San Francisco-based crowdfunding platform AngelList is setting up a $400 million seed fund called CSC Upshot, through an investment provided by China Science & Merchants Investment Management Group (CSC), one of China’s largest private equity firms.
CSC founder Xiangshuang Shan aims to turn his firm into the largest private-equity firm in the world, says Veronica Wu, president of its U.S. arm. The firm went public in March on the Chinese stock market, where it raised almost $2 billion.
CSC Venture Capital is the U.S. venture arm of China Science and Merchants Investment Management Group, one of the largest and most successful private equity and venture capital firms in China. CSC invests in mid-to-growth stage technology startups where it can accelerate growth with its vast resources and capabilities in China.
China Science & Merchants Investment Management Group (CSC), founded in 2000, is a preeminent private investment firm in China with US $12 billion (RMB ¥ 80 billion) of capital under management. CSC owns an extensive network in China via its local partners. Currently, CSC covers more than 100 cities and has built relationships with over 1000 LPs. This network provides a unique platform for CSC to acquire deep market insights and local know-how.
“Firms often raise more money to get more fees. But with our model, we can just add more syndicate leads so we can keep putting money into the same kind of companies at the same stage,” said AngelList’s co-founder Naval Ravikant, according to TechCrunch. “CSC Upshot is about Chinese LPs expanding globally and showing that Chinese companies can go out globally and compete in a way that gets them exposure at the very earliest stage, instead of waiting for the Series D round.”
“If it’s handled poorly, it could change prices and flood the market,” Ravikant acknowledged. “We were actually offered closer to $1 billion and we thought that was too much money. Even the $400 million will be spread out over six to eight years. Maybe the first year, we’ll deploy $20 or 30 million as we figure out the model, and then scale it out.”
AngelList is a platform for over 300,000 startups to meet investors, talent and incubators. It was founded in 2010 by serial entrepreneur Naval Ravikant and Babak Nivi. Startups like Uber, Leap Motion and thousands more have raised money on AngelList. Every month, startups raise millions of dollars online through Syndicates from over 40,000 investors. The platform has a mission to democratize the investment process. It started as an online introduction board for tech startups that needed seed funding. Now, the site allows startups to raise money from angel investors free of charge. In 2014 AngelList raised $104 million online from 2,673 investors, who funded 243 startups.