AngelList teams with Chinese PE firm for $400M startup fund

Startup funding platform AngelList is getting $400 million from China-based private equity firm CSC Venture Capital for what is being dubbed as the world's largest fund dedicated to seed-stage startups.

The new fund, christened CSC Upshot, would focus on US-based startups and will be managed separately from AngelList.

"CSC Upshot will primarily invest in syndicates led by experienced angels and VCs. It will help syndicates make larger, faster investments in early-stage startups and their follow-on rounds. It will also help promising new syndicates make investments while they're building a backing from individual investors," AngelList said in a blog-post.

The deal is also seen as the "largest-ever single investment by a Chinese private-equity firm in a US fund," The Wall Street Journal said in a news report.

AngelList, which functions as a matchmaking site for startups and investors, was founded in 2010 by India-origin serial entrepreneur Naval Ravikant along with Babak Nivi. Since its inception, AngelList claims to have facilitated over $200 million in investments for about 650 startups.

Akin to Facebook or Reddit, AngelList relies on its thousands of members, as well as startups seeking investment, to create deal flow. In other words, AngelList uses the 'syndicates' model that allows highly influential investors to pool money from their personal funds for investments. Some of its portfolio companies, such as ride sharing app Uber, have gone onto become unicorns of the startup world.

"As we add more limited partner capital we are going to add more syndicate leads who are voting with their own dollar," Ravikant told The Wall Street Journal.

"We are going to deploy an army of leads," he added.

CSC Venture Capital has about $12 billion under management. The fund has already chosen 50 top leads on the crowdfunding platform that will be considered for investments with the help of AngelList.

"CSC Upshot is about Chinese LPs expanding globally and showing that Chinese companies can go out globally and compete in a way that gets them exposure at the very earliest stage, instead of waiting for the Series D round," Ravikant told TechCrunch.

In July, The Times of India had reported that AngelList intends to kick off operations in India. AngelList has already taken its platform outside the US with outposts now in the UK, Canada, Australia, and some parts of Europe.

Prior to starting AngelList, Ravikant had co-founded Epinions (which went public as part of Shopping.com) and Vast.com. He is also an active angel investor and has put money in companies such as Twitter, Uber, Yammer, Stack Overflow and Wanelo.