GGV Capital, a Silicon Valley venture capital firm, is splitting into separate businesses that will focus on Asia and US. This comes three months after Sequoia Capital took a similar step in response to increasing political pressure from American tech investors who are being urged to pull out of China.
People with direct knowledge on the subject expect that the separation of Singapore’s operations from its US headquarters in Menlo Park, California, and New York will be completed early next year.
GGV, a Chinese investment firm with around $9 billion in assets, according to PitchBook has stakes in many of China’s leading tech companies, including Alibaba, TikTok parent ByteDance and ride-hailing services DiDi. Portfolio companies in the US include home rentals website Airbnb, business messaging platform Slack, and fintech Affirm.
The split decision comes at a time when cooled relations have been experienced between Washington and Beijing, and a fiercer technology arms race has limited the options for US investors who have made money for years betting on China’s booming tech sector.
GGV’s investment portfolio has been under close scrutiny over the last six months. The US House of Representatives Committee on the Chinese Communist Party wrote to GGV in July asking for information about the firm’s holdings in China.
GGV invested in Megvii which produces facial recognition software. Michael Gallagher was the Republican chairman of the congressional committee who pointed out that Megvii had “actively supported the surveillance of Uyghurs”, an ethnic minority in western Xinjiang Beijing is widely accused of repressing.
In August, President Joe Biden issued a executive order to stop the flow of US money into Chinese technology sectors which could bolster China’s national security. This includes advanced chips, AI and quantum computing.
Sequoia announced on June 1 that it was separating its China and US arm. This ended a relationship of two decades, widely considered as Silicon Valley’s best effort to build up a global venture business. HongShan, the Chinese arm of Sequoia Capital, opened an office in Singapore this year.
GGV Asia will be based also in Singapore. This city has been attracting several China-focused venture capital and private equity groups in recent times.
In the last few years, Chinese fund managers have opened or expanded offices in the city-state of south-east Asia. These include Hillhouse, Boyu Capital, and Shunwei Capital. They have built their reputations by making big bets in Chinese tech startups.
After the split, GGV will have a US-based company led by Glenn Solomon. Hans Tung, Jeff Richards, and Oren Yonger. According to sources with knowledge of the situation, the Asia business will be headed by Jenny Lee and Jixun FOO, who will continue to make investments in China and the rest of Asia.