Sat. Nov 27th, 2021


China’s leading venture capitalist has boosted sales of interests in three of its largest investments, which are now among the country’s largest technology companies, as Beijing’s investigation into the sector results in new regulations.

Neil Shen, head of Sequoia Capital China, sold up to $ 215 million worth of shares in the fast-growing group shopping app Pinduoduo, food delivery giant Meituan and delivery platform Dada Nexus.

His investments in Pinduoduo, which is listed in New York, and Meituan, which is listed in Hong Kong, helped drive Shen to the top of Forbes’ Midas list for several years as Asia’s most successful venture capitalist. The 53-year-old’s personal net worth is estimated at $ 4.4 billion.

“In China’s investment world, there’s Neil Shen and then there’s everyone else,” said one industry admirer. “He’s the only one who’s been a banker, entrepreneur and investor, and that gives him an edge.”

Shen’s biggest sales of stock were in Meituan, which was fined $ 530 million last month for antitrust violations.

On October 25, he sold about $ 100 million of Meituan shares held by a family investment vehicle and in his own name. This followed its $ 55 million sale of shares in September, which sold its largest personal sale of shares at that time and second time. since the company’s initial public offering, according to submissions in Hong Kong.

A Meituan driver delivers food delivery in Beijing
A Meituan driver delivers food delivery in Beijing. Neil Shen’s biggest sales of stock were in the food delivery group © Greg Baker / AFP / Getty

Since the inception of Sequoia’s China arm more than a decade ago, Shen has built the VC firm into one of China’s most prominent investors. The group completed 96 transactions in the third quarter, making it the world’s most active fund, according to CB Insights.

The investment spree for Sequoia Capital China came even when other international funds came to a standstill during an uncertain regulatory environment. Recently, officials moved to dismantle the education technology industry, which has absorbed billions of dollars in funding, halting the conveyor belt of Chinese companies on their way to listing in New York.

Chinese President Xi Jinping launched a wealth redistribution campaign in August that forced the country’s technology giants to pledge ever-increasing portions of their profits to charity.

In September, Shen began paying out some of its most valuable shares, such as those of Meituan and Pinduoduo, in what appears to be its first disclosed personal sale of the company’s shares. Sequoia invested $ 370 million in Pinduoduo over three private rounds of financing that began in 2017, paying an average of $ 1.22 per share.

Pinduoduo’s share was at $ 107 per share on September 8 when Shen and his family’s investment vehicle began selling 280,000 shares worth nearly $ 30 million, according to Form 144s filed in the US. The e-commerce group’s shares have fallen since their February high of $ 212.

Shen sits on Pinduoduo’s board and can continue to hold shares in the company. He did not respond to a request for comment on his share sale.

Three of Pinduoduo’s top executives, including chairman and CEO Chen Lei, also sold shares in September, with each exchanging shares worth about $ 7 million in their first revealed share sale since the company’s 2018 listing, according to Form 144 data analyzed by Bradford Lynch. -Levy at Wharton School’s Forensic Analytics Lab.

“The Form 144 data provides the only record of Chinese executive stock sales due to the SEC’s outdated disclosure rules for foreign issuers that allow executives of foreign firms to effectively hide their transactions from investors,” Lynch-Levy said.

Pinduoduo did not respond to a request for comment.

Shen also moved in September to sell as much as $ 30 million worth of shares in Dada Nexus, a delivery platform that connects companies with couriers to transport their goods to buyers.



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