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Singapore venture financier InnoVen eyes China’s technology start-ups after US$130 million fundraising

  • The Singapore-headquartered venture debt company completes first close for its dollar-yuan dual currency China fund
  • The fund will zero-in on industries such as deep tech, enterprise services, consumer, and healthcare, while adhering to ‘ESG investment principles’

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Pedestrians along the Bund in Shanghai, China. Photo: Bloomberg
Yuke Xiein Beijing

InnoVen Capital Group, a leading Southeast Asian venture debt provider, has bulked up its cash hoard to finance China’s early-stage companies, as challenges ranging from China’s slow economic recovery to regulatory uncertainties are limiting start-ups’ access to funding.

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The Singapore-headquartered venture debt company, announced on Friday that it had completed a US$130 million first close for its second China fund, which is a dollar-yuan dual currency fund with a total target size of US$250 million.

The anchor investors for InnoVen Capital China Fund II are InnoVen Capital Group, a joint venture between asset manager Seviora Holdings and United Overseas Bank (UOB), and “two local Chinese government entities” the venture debt firm said in a statement, without providing further details. Seviora is a wholly owned subsidiary of Temasek, Singapore’s sovereign wealth fund and UOB is one of Singapore’s three “big local banks”.

Venture debt is a loan to an early-stage company to help the business boost liquidity in between equity financing rounds. InnoVen Capital structures its deals using a combination of debt and equity financing, and a single ticket size is usually under US$20 million, the company wrote in a note.

Technicians producing fibre lasers at a factory of Wuhan Raycus Technologies in Huangshi, in China’s central Hubei province. Photo: AFP
Technicians producing fibre lasers at a factory of Wuhan Raycus Technologies in Huangshi, in China’s central Hubei province. Photo: AFP

Data provider Preqin said venture capital investment in China contracted over 7 per cent in 2023 to below US$70 billion, hitting a four-year low as investors, spooked by regulatory uncertainties and lacklustre economic recovery, steered away from the country’s start-ups.

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InnoVen’s second China fund was launched in 2023, and is expected to fully close in early 2025. The first China fund closed in March 2023, with a total size of close to US$100 million.

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