Hong Kong
CNN
—
GGV Capital, a major Silicon Valley venture capital firm, has become the latest major investor to split its U.S. and China operations into separate companies as tensions between the two countries over technology and geopolitics continue to grow.
The company announced Thursday that it would split its operations into two “completely independent” companies with separate new brands, which were not revealed.
According to the company, part will focus on North America, Latin America, Europe, Israel and U.S.-India cross-border deals, led by teams in California and New York by managing partners Glenn Solomon, Hans Tung, Jeff Richards and Oren Yunger. .
The other part will focus on China, Southeast Asia and South Asia, led from its headquarters in Singapore, by managing partners Jenny Lee and Jixun Foo.
GGV’s existing funds, denominated in Chinese yuan, “will continue to be managed independently” under its Chinese brand, Jiyuan Capital, it said.
In a statement, the company attributed the move to the fact that “over the past decade, the investment landscape has changed significantly and the operating environment has become very complex.”
“Faced with these new realities, GGV is also evolving,” he adds, without further details.
The transition is expected to be completed by the end of the first quarter of next year.
Huiying Ore/Bloomberg/Getty Images
Jenny Lee, managing partner of GGV Capital, at a conference in Singapore in September. Lee will co-lead the Asian side of the business as it becomes its own company, according to GGV.
GGV Capital manages approximately $9.2 billion in assets. The company is known for supporting technology companies around the world, such as Alibaba (BABA), Airbnb (ABNB), Slack, ByteDance, owner of TikTok, and Didi, Chinese ride-sharing service provider.
The move comes as tensions between the United States and China continue to affect the way businesses operate in the world’s two largest economies.
Last month, the Biden administration announcement it would restrict investments by U.S. venture capital and private equity firms, as well as joint ventures, in Chinese artificial intelligence, quantum computing and semiconductors.
The decree will exacerbate the crisis in agreements between the United States and China and deal a “hard blow” to Chinese startups, analysts and investors. told CNN.
He was asked if the Whether the US order or broader geopolitical tensions factored into its decision, GGV Capital declined to comment.
The company has recently come under closer scrutiny from U.S. lawmakers.
In July, a committee of the United States House of Representatives said it had sent letters to four investment companies, including GGV, “expressing serious concerns and demanding information on the companies’ investments” in artificial intelligence, chip and quantum computing companies in China.
One of the investments cited was a GGV deal with Megvii, an AI developer. The company is best known for its facial recognition softwareand has long been accused of human rights violations against Uyghurs and other members of Muslim minority groups in China’s Xinjiang region.
Megvii was added to a US commercial blacklist in 2019 over this issue and previously. told CNN that there were “no grounds” for this decision.
The continued pressure has already led other companies to separate their U.S. and Chinese operations this year.
In June, the world’s leading venture capital firm Sequoia announcement a similar decision to partition its operations into three entities covering Europe and the United States; China; and India and Southeast Asia. Its operations in China will be managed independently under its Chinese name, Hongshan.
Executives at the Silicon Valley company said at the time that it had “become increasingly complex to manage a decentralized global investment business.”
In August, Dentons, a leading law firm, also said its Chinese unit would become a standalone legal entity, in response to new Chinese regulations related to data privacy, cybersecurity and capital controls.
