Cathay Innovation raises $320m for first vehicle

Alice Tchernookova
29 June 2017

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Cathay Innovation, Cathay Capital Private Equity's venture capital arm, has closed its first investment vehicle with $320m (€287m) in commitments.

The vehicle exceeded its target, originally fixed between €200-250m, a source familiar with the matter told unquote".

Co-founded by Denis Barrier and Cathay president Mingpo Cai in 2015, the fund received its first €100m commitment from BPI France and CDB Capital, which both contributed €50m each.

This initial contribution was quickly followed by a €22m ticket provided by Valeo, a France-based producer of auto parts, with other corporates following suit.

Launched in 2015, Cathay Innovation is Cathay's global venture arm. The firm has offices in San Francisco, Paris, Beijing and Shanghai, and is managed by an 11-strong international team looking to invest in the EU, Asia and North America.

Investors
BPI and CDB, the vehicle's first LPs, contributed more than a third of the fundraise with their original €100m commitment.

A large number of France- and China-based corporates contributed to the rest of the fundraise, including international businesses such as Michelin, Total, Groupe ADP, Groupe Artemis, BNP Paribas Cardif, Groupe Seb and Valeo.

Investments
The fund has already made 10 investments globally. Cathay Innovation has so far invested in Alkemics, Drivy, FollowAnalytics, Trifacta, Quantifind, IfChange, Shopal, Lechebang, China-based MeetYou (which has already been sold), and Pinduoduo, which is currently valued at $1.5bn.

Around 20-25 investments should be made in total, with three to be announced in the next few weeks, Cathay told unquote". Initial commitments will amount to $3-15m, mostly through series-B rounds aimed at helping companies grow internationally. The technology and digital sectors will be the fund's prime areas of investment.

Cathay said its investment strategy would largely focus on partnering with brands that are already well-established within the VC world, with plans to make a large number of co-investments. Cathay has already partnered with Accel Partners and Greylock for Trifacta, with Andreessen Horowitz for Quantifind, and with Sequoia China for Lechebang.

People
Cathay Innovation – Mingpo Cai (co-founder); Denis Barrier (managing partner, co-founder).