Venturous Group, a Beijing-based smart city technologies investor, has secured a Hong Kong-listed company to lead a Series B round, according to co-founder and Chief Commercial Officer Johan Riddergard.
The details of the participation of the lead investor, a large-cap stock active in one of Venturous’ smart city-tech verticals, are expected to be announced by the middle of August, said Riddergard. The company’s key verticals are smart energy, smart buildings, smart computing, and smart city management, he noted.
Several existing shareholders will also invest in the Series B raise, which was launched in early 2022, said Riddergard. The first close of Series B was on 14 July, while the final close will take place by the end of this year, he added.
The fundraise is capped in size and will be done on a first-come, first-served basis, Riddergard said, declining to disclose the deal size.
Venturous last raised USD 131m from a Series A round in March 2021 in which company founder Benson Tam committed USD 50m, Fidelity China Special Situations PLC invested USD 35m, and ex-Alibaba [HKG:9988; NYSE:BABA] COO Savio Kwan dedicated USD 10m, as announced. Other family ofﬁces from Hong Kong, Singapore, Europe, and the US provided around USD 36m in Series A capital.
Growth via new JVs, ecosystem buys
Proceeds raised from Series B will be used to fund additional joint ventures (JVs), top-up existing holdings, and make new investments in Chinese smart city technologies and themes such as carbon neutrality, he said.
The firm typically makes minority investments ranging from hundreds of thousands USD to tens of millions USD, he added.
Venturous plans to form JVs with its investee companies and strategic partners by spinning off teams, technologies, and products, said Riddergard. Its core holdings – smart computing company iSoftStone, energy management services provider Anjie, and smart city management provider iSSTech – are expected to play important roles, he added.
The JVs would require capital between high single-digit millions USD and tens of millions USD, he said. Aside from capital contributions, Venturous would advise on strategy, capital structure, and business development, while JV partners would provide team members, intellectual property, products, or customers, he added.
Venturous’ existing JVs are building technology company Neuron Digital Group, formed with London-based Arup, and IoT operating systems developer SwanLink, which was created with iSoftStone Group and Wuxi National High-Tech District.
Venturous invests in, builds, and operates smart city-tech infrastructure companies in China, aiming to use “deeptech” to transform cities to become smarter (more liveable, sustainable, and productive), with 11 investments to date, according to Riddergard. Its ecosystem investments include Chinese hotel chain operator Zhuyou Hotel Group, digital wealth manager Homaer International, and smart finance company Xforceplus, according to the company website.
Founded in 2019, Venturous has 15 employees with offices in Beijing, Hong Kong and Singapore, said Riddergard.
by Jessica Wong in Hong Kong (Senior M&A Reporter, Asia Pacific, Mergermarket)