Home Feature News One other high Silicon Valley investor is splitting off its China enterprise as stress mounts | CNN Enterprise

One other high Silicon Valley investor is splitting off its China enterprise as stress mounts | CNN Enterprise

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One other high Silicon Valley investor is splitting off its China enterprise as stress mounts | CNN Enterprise

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CNN
 — 

GGV Capital, a outstanding Silicon Valley enterprise capital agency, has change into the most recent massive investor to interrupt up its US and China operations into separate corporations as tensions between the 2 nations over tech and geopolitics proceed to rise.

The agency introduced Thursday that it could divide its enterprise into two “fully unbiased” companies with separate new manufacturers, which haven’t been revealed.

In accordance with the corporate, one facet will think about North America, Latin America, Europe, Israel and cross-border US-India offers, led by groups in California and New York by managing companions Glenn Solomon, Hans Tung, Jeff Richards and Oren Yunger.

The opposite facet will give attention to China, Southeast Asia and South Asia, run from its headquarters in Singapore, by managing companions Jenny Lee and Jixun Foo.

GGV’s current Chinese language yuan-denominated funds “will proceed to be managed independently” underneath its Chinese language model, Jiyuan Capital, it mentioned.

In an announcement, the agency attributed the choice to the truth that “during the last decade, the funding panorama has shifted considerably, and the working setting has change into extremely complicated.”

“Towards these new realities, GGV can be evolving,” it added, with out elaborating additional.

The transition is predicted to be accomplished by the tip of the primary quarter of subsequent yr.

Jenny Lee, managing partner of GGV Capital, at a conference in Singapore in September. Lee will co-lead the Asia side of the business as it becomes its own firm, according to GGV.

GGV Capital has roughly $9.2 billion in property underneath administration. The agency is understood for backing tech corporations all over the world, reminiscent of Alibaba (BABA), Airbnb (ABNB), Slack, TikTok proprietor ByteDance and Chinese language ride-hailing supplier Didi.

The transfer comes as US-China tensions proceed to have an effect on how companies function internationally’s high two economies.

Final month, the Biden administration introduced it could prohibit investments by US enterprise capital and personal fairness companies, in addition to joint ventures, in Chinese language synthetic intelligence, quantum computing and semiconductors.

The manager order will exacerbate a stoop in offers between america and China, and ship a “main blow” to Chinese language startups, analysts and buyers beforehand instructed CNN.

Requested whether or not the US order or wider geopolitical tensions had factored into its resolution, GGV Capital declined to remark.

The agency has not too long ago come underneath larger scrutiny from US lawmakers.

In July, a US Home committee mentioned it had despatched letters to 4 funding companies, together with GGV, “expressing critical concern and demanding details about the companies’ investments” in synthetic intelligence, chips and quantum computing corporations in China.

One funding named was a GGV cope with Megvii, an AI developer. The corporate is greatest recognized for its facial recognition software program, and has lengthy been accused of human rights violations towards Uyghurs and different members of Muslim minority teams in China’s Xinjiang area.

Megvii was added to a US commerce blacklist in 2019 over the difficulty and beforehand instructed CNN that there have been “no grounds” for that call.

The continuing stress has already led different companies to separate their US and Chinese language companies this yr.

In June, high international enterprise capital agency Sequoia introduced an identical resolution to cordon off its operations into three entities that cowl Europe and america; China; and India and Southeast Asia. Its China enterprise will probably be run independently underneath its Chinese language title, Hongshan.

Leaders of the Silicon Valley agency mentioned on the time that it had “change into more and more complicated to run a decentralized international funding enterprise.”

In August, Dentons, a number one regulation agency, additionally mentioned its China unit would change into a standalone authorized entity, in response to new Chinese language rules associated to information privateness, cybersecurity and capital management.

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