Chinese VC Firm MSA Capital Reaches First Close For Second China Fund

Chinese venture capital firm MSA Capital has reached the first close for its second China-focused fund, MSA China Fund II, at US$197 million to invest in areas like artificial intelligence (AI), shows a regulatory document filed with the SEC last week.

According to the document, the new fund, which targeted to raise an aggregate of US$250 million, already received capital commitments from 13 limited partners. It kicked off the first sale on March 19, and it was rebranded from "Magic Stone Special Opportunity Fund VI."

MSA Capital, fully known as Magic Stone Alternative Investments, was founded by Jenny Zeng Yu in May 2014 with over US$1 billion under management. The Beijing-based company primarily finance companies in areas like AI, genomics, mobility, and software as a service (SaaS). Its portfolio companies include ride-hailing firm Uber, Chinese bike-sharing unicorn Mobike, on-demand local services firm Meituan.com, intelligent driving solutions provider Fabu Technology, and Yidu Cloud, a software developer specialized in medical data management.

The company, along with Hillhouse Capital Group, led a US$31 million series B1 financing round in Chinese community group buying e-commerce platform Songshupinpin.com in late February. MSA Capital also poured money into a US$30 million series A round in Songshupinpin.com in November 2018.

The new fund comes after a series of China-focused investment vehicles raised since the start of 2019. California-based venture capital firm Tsingyuan Ventures reached the final close for "Tsingyuan Ventures I" at US$51.71 million in early March to invest in technology companies in the United States and China.

Primavera Capital Group, a China-based investment firm specialized in private equity and special situations, also collected up to US$75 million for "Primavera Capital Fund III" in late February. At roughly the same time, Tiantu Capital, a Chinese investment firm specialized in the consumer sector, closed its debut angel fund at RMB500 million (US$74.76 million) to further explore early-stage investment opportunities in China.

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