Rockley Group, the technology funding group led by Andrew and Robert Rickman, is expanding its Rockley China Fund to USD200m following an agreement with the Shanxi Small and Medium Enterprise Investment Corporation, the high technology venture fund that is owned by the Shanxi provincial government.
SSMEIC and Rockley have agreed to raise a USD100m fund – Shanxi Zhongying Rockley – and work together on a new initiative to further develop the enterprise environment in Shanxi Province, China’s leading coal mining region.
Shanxi’s GDP is USD100bn and the province produces 25 per cent of China’s coal and 40 per cent of its coke supplies.
Last year, Rockley signed a similar agreement to raise a USD100m fund with the Shandong High-Tech Investment Corporation and the Shandong Academy of Sciences. The fund, known as Rockley Luxin, has since been incorporated as a joint venture vehicle (foreign invested venture capital enterprise – FIVCE) and is also part of the wider Rockley China Fund, which is headquartered in Beijing.
Rockley and its partners have established the Shanxi fund and associated advisory and investment management business in Taiyuan City, Shanxi. Sixty per cent of the Shanxi fund (USD60m) has been committed by SSMEIC with 40 per cent (USD40m) coming from Rockley. The fund is being set up as a FIVCE as this provides the most efficient structure for co-investor partners investing through Rockley.
The focus of the Shanxi fund, like that of the wider Rockley China Fund, is on investments in established technology companies in the energy, environment, ICT and health and safety sectors that require expansion capital. Target companies will have the likelihood of a major liquidity event within two to five years.
SSMEIC will provide access to development capital, deal flow and advice on regulatory issues. Technology management and further investment opportunities will be sourced from Rockley Group, which has a portfolio of technology companies in the UK, US and China.
Andrew Rickman says: “We are delighted to be working with SSMEIC and pleased that they have agreed to commit capital and resources to this exciting initiative.
“The demand for technology solutions to support sustainable domestic economic growth in China will be one of the greatest investment plays of the next few decades.
Through the Rockley Shanxi initiative and Rockley China Fund, our investors will gain access to high quality deal flow from growing companies with proven products and services to meet that significant demand in China and beyond. We have a growing list of investors from Europe, Hong Kong and China who are attracted by this opportunity.”
