Hong Kong technology venture-capital (VC) firm MindWorks Capital has finalised a new US dollar fund to invest in start-ups across the Greater Bay Area and Asia, defying an extended slump for China-focused private investments amid geopolitical headwinds.

MindWorks closed a US$220 million new fund, with investors including sovereign wealth funds, a university endowment, asset managers, family offices and "many prominent Asia new economy entrepreneurs", the company said on Tuesday.

The new fund, the company's fourth, brings its total asset under management to US$1.4 billion, it said.

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The company's "cross-border, cross-region" investment strategy across Greater China and Southeast Asia has "resonated with several global investors seeking to deploy capital in Asia", even though some China-based VC firms have found it difficult to attract US dollar capital, MindWorks managing partner Joe Chan said in a company statement.

Mindworks Capital managing partner Joe Chan in a file photo dated January 17, 2018. Photo: Xiaomei Chen alt=Mindworks Capital managing partner Joe Chan in a file photo dated January 17, 2018. Photo: Xiaomei Chen>

Roughly 70 per cent of the investors in MindWorks' new fund are based in Asia, while about 30 per cent are from Europe, David Chang, founding partner of MindWorks Capital, told the Post on Tuesday.

VC firms based in Greater China that invest in the region have struggled to raise US dollars over the past few years amid China's weak economic recovery and heightened geopolitical tensions between Beijing and Washington.

In the first half of 2024, there were no US dollar inflows into China-based VC and private equity funds, according to a Gavekal Research note published in July, citing data by market research firm Preqin.

China-focused private capital fundraising has tumbled to a new low of US$3.4 billion in the second quarter of this year, Preqin also said in July. That represents less than a tenth of the average quarterly amount of US$45 billion between 2019 and 2021.

The new MindWorks fund will invest in tech start-ups involved in fields including cross-border logistics, cross-border finance and smart manufacturing, as well as in enterprises that are using artificial intelligence to transform these businesses, according to Chang.

The firm is among a range of funds that the Hong Kong government-run Innovation and Technology Venture Fund selected since 2018 to jointly invest in local start-ups.

MindWorks has previously backed companies including Hong Kong-based logistics operator Lalamove, Shanghai-based cross-border payment and risk management service provider XTransfer, and Hong Kong-based lending start-up Qupital.

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