BAI Capital targets China’s globalizing startups with fresh $700M fund

BAI Capital, the storied China-focused venture investment firm that was formerly known as Bertelsmann Asia Investments, has raised $700 million to back Chinese companies that are part of the country’s structural reform as well as those expanding overseas.

The announcement follows on the heels of the closing of several other big-ticket funds, quelling speculation that foreign capital for Chinese tech is drying up amid a slowing economy. Sequoia Capital China recently snagged $7 billion to bet on Chinese tech companies at all stages. Qiming Ventures raised $3.2 billion. And IDG Capital banked $900 million.

BAI Capital was founded in 2008 as an investment arm of German media mogul Bertelsmann and has surged to become one of the top venture players in China with a portfolio of over 200 tech companies. Its notable investments include electric vehicle upstart Nio, Southeast Asia’s popular livestreaming app Bigo, and China’s shared bike pioneer Mobike, which was acquired by Meituan.

The latest close marks the first time that BAI Capital has brought in external limited partners, including sovereign wealth funds, large insurance companies, internet giants, funds of funds, on top of capital from its parent Bertelsmann.

The new fund, according to BAI’s announcement, focuses on helping Chinese companies from retail, fintech, content, media, as well as the red-hot areas of web3 and metaverse that are expanding globally. BAI is setting up new offices in Singapore and Berlin.

At the same time, the fund will also look for domestic opportunities in deep technologies like renewable energy, autonomous driving, and software-driven industrial upgrade solutions.

Global expansion is no small feat for any startup, not to mention Chinese businesses that are at risk of getting snarled in rising geopolitical tensions. BAI Capital’s founding partner Annabelle Yu has this to say in a statement:

“BAI Capital will continue to leverage Bertelsmann’s enormous global network in media, education, and service, especially its deep influence in Europe, and join hands with more limited partners to play to BAI’s unique advantage. Against an increasingly complicated political and economic environment, we will do our best to serve entrepreneurs with global ambitions and help them achieve success amid international competition and cooperation.”