Fidelity’s investment arm Eight Roads sees hunger for China tech-focused funds
Growing number of China deep tech start-ups supports demand for US$275 million China tech-focused fund, says Eight Roads.
Chinese technology companies are showing increasing sophistication in innovating deep technology that caters to the needs of the domestic market, sparking growing investor demand for China-dedicated technology funds.
Jarlon Tsang, Asia managing partner for Eight Roads, which is the proprietary investment arm of Fidelity International, said he had observed a gradual deepening of the Chinese venture capital market over two decades after venture investing started in country in the mid 1990s. In May, Eight Roads launched its US$275 million China tech fund, which invests in early stage fintech, consumer tech and enterprise tech.
“We are seeing true innovation is happening in China. And the current generation of big technology groups such as Meituan Dianping, Alibaba, Tencent are demonstrating how they have their own ideas about what innovations are suitable for China,” Tsang said.
Dedicated tech funds represent a leap forward in increasing specialisation from China country-focused funds, a domain that has been drawing US dollar investors’ money in sizes of billions of dollars managed by both private equity and venture capital firms.
Tsang said the breadth of the Chinese technology sector has grown so that today there is enough diversity of deep technology companies – ranging from artificial intelligence, autonomous driving technology, enterprise technologies, or internet payment services – that can better support a China tech-focused fund of its own.