LongRiver has a team of 15-20, with the partners and core investment team members, as well as post-investment specialists, coming from Ping An Ventures. It participates in angel through Series B rounds, with growth-stage opportunities addressed selectively. Ticket sizes are in the USD 5m-USD 10m range.

The firm claims to have evaluated 2,000 projects to date and completed 14 investments. In healthcare, it favours cutting-edge biotech, interdisciplinary medical technologies, and materials science advancements in pharmaceuticals and consumer healthcare. Areas of focus in technology include smart manufacturing, new energy materials, electric vehicles, and smart mobility.

Clinical-stage biotech players Sironax and Maxvax Biotechnology and medical technology start-up Ronovo Surgical feature among the initial batch of investments.