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Kleiner Perkins Caufield and Byers, one of the blue-bloods of the US venture capital business, has taken the first step beyond its Silicon Valley roots by opening an office in Beijing and raising $360m to invest in technology start-ups in China.

Kleiner’s move represents a watershed for the Valley’s famously insular private financing community. Based on close personal relationships and local connections, Valley firms have hesitated before turning overseas, in spite of their dominance of the overall US and global venture capital markets.

Silicon Valley rivals Sequoia Capital, Accel Partners and Mayfield have already set up in Beijing, sometimes after lengthy internal debates about whether they could successfully build personal networks and apply techniques learnt in the clubby atmosphere of Silicon Valley’s Sand Hill Road. “The opportunity is so enormous, if you want to be in the venture industry going forward, you really need to have a presence here,” said Ted Schlein, a Kleiner partner.

He added that the move to China did not reflect a belief that opportunities to back new technology start-ups in the US were shrinking, but rather: “We think there are some big enterprises that will be created here.”

He put Kleiner’s relative lateness into the market down to the need to find local venture capitalists with strong reputations and networks of their own.

“We were willing to wait until we got the absolute best people,” he said.

The firm said it had hired four general partners to head its new offices in Beijing and Shanghai, led by Tina Ju and Joe Zhou. Ms Ju has specialised in early-stage internet investments, backing a number of leading
Chinese companies.

Her former firm, TDF Capital, will form the basis of the new Kleiner operation.

Copyright The Financial Times Limited 2018. All rights reserved.

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