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China’s Source Code Capital raises $570M as it builds a powerful investor network

Source Code Capital, the venture capital firm that’s backed some of China’s most prominent tech unicorns and boasts a network of high-profile investors and founders, announced Monday it has closed a new $570 million fund as it continues to hunt down early to mid-stage companies.
The latest close catapults Source Code’s capital under management to $1.5 billion and 3.5 billion yuan divided between six funds. Investors in the new fund, according to the company, span major pensions, sovereign wealth funds, college endowments, charities, private equity firms, among other institutions.
Source Code was founded in 2014 by Cao Yi, who studied computer science at China’s prestigious Tsinghua University and later became vice president at Sequoia Capital China, stints that might have helped him spot high-potential startups early on. To date, Source Code has backed close to 150 startups, including up-and-comers Bytedance, the TikTok parent that’s now the world’s most valuable startup; food delivery leader Meituan Dianping, which listed in Hong Kong last year; micro-credit provider Qudian, whose New York IPO marked one of the biggest for a Chinese fintech company that year; Mogu, a Tencent-backed fashion ecommerce site that floated on the Nasdaq last year; just to name a few.
With the new money, Source Code will continue to back businesses focused on the global market, “internet plus” or “AI plus” sectors, the last two of which are buzzwords in China pertaining to upgrading traditional sectors using the internet and artificial intelligence.
The fresh capital will also enable Source Code to bring more overseas investors into its peer and mentor alliance Ma Hui, which directly translates to “Code Club.” The thinking behind the community is akin to the investor network a16z has nurtured to channel support and resources between investors and portfolio companies. Ma Hui’s class of 30 big-name limited partners count Bytedance founder Zhang Yiming and Meituan founder Wang Xing.
“The goal of Source Code is to look for, invest in, and serve the best businesses in emerging economies. These companies and entrepreneurs are diligently working to let mass consumers eat better, wear better, live better, play better, access more inclusive finance and better transportation… among other ways to live a better life,” said Cao in a statement.
“[Our goal is] also to help enterprises across the board to grow sales, cut procurement and logistics costs, improve working capital turnover, unleash the potential of talents, and increase their global competitiveness… among other know-how to run a sustainable business,” the managing partner added.
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