Ties That Bind - Bay Area Council Economic Institute

114
Ties That Bind
Mayfield Fund
Mirador Capital
New Enterprise Associates (Northern Light)
Sequoia Capital
W.I. Harper Group
W.R. Hambrecht Ventures
Walden International
Woodside Fund
IBM Venture Capital Group, based in Menlo Park, began moving aggressively into China in
2004, focusing initially on the emerging semiconductor and hardware sectors, but more recently
on software as well. More than 100 deals have been closed in the past two years. IBM’s strategy
focuses on investing in companies that complement its own objectives, in effect making its venture
arm a business development vehicle. Intel, which has invested in some 50 mainland and
Hong Kong companies since 1998, launched a $200 million Intel Capital China Technology
Fund in 2005. Sequoia Capital, which previously restricted its activities to Silicon Valley, also
announced establishment of a $200 million China fund last year. The China venture arm of San
Francisco-based life sciences firm Burrill & Company, Burrill Greater China Group (BGCG),
plans to raise $50–100 million in its current funding round. Accel Partners of Palo Alto and
IDG Venture Capital of San Francisco launched a China growth fund in September 2005 and
closed it three months later with $290 million from institutional investors. The fund will invest in
IT, health care and consumer technology startups, as well as emerging technologies. W.I
Harper, begun in 1993 as an advisory services arm of Walden International, has been active in
mainland China as in independent entity since 1996 and Harper chairman Peter Liu’s history in
greater China dates back to 1983, primarily through tech investments in Taiwan. Harper has
completed five funds totaling $250 million. A sixth fund, targeted to raise $150 million, is for the
first time open to institutional fund investment.
In May 2006, Sequoia Capital, DCM-Doll Capital Management and Legend Capital closed a
$30 million Series B venture financing of Worksoft Creative Software Technology Ltd., the largest
Chinese IT outsourcing provider to the U.S. and Europe, with a client list including IBM,
Oracle, Microsoft, Hewlett-Packard, General Electric and Sony. The investment is Sequoia’s first
through its newly-created China fund.
A partnership of Texas Pacific Group and Blum Capital Partners, Newbridge Capital was one
of the first private equity firms dedicated to investing in Asia. It raised its first fund in 1994, primarily
to make investments in Greater China. Today it has offices in San Francisco, Hong Kong
and Shanghai, in addition to Australia, India, Singapore and Tokyo. Newbridge’s more prominent
investments include its $150 million stake in Shenzhen Development Bank, an early investment
in computer maker Lenovo, and a planned $150–200 million investment in a Xinjiang
Guanghui Industry Co. onshore liquefied natural gas project in Guanghui. The project will liquefy
gas from PetroChina’s Turpan-Hami oilfield in Xinjiang.