VENTURE debt provider InnoVen Capital has launched its second China fund with an initial US$130 million close.

The InnoVen China Fund II is a US dollar and renminbi dual-currency fund with a fund size target of US$250 million. The anchor investor is InnoVen Capital, a joint venture between Temasek’s Seviora and UOB. Other limited partners include Chinese government agencies.

“In an environment where the global economy is facing multiple challenges and uncertainties, we continue to see many lending opportunities to high-growth technology companies in China,” said Ong Beng Teck, chief executive officer of InnoVen Capital.

The company has disbursed more than US$400 million to at least 100 startups, including nine unicorns and six listed companies.

This follows on from InnoVen Capital’s first China fund launched in November 2021, which raised US$50 million at its initial close. The first fund has invested in more than 20 startups, including autonomous vehicle startup Autowise.ai, apparel maker Moodytiger and artificial intelligence platform Mininglamp Technology.

InnoVen Capital said the first China fund’s performance has a distribution to paid-in capital or returns to investors of 13 per cent. About two-thirds of portfolio companies have secured subsequent rounds of funding with the fund getting its first equity exit in 2023.

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“With the second fund, we will continue to adhere to environmental, social and corporate governance investment principles, and strategically focus on deep tech, enterprise services, consumer, healthcare and carbon-neutral sectors,” said Cao Yingxue, managing partner of InnoVen Capital China Fund.