By Kane Wu
(Reuters) -U.S. venture capital firm GGV Capital said on Thursday it plans to split its business into two, with one focused on Asia and the other on the U.S., as political pressure mounts on American companies to limit investments in Chinese technology.
GGV said in a statement on social media X its U.S. partnership will invest primarily in North America, Latin America, Israel, Europe, India, and U.S. cross-border deals from offices in Silicon Valley and New York.
Its Asia partnership, headquartered in Singapore, will focus on China, Southeast Asia and South Asia, the firm said.
GGV’s yuan-denominated funds will continue to be managed independently under its Chinese brand Jiyuan Capital, it added.
The separation will be completed by the end of the first quarter of 2024, GGV said.
GGV’s move follows Sequoia Capital, which in June said it is splitting its in China and India/Southeast Asia businesses into two independent firms.
Economic challenges and geopolitical tensions have made fundraising and investment difficult in the world’s second-largest economy, and eaten into global venture funds’ returns.
GGV said in the statement it is evolving against “highly complex” operating environment.
The firm was put under review by a U.S. congressional committee in July that aimed to investigate American firms over their funding of Chinese technology companies. GSR Ventures, Walden International and Qualcomm Ventures were among the other names under review. [nL1N3952XA]
GGV Capital, which has around $9 billion in assets under management, has backed companies such as Airbnb, ByteDance, and Alibaba <9988.HK> to establish itself as a cross-border venture capital company.
It has over 75 portfolio companies in China, its website shows, 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, only raised $5.6 billion in U.S. dollar-denominated funding this year, compared to $20.6 billion in all of 2022.
(Reporting by Kane Wu in Hong Kong and Seher Dareen in Bengaluru; additional reporting by Roxanne Liu in Beijing; Editing by Shweta Agarwal and Varun H K)
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