Dragonvest Partners has completed the initial closing for its second fund, Dragonvest Venture Partners II, which will earmark US$30 million for early-stage businesses.
An early-stage venture fund based in Shanghai, Dragonvest was established to address the gap that exists between Chinese entrepreneurs building early-stage companies and the international institutional capital that is flowing primarily to expansion and later-stage investments.
The firm makes investments in fabless chip design, digital media and medical device companies led by world-class entrepreneurs. Investments from the US$30 million fund will range from US$500,000 to US$2 million.
Dragonvest has established two strategic relationships. The firm will jointly review investment opportunities with Softbank China Venture Capital of Shanghai, with an eye toward co-investment. Dragonvest will also work with Waltham, Mass.-based Kodiak Venture Partners to help Kodiak's portfolio companies expand into the Chinese market by identifying partnerships and potential acquisition opportunities.
International venture capital and private equity has fueled a boom in financing activity in China in 2005 and 2006. According to Thomson Venture Economics and the National Venture Capital Association, venture capitalists invested US$531 million in 65 deals in China last year, more than twice as many as in 2002.