Luckin Coffee startup backer raises over $2bn

China’s Centurium Capital, a big backer of domestic startup Luckin Coffee, said it has raised more than $2 billion in its debut fund. (Reuters)
Updated 03 July 2019
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Luckin Coffee startup backer raises over $2bn

  • US dollar fund will help firm invest in Chinese VIEs
  • Centurium invested $180m in Luckin Coffee’s first two funding rounds

HONG KONG: China’s Centurium Capital, a big backer of domestic startup Luckin Coffee, said it has raised more than $2 billion in its debut fund, giving the private equity firm more firepower to cut deals involving the world’s second-largest economy.

The firm, co-founded by the former head of Warburg Pincus Asia Pacific, David Li, said on Wednesday that Centurium Capital Partners 2018 L.P. raised the sum in US dollars.

The fund secured strong interest from global investors, known as limited partners (LPs), such as pension funds, sovereign wealth funds and funds-of-funds, it said.

Investors in the fund include Singapore’s GIC Pte Ltd. and Temasek Holdings, Canada’s Ontario Teachers’ Pension Plan, China Investment Corp. (CIC) and US pension fund Washington State Investment Board, said two people with knowledge of the matter.

Centurium declined to comment on the fund’s LPs. All the investors didn’t immediately respond to requests for comment.

The US dollar fund will help Centurium invest in Chinese firms that use overseas structures such as variable-interest entities.

Centurium joins several China-focused private equity and venture capital managers who raised $17.3 billion in dollar-denominated funds in the first half of the year, versus $13 billion over the same period last year, according to data provider Preqin.

Launched in March 2018, Centurium’s maiden fund reached the first close of nearly $1 billion three months later and has beaten the $1.5 billion and $1.98 billion fundraising targets since then.

Beijing-based Centurium was set up in early 2017 by Li and two other partners. Li had worked with Warburg Pincus for 14 years and led several investments for the US buyout firm in China, including in top car rental service provider CAR Inc. 

“After helping several entrepreneurs fulfill their entrepreneurial dream for so many years, I also have my dream of launching our own (investment) firm,” Li said.

Centurium primarily seeks control and significant minority investment opportunities across China’s consumer, services and health care sectors where it looks to boost operational efficiency and tackle structural deficiencies.

“The Chinese business environment nowadays needs a new generation of investors that combine the global PE best practice and local experience,” Li said.

“Instead of being a pure capital provider, firms like Centurium can better integrate with local markets, and be more efficient and responsive to provide bespoke local solutions to new challenges and opportunities.”

Centurium began to gain recognition last year when it made a big bet on Luckin Coffee, the Chinese challenger to Starbucks Corp. It invested about $180 million in Luckin in the startup’s first two fundraising rounds.

Li said that Centurium has invested about 40 percent of the capital raised in the debut fund in five firms in China and aims to fully deploy the fund by the end of next year.


Huawei in public test as it unveils sanction-hit phone

Updated 19 September 2019

Huawei in public test as it unveils sanction-hit phone

  • Hit by US sanctions, Huawei's Mate 30 will not be allowed to use Google’s Play Store
  • Household-name services like WhatsApp, Instagram and Google Maps will be unavailable.
BERLIN: Chinese tech giant Huawei launches its latest high-end smartphone in Munich on Thursday, the first that could be void of popular Google apps because of US sanctions.
Observers are asking whether a phone without the Silicon Valley software that users have come to depend on can succeed, or whether Huawei will have found a way for buyers to install popular apps despite the constraints.
The company has maintained a veil of secrecy over its plans, set to be dropped at a 1200 GMT press conference revealing the Mate 30 and Mate 30 Pro models.
Huawei, targeted directly by the United States as part of a broader trade conflict with Beijing, was added to a “blacklist” in Washington in May.
Since then, it has been illegal for American firms to do business with the Chinese firm, suspected of espionage by President Donald Trump and his administration.
As a result, the new Mate will run on a freely available version of Android, the world’s most-used phone operating system that is owned by the search engine heavyweight.
While Mate 30 owners will experience little difference in the use of the system, the lack of Google’s Play Store — which provides access to hundreds of thousands of third-party apps and games as well as films, books and music — could hobble them.
Household-name services like WhatsApp, Instagram and Google Maps will be unavailable.
The tech press reports that this yawning gap in functionality has left some sellers reluctant to stock the new phones, fearing a wave of rapid-fire returns from dissatisfied customers.
Huawei president Richard Yu said at Berlin’s IFA electronics fair this month that his engineers found a “very simple” way to install the hottest apps without going via the Play Store.
Huawei could offer its own app store in a preliminary version, setting itself up as a competitor to the dominant Apple and Google offerings, observers speculate.
Over the longer term, the company could build out a similar “ecosystem” of devices, apps and services as the Silicon Valley companies that would bind users more closely to it.
The world’s second-largest smartphone maker after Samsung, Huawei earlier this month presented its proprietary operating system HarmonyOS, a potential replacement for Android.
The Mate 30 will not yet have HarmonyOS installed.
But it could make for a new round in the decades-old “OS wars” between Microsoft’s Windows and Apple’s Mac OS, then Android versus Apple’s iOS.
Meanwhile, Eric Xu, current holder of Huawei’s rotating chief executive chair, has urged Europe to foster an alternative to Google and Apple.
That could provide an opening for Huawei to build up Europe’s market of 500 million well-off consumers as a stronghold against American rivals.
“If Europe had its own ecosystem for smart devices, Huawei would use it... that would resolve the problem of European digital dependency” on the United States, Xu told German business daily Handelsblatt.
He added that his company would be prepared to invest in developing such joint European-Chinese projects.