Despite the adverse impacts of the coronavirus crisis, GGV Capital has enjoyed a handful of initial public offerings (IPOs) of its portfolio companies, in which the global venture capital firm still owns shares worth about $1.5 billion.
To break down the numbers further, as many as six of its portfolio companies have hit the bourses to rake in capital since the fourth quarter of 2019. The most recent ones include Xpeng Motors’ $1.5-billion IPO on the New York Stock Exchange (NYSE) and BigCommerce’s $216-million Nasdaq IPO.
| Headquarters | Company | Date of listing | IPO location | Funds raised | Business |
|---|---|---|---|---|---|
| Zhuhai | WPS/Beijing Kingsoft Office Software | 2019-11 | STAR Market | 4.5 billion yuan ($659 million) | Kingsoft Offce is best known for its WPS Office software, a free alternative to Microsoft's software suites including Word and Excel. |
| Guangzhou | Ehang | 2019-12 | Nasdaq | $40 million | Ehang Holdings is a Chinese developer of autonomous drones. |
| Boston | DraftKings | 2020-04 | Nasdaq (Through a blank-check company, Diamond Eagle Acquisition Corp) | N/A | DraftKings is a daily fantasy sports contest and sports betting provider. |
| Shanghai & Santa Clara, California | Agora | 2020-06 | Nasdaq | $350 million | Agora is a real-time engagement API provider. |
| Austin | BigCommerce | 2020-08 | Nasdaq | $216 million | BigCommerce sells small and medium-sized businesses software that enables them to create and manage e-commerce websites. |
| Guangzhou | Xpeng Motors | 2020-08 | NYSE | $1.5 billion | Xpeng Motors is a smart electric vehicle maker that now markets a four-door sports sedan and a SUV under the Xpeng Motors brand. |
“This year has been a bit of a roller coaster ride,” Jixun Foo, managing partner at GGV Capital, told DealStreetAsia in an interview. “The stock market demonstrated a fairly dramatic reaction … The whole market – the tech market in particular – is hitting the roof.”
The technology sector of late has been witnessing significant traction with the pandemic prompting companies to adopt digitisation across the world.
“Obviously, there is a lot of euphoria. But digitisation behind small and medium-sized enterprises and their consumers is real. That’s why the market is kind of paying ahead,” said Foo.
The sector has been staring at a fierce competition as risk capital investors jostle to clock the right deal even as valuations maybe a tad high.
That probably explains why the market is “rewarding” players who are promoting the digitisation process, he said. Take Xpeng Motors’ stock price for instance. It jumped over 40 per cent on its debut date of trading on August 27.
Foo is one of the six managing partners leading investment efforts at GGV Capital, that manages a total of $6.2 billion across 13 funds.
Each year, the firm deploys around 80 per cent of an investment budget of about $600 million in China and the United States. The remaining is invested in emerging markets in Southeast Asia, India, Latin America, and Israel.
Last week, GGV Capital was looking at a new deal in India. The China-India standoff “doesn’t deter us from looking at India….. In fact, the withdrawal of Chinese capital is actually good for us because it makes us even more competitive in India,” said Foo.
GGV’s portfolio companies in China include prominent names such as Baidu, Boss Zhipin, Xpeng Motors, and Didi Chuxing. Meanwhile, in SEA and India, it has investments in Grab and Udaan, among others.
Edited excerpts of an interview with Foo:
