Firm raises largest flagship fund to date with a focus on early-stage investments in SaaS, consumer internet and financial technology
DCM, an early-stage global venture capital firm, today announced it has closed its largest family of funds to date, totaling $880 million. The committed capital includes $780 million for DCM IX, its largest ever global fund, and $100 million for its third A-fund dedicated to global seed-stage investments.
This family of funds will primarily target early-stage investments in SaaS & vertical cloud solutions, next-generation B2B & B2C financial technologies, as well as category-defining consumer internet companies. Since its last flagship fund of $500 million in 2016, DCM has heavily invested in early-stage technology companies with 82 percent of companies being initially invested at the seed or Series A stage. With the launch of DCM IX, the firm now has $4.2 billion in assets under management.
"DCM was the first Silicon Valley firm to invest in the early-stage technology sector in China and Japan beginning in the late 90s. Since then, we've continued to deliver strong returns to our limited partners, while executing our global investment strategy across the three largest technology markets: U.S., China and Japan," said David Chao, DCM co-founder and general partner.
Limited partner distributions and IPO proceeds for the past three years exceeds $2.2 billion, compared with a historical average fund size of about $500 million. In the past ten years, DCM’s aggregate IRR (internal rate of return) across all investments globally is over 50 percent. "Our global platform and deep local expertise has enabled us to consistently source compelling investments, facilitate strategic partnerships, and create exit opportunities for our portfolio companies, resulting in exceptional realized returns over the past decade," said Ramon Zeng, general partner of DCM China.
Exits and Standout Portfolio Companies
Since 2019, DCM has had seven initial public offerings, including Bill.com (NYSE: BILL), BlueCity (NASDAQ: BLCT), Freee (TYO: 4478), Life360 (ASX: 360), Sansan (TYO: 4443), UCloud (SHA: 688158), and VisasQ (TYO: 4490).
Since the last fund, DCM has had 17 notable liquidity events including Careem (Uber), Pony.ai, Wrike and Musical.ly (now TikTok). DCM’s 2014 Fund currently stands at a gross return of around 7x, making it one of the top performing venture funds of its vintage globally. DCM’s 2011 Growth Fund stands at over 5x gross return with more than 3x already distributed to limited partners, while DCM’s 2011 Seed Fund stands at over 4x gross return.
Other milestones for standout portfolio companies include:
Kuaishou, a Chinese short and live video social network with 300 million daily active users, is one of the highest valued decacorns in the world; DCM was the lead investor in the Series B round, a stake currently valued at several billion dollars.
Bill.com, a leading provider of cloud-based financial services, became one of 2019’s strongest IPOs and is now up over 100 percent with a market cap of $5 billion; DCM was the sole investor of the first financing round and maintained its position as the largest VC ownership pre-IPO.
Sansan and Freee were Japan's two largest IPOs of the past year, as well as the first venture-backed billion dollar SaaS companies to go public. DCM was the sole seed investor in Freee, now valued at $2.5 billion, and maintained its position as the largest VC ownership pre-IPO.
DCM is an early lead investor in each of the above companies. "Our investment strategy, globally distributed team and hands-on approach is a key factor in helping our portfolio companies become some of the world's leading technology companies," said Hurst Lin, DCM China co-founder and general partner.
New Partners and Promotions
Over the last 18 months, DCM has internally promoted Kyle Lui in the U.S. and Ray Zhao in China to partner. As partners, Lui leads investments focused on consumer internet, enterprise software and financial technologies, and Zhao leads B2B software and marketplace investments. Lui and Zhao join David Chao, Hurst Lin, Osuke Honda and Ramon Zeng as the investment partners for DCM IX.
"We look forward to funding the next generation of innovators," says DCM Japan general partner, Osuke Honda. "We are dedicated to being a trusted partner and helping entrepreneurs build scalable and sustainable businesses globally."
DCM is a global venture capital firm based in Silicon Valley, Beijing and Tokyo with over $4.2 billion under management. DCM has invested in more than 400 early-stage technology companies globally and provides hands-on operational guidance and a global network of business and financial resources. DCM has backed industry-leading companies, including 51job, 58.com, Blued, Bill.com, BitAuto, Careem (Uber), Dangdang, Fortinet, Freee, Happy Elements, Houchebang (ManBang), Kakao Talk, Musical.ly (TikTok), Sling Media, Sansan, TanTan, Tuniu, UCloud, Uxin, Vipshop and Wrike. DCM has also invested in rising startups, such as Brigit, DXY, Eaze, Figure Technologies, Folio, Hims & Hers, Kuaishou, Lime, Maimai, Peco, Plenty, Pony.ai, SigFig, SoFi and Tempo. For more information, visit https://www.dcm.com.
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Samantha Van Gent