2020-11-18 09:30:40

Future Capital Discovery Fund Closes US$187 Million Early-Stage Tech Fund


USD Fund IV closed in 7 months and was oversubscribed despite COVID-19 challenges

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(Hong Kong, 18 November 2020) – Leading early-stage venture capital firm Future Capital Discovery Fund (“Future Capital” or the “Firm”) announced the final closing of its fourth USD flagship fund, USD Fund IV (or the “Fund”) with US$187 million in committed capital. The Fund will continue to focus on investing in early-stage enterprise technology and game-changing consumer technology companies in the Greater China region.

In addition to the previous institutional investors, USD Fund IV welcomes several new endowments; the Fund represents their first allocation to an early-stage Chinese specialist fund. Other new LPs include prestigious global fund of funds, family offices, foundations and top-tier HNWI entrepreneurs from the United States, Europe and Asia Pacific.

“USD Fund IV marks a major milestone for Future Capital. We are appreciative of the trust our global LPs have placed in us. Despite the current environment, we closed the Fund ahead of schedule with a significant oversubscription, which validates our core investment thesis that digital disruption of traditional businesses is inevitable and will fuel the next decade of economic growth.” said Mingming Huang, Founding Partner of Future Capital Discovery Fund.

“With China’s accelerating industry digitalization, we see huge growth potential and incredibly strong demand for enterprise technologies that enable digitized work, business automation, smarter supply chains and logistics. As structural changes across the economy continue to create new investment opportunities, our capabilities and track record of sourcing proprietary deals will enable us to continue to support exceptional entrepreneurs and generate value for our investors” he added.

Future Capital’s fundraise was launched during the height of COVID in late February. By creating a fully virtual roadshow, Future Capital was able to effectively and efficiently reach a wide range of quality investors, resulting in a new fundraising record for the Firm.

Future Capital actively manages three USD and one RMB venture capital funds. With the close of USD Fund IV, Future Capital has over US$600 million of assets under management. Future Capital has invested in over 150 companies, including Li Auto (Nasdaq: LI), Niu Technologies (Nasdaq: NIU), Newborn Town (HKG: 9911), Sensors Data, Duckbill, Narwal, Encootech, Hose, and Taos Data. Despite the challenging market conditions in 2020, Future Capital assisted 52 of its portfolio companies to close subsequent funding rounds and invested in ten new innovative companies including Edgeworx, Treelab and iLabService. In addition, Li Auto (in which Future Capital was the company’s first investor) successfully listed on NASDAQ earlier this year and is currently trading at a market cap of ~US$30 billion. Future Capital invested in 7 out of 9 rounds in Li Auto’s subsequent financing throughout the past five years.

As of August 31, 2020, the Firm’s venture capital funds were on track to reach 8-10x return and a gross internal rate of return (“IRR”) of 45%-55%.