Sequoia China, CMC Holdings to establish sports investment fund

Mon Mar 13, 2017 - 8:07am GMT+0000
Sequoia China, CMC Holdings to establish sports investment fund
Chinese fans celebrating

Sequoia Capital China and China Media Capital (CMC) have jointly established a sports investment fund to back and consolidate global premium sports assets.

The two VC firms said today, that the fund has completed its first closing but did not disclose any financial details.

In fact, the vehicle has already led a Series A financing round for Chinese boxing event operator and video platform Beijing Wanmingyang Media.

The media firm’s featured event “Glory of Heroes” is committed to becoming a kickboxing version of NBA, and has been ongoing for four seasons.

At the same time, the fund also invested in Huayi Brothers-backed Hero Sports, the entity behind the Hero Pro League which is China’s biggest professional mobile eSports league.

In 2014, the Chinese sports sector had contributed more than RMB420 billion but this makes up only 0.6 percent of the nation’s GDP, much lower than the global average of 2.1% or the United States average of 2.9%.

However, China’s State Council also projected in 2014, that with the rise of young consumers leading the growth in sports consumption, the nation’s sports sector will grow to reach over RMB5 trillion (about US$724 billion) in market size by 2025.

“Sports are long-term investments, and require professional knowledge and industry network accumulation,” explained CMC Chairman Li Ruigang. “We will fully leverage our investment and operational advantage to consolidate global resources and conduct cross-industry integration to help grow China’s sports sector.”

Founded by Chinese media mogul and former Shanghai Media Group Li Ruigang, CMC Holdings and its affiliate China Media Capital is an investment holding company that has previously made significant investments in sports, including various investments in City Football Groups.

It is the owner of Manchester City, New York City, Melbourne City sports agencies and others, while also having backed sports-related businesses such as Chinese sports event management firm Ti’ao Power, sportswear firm Meike International, sports marketing firm SECA, and sports data firm Cubee Technology.

Sequoia Capital China has also invested in many sports companies in China, including sports lottery firm, sports video platform DouyuTV and ImbaTV.

Speaking on the partnership, the managing partner at Sequoia Capital,Neil Shen said, “We are happy to team up with Li Ruigang-led CMC Holdings to establish a sports-focused investment fund. We will utilize the same investment concept to participate in the consumer trend in sports and help support the growth of sports in China.”

With the launch of this investment vehicle, the VC firms will be able to capitalize on the massive growth potential of the sports sector in China as well as expanding premier sports assets in the Chinese and global market, boosting the development of China’s sports industry.

By Vivian Foo, VCNewsNetwork