Source Code Capital, the venture capital (VC) firm behind ByteDance and Meituan, has raised $600 million for its dual-currency growth funds to focus on thematic opportunities around China’s artificial intelligence (AI) and going-global mega trends.
In its latest WeChat post, the Beijing-based VC announced its fundraising success with support from industry capital and a select group of its long-term financial investors, but the firm did not disclose their identities.
Source Code plans to deploy the fresh dry powder, denominated in both US dollar and Chinese yuan, into Chinese growth-stage startups focusing on AI advancements and going-global opportunities.
Specifically, the firm will invest in the AI computing power industry chain, covering the physical and software infrastructure required for AI to help address “bottleneck issues” that hinder its development as well as startups promoting the large-scale AI commercialisation.
Under the going-global theme, it will primarily invest in startups that leverage China’s strengths in developing intelligent hardware and software applications for the global market, said the firm.
Led by its founding partner Charlie Yi Cao, who was previously a vice president of HongShan, the new fund series is designed to have a five-year investment period, followed by an exit period of up to 20 years.
At a combined $600 million, the latest fund series is significantly smaller than the predecessor dual-currency fund series. In April 2021, Source Code announced the final close of its USD fund at $1 billion, followed by the final close of its fifth RMB fund at over 7 billion yuan ($984.1 million) in October of the same year.
Although its latest growth funds are smaller in size than the previous series, Source Code insisted on a longer exit period to meet its dedication to supporting entrepreneurs in the long run, said Cao. “The key reason is our great confidence in the Chinese economy and in the future growth potential of innovative companies from China.”
Cao said that Source Code will invest “selectively” in AI and going-global themes, which will have “a profound and lasting impact” on the global business landscape despite the many uncertainties around geopolitics and capital markets.
Besides its focus on growth venture deals, Source Code has an independently-operating early-stage investment platform, whose name can be directly translated to “Source Code Rhythm (源码律动),” led by founding partner Samuel Yungang Huang.
The fundraising update saw Source Code Capital’s total assets under management (AUM) reach approximately $7 billion after 11 years in operation. Founded in 2014, the Chinese VC has built a portfolio of over 300 companies, including TikTok-owner ByteDance, food delivery giant Meituan, and embodied intelligence upstart Unitree Robotics.
Its portfolio companies span industries such as AI & robotics, intelligent manufacturing, Internet & consumption, healthcare, and biotech. The firm invests across various funding stages from seed and early-stage to growth financing.
