Cathay Innovation expands European presence as it seeks second fund

The cross-border investor has also hired Jason Chen as an associate in San Francisco, who joins from Scale Venture Partners.

Cathay Innovation is marching toward a close of its second fund, has bolstered its staff in San Francisco and appointed Costanza Carissimo to lead the firm’s investments in emerging German tech startups.

The firm in mid-summer announced it raised €320 million ($357 million) for the first close of its second venture fund. The firm, which makes early and late-stage investments in North America, Europe and China, said it is aiming to raise €500 million ($557 million), which should support 30 to 35 companies, said Denis Barrier, who co-founded the firm with Mingpo Cai.

Cai

Cathay Innovation, which is affiliated with Cathay Capital, raised $320 million for its debut effort, which closed in 2017.

Investors in the first fund who returned for Fund II include Bpifrance, Groupe ADP, Groupe SEB, Michelin, Valeo and GL events. New investors include Accor, BioMérieux, Dassault, JCDecaux Holding, Kering and Pernod Ricard.

Barrier noted that on average, the LPs, or partners, as he calls them, co-invest $1 for very $2 that Cathay Innovation puts into its portfolio companies. He said this is part of the firm’s value-add, to have so many relationships with strategic partners from around the world who not only invest in the portfolio, but can partner with the companies and help on strategy.

“Their commitment to the fund and to invest in companies is proof our system is working,” Barrier told Venture Capital Journal in an interview at the firm’s San Francisco office.

Barrier wouldn’t say when the firm expects to close the second fund.

In addition to San Francisco, Cathay Innovation also has locations in Paris and Shanghai.

Barrier discussed the firm’s focus in Europe and said the firm is looking to expand in particular its investment presence in Germany.

Carissimo

Leading that effort is Carrissimo, who was previously based in the firm’s San Francisco office and has been at Cathay Innovation since late 2017. Prior to joining the firm, she was on the investment team at Cherry Ventures in Berlin, where she focused on seed-stage startups.

In addition to moving Carrissimo to Europe, Cathay Innovation recently hired Jason Chen as an associate. His appointment was not previously announced, but he came on board in September and is working out of the San Francisco office. He previously was with Scale Venture Partners and before that was at CRV.

Chen

The firm said Chen will focus on vertical AI, machine learning, vertical SaaS, DevOps, and applications for the future of work.

Since Barrier and Cai launched the firm in 2015, Cathay Innovation has invested in more than 30 early-stage companies, which they say have combined annual gross revenue in excess of $100 billion.

The portfolio includes such companies as Pinduoduo, a Tencent-backed Chinese ecommerce company that had an IPO in 2018; San Francisco-based mobile banking company Chime; Momenta, an autonomous driving startup operating from Beijing; and Paris-based data analytics company Kayrros.

Separately, Cathay Innovation earlier this year announced it partnered with AfricInvest, one of the largest private equity and VC firms on the African continent, to raise $168 million towards Cathay Africinvest Innovation, a Pan-African venture fund.

Barrier said the fund is probably the largest Africa-dedicated VC fund today.

Correction: In the November 2019 print version, this story incorrectly stated what offices Cathay Innovation operates. The firm has offices in San Francisco, Paris and Shanghai.