October 14, 2015
China’s third largest private equity firm, China Science & Merchants Investment Management Group (CSC), raised $400 million to invest in startups on AngelList, the world’s largest marketplace for startup investing and jobs. This $400 million may not look like a big amount for growth capital stages and VC firms, but this fund is the world’s largest fund dedicated to early-stage startups. China Science & Merchants Investment Management Group (CSC), founded in 2000, is a preeminent private investment firm in China with US $10 billion (RMB ¥ 60 billion) of capital under management. It will be investing in AngelList via its new venture capital firm, CSC Upshot.
Until now, AngelList has raised $205 million across 650 startups including Shyp, Luxe, Sprig and Uber. This $400-million fund is definitely a big milestone for AngelList. The money will be invested by CSC Upshot via syndicates on AngelList. Syndicates allow investors to co-invest in deals led by experienced angels and VCs. CSC’s participation in syndicates will not only make the investment larger but also faster.
Naval Ravikant, CEO and Co-founder of AngelList said to WSJ, When it comes to investing in early-stage companies, $400 million gets you into a lot of them: more than a thousand. And any one of them could be the next Uber Technologies. Indeed, one of the first companies on AngelList, in its earliest days, was Uber. In the first year, AngelList will disperse about $20 million of the money, ramping up to $50 million a year in subsequent years. This is just the beginning. $400 million is just the tip of the spear. Unlike a normal venture fund, we never stop. The CEO also mentioned that the company was offered a funding of $1 billion in the past. However, it wasn’t considered since the amount was too much. AngelList plans to spread the $400-million fund across six to eight years.
AngelList also made a couple of other announcements. It launched AngelList SPVs for late-stage investments. AngelList SPVs will allow early-stage investors to raise money for late-stage startups. The AngelList SPVs are meant for VCs and angels investing in pro ratas and special opportunities. SPVs can also request capital from funds like CSC Upshot. AngelList also launched an iOS app for AngelList jobs, which will enable candidates to apply for jobs in around 8000 startups.
About CSC Upshot:
CSC Upshot is based in the US and is independent of AngelList. Its General Partners, Huoy-Ming Yeh and Veronica Wu, are both engineers with degrees from MIT and Berkeley. They have had long careers in technology and venture capital, including work at Tesla, Apple, SVB Venture Capital and PacRim Venture Partners.
The fund’s largest limited partner is CSC Group. Founded in 2000, it is one of China’s three largest private equity firms, with $12B under management. Their investing areas include information technology, new materials and clean energy.
CSC Group’s founder, Mr. Shan Xiangshuang, is the Co-chairman of the China Venture Capital Association and regarded as a pioneer in the Chinese venture capital space. Their US venture capital arm is led by Tom Cole, a former startup CEO and General Partner at Trinity Ventures, with engineering and MBA degrees from Yale and Stanford.