China VC Weekly: New Funds and Edtech
In last week’s China VC news, Shanghai’s Meridian Capital announces the closing of its 2.12 billion yuan Fund VI, Edtech firm Zhangmen submits documents for a New York IPO, and China Merchants Bank joins hands with blockchain developer Nervos Foundation on a blockchain-focused fund.
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Meridian Capital closes Fund VI
Shanghai-based venture capital firm Meridian Capital has announced the final tranche of its yuan-denominated Fund VI, closing at 2.12 billion yuan ($329 million), and pushing the total assets under the firm’s management to roughly 8.5 billion yuan.
Meridian Capital’s Fund VI will focus on investing in technology, new retail and corporate service startups, the company said in a statement on Thursday.
Currently, the firm manages two Singapore dollar-denominated funds and six yuan-denominated funds, and focuses on investing in early and growth-stage startups in mobile internet, technology, media and telecommunications.
About Meridian Capital
Founded in 2008, Meridian Capital claims to have invested in more than 190 companies, 17 of which have begun IPO procedures.
Edtech firm Zhangmen submits application for New York IPO
Chinese online education firm Zhangmen has submitted an application to the US Securities and Exchange Commission to list on the New York Stock Exchange. The company has notably skipped listing in its home market, where regulators have increased scrutiny of e-learning platforms amid complaints about improper business practices.
In the prospectus filed on Wednesday, the Shanghai-based company did not disclose how many American depositary shares it will offer. The company did, however, set a placeholder sum of $100 million. Earlier this year, Bloomberg reported that the company aims to raise about $300 million in the planned US IPO.
The company plans to use the proceeds to expand its product lineup and improve technology infrastructure, as well as for general brand promotion, according to the prospectus.
About Zhangmen
Founded in 2005, Zhangmen began by offering offline after-school tutoring services. It later shifted its focus to online education for school children in 2014. The company said that it currently generates most of its revenue from its core online one-on-one and small-class after-school tutoring services for major K-12 academic subjects, with the total number of paying users reaching 544,813 as of the end of 2020, according to the prospectus.
China Merchants Bank joins hands with Nervos Foundation on blockchain-focused fund
One of China’s major banks, China Merchants Bank has reportedly partnered with blockchain developer Nervos Foundation on a $50 million blockchain-focused investment fund. This “InNervation Fund” will mainly invest in early and growth-stage startups that apply blockchain technology to areas such as decentralized finance protocols, distributed ledger platforms and non-fungible token-related projects, Nervos said in a statement on Tuesday.
Although cryptocurrencies like Bitcoin saw a steep slump this week after a warning from the People’s Bank of China that the digital tokens cannot be used as a form of payment, there is still enthusiasm for blockchain technologies in the market.
The InNervation Fund will distribute the capital over three years, with startups being able to receive initial investments of between $200,000 and $2 million. The fund will keep an eye out for promising startups that have long-term plans to integrate with the Nervos ecosystem, according to the company’s statement.
Apart from receiving investments, funded startups will also gain access to Nervos assets, including a decentralized exchange and an Ethereum Virtual Machine-compatible tool called Polyjuice, which enables developers to port their Ethereum-based decentralized apps to the Nervos Common Knowledge Base, a public permissionless blockchain network where crypto assets can be stored safely and permanently.
About Nervos
China-based Nervos runs an open-source platform called the Nervos Network that helps developers create blockchain-based technology.
