GSR Ventures Closes $400 Million Fund for Early Stage Startups

(Bloomberg) -- GSR Ventures, a Chinese private equity firm that was an early backer of ride-hailing giant Didi Chuxing, has closed a new $400 million fund to invest in technology startups.

Fund VI, which is denominated in U.S. dollars, will focus on early stage investments, Managing Director James Ding told Bloomberg Television. GSR manages about $2 billion of funds and is also a backer of Ofo, the pioneering bike-sharing startup, and food-delivery service Ele.me.

GSR’s new fund comes at a difficult time for China’s startups and venture capitalists amid a slowing economy, intense competition and a central government that is imposing more of its will on the country. Being cashed up could help the firm take advantage of opportunities in advanced technologies such as artificial intelligence.

“It was about $400 million,” Ding said of the fund. “We only invest in seed and A rounds with a little bit of B round so that’s a good size for us to invest about two years.”

GSR’s other investments include Inke, a live streaming service, as well as Horizon Robotics.

Ding said there’d been a cooling of China’s venture capital market, which he characterized as more of a correction than a freeze, that would stabilize valuations and help investors that were able to raise funds.

“I would just say it’s back to cooler weather from ‘too hot,’” he said. “Since we’re just exiting summer, it’s about time we cooled down a bit, which is good for the industry.”

To contact Bloomberg News staff for this story: David Ramli in Beijing at dramli1@bloomberg.net

To contact the editors responsible for this story: Robert Fenner at rfenner@bloomberg.net, Edwin Chan

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