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GGV Capital Raises $625 Million for Fund IV

Today we announced the closing of GGV Capital’s new $625 million Fund IV.  This new venture capital fund is composed of roughly $520 million in US dollars and $105 million in Chinese RMB, for a total of $625 million (GGV Fund III was $610 million).  Read Tomio Geron’s article about the new fund in Forbes here.

Since the firm’s founding in 2000, we have pursued a consistent strategy – one team investing out of one fund, seeking to back great entrepreneurs and management teams in the US and China.  With Fund IV, we plan to do more of the same.  We couldn’t be more thrilled, and I thought I would share two personal thoughts:

First, our responsibility to entrepreneurs and management teams.  We could not have raised this new fund without the exceptional performance and returns generated by the entrepreneurs we’ve backed.  13 of these teams have taken GGV portfolio companies public since 2010, and several have been involved in some of the technology industry’s largest M&A transactions in the last year (including hiSoft, Buddy Media, Endeca, SuccessFactors, Tudou and Qunar).  The quotes from Lars (Founder/CEO of SuccessFactors) and Gary (Founder/CEO of Tudou) in our press release mean a lot to each of us personally, as they reflect the kind of relationships we seek to build as we invest our capital, our time and every other resource we can bring to bear to try and help drive success.

“GGV Capital was a tremendous growth stage investment partner for SuccessFactors. In an extremely competitive situation, GGV had the foresight to be decisive when others waivered.  It’s that killer instinct that stands out for me,” said Lars Dalgaard, SuccessFactors founder and CEO.  “The GGV team played a major role in our growth, from IPO to expansion into Asia to our ultimate $3.4 billion acquisition.”

Second, our responsibility to our Limited Partners (“LP’s”).  Just like entrepreneurs and CEOs do, we take our responsibility to our investors very seriously.  They are investing with us because they expect GGV to continue to deliver the above-market returns we have since the firm’s founding in 2000.  I won’t go into a tremendous amount of detail here, but suffice it to say that we appreciate our investors’ commitment to GGV (many of whom have been with us since 2000, across four funds) and we clearly understand our mandate.

Thomas, Hany, Scott and Joel founded the firm in 2000 with a unique idea and operating model – one team investing out of one venture capital fund across the US and China.  Twelve years later, we couldn’t be more excited to be investing Fund IV at a time when technologies like mobile, social and cloud computing are creating massive disruption – and the world’s #1 (US) and #2 (China) economies are increasingly intertwined.

Why We Invested in Evolv

Today Evolv, the leading provider of science-based talent matching and talent intelligence solutions, announced a $15.75M Series C round of investment led by GGV Capital and existing investors Khosla Ventures and Lightspeed Venture Partners.   I thought I would provide a bit of background information on why we’re so excited about Evolv.

Why’d we invest?

Two key reasons.  First, Evolv has the three main ingredients we look for in a great investment:  a GREAT team, a BIG (huge) market, and an EXCELLENT business model.  Secondly, there is a broader trend here that we at GGV have been betting on for several years, and Evolv is a shining example of our thesis:

Emerging SaaS platforms driving data and analytics driving increased revenue and profitability.  For these platforms, the data is as important / more important than the base software functionality.

Who else is employing this model?

Since early 2010, our firm has invested in a number of high-growth companies which fit this profile, Evolv being the latest.  Others include BlueKai (platform + data for the Internet ad market), Conviva (platform + data for digital media distribution), and Buddy Media (platform + data for social media marketing).   All of these companies have terrific technology, core IP, and rabid customers who rave about their offerings.

Perhaps the most well-known platform of this type is Omniture, which revolutionized the market for web analytics, changed the way companies do business on the Internet, and eventually was acquired by Adobe for $1.8B in the Fall of 2009.

Evolv is doing for the talent market (employers and employees) what Omniture did for web analytics – using science and data to optimize the continuous cycle.  For employers, this drives massive improvements in profitability and employee satisfaction.  For employees, it ultimately creates a better job market (less time pursuing the wrong jobs, more success in the right jobs).

Back to Evolv

It’s about Team.  Beyond investing in this thesis, we are huge fans of Max Simkoff (CEO of Evolv), his cofounder Jim Meyerle, and the rest of the Evolv management team.  As readers of this blog know, at GGV when we make a bet, our bet is squarely on the CEO and his/her team – we aren’t betting on a sector and assuming we’ll figure out the team later.  In this case, we were fortunate to be able to get to know Max and his team over the course of 9 months and watch them execute against an ambitious and visionary plan.  Prior to meeting Max, we also had the pleasure of watching Evolv VP Sales Jeff Bieller make a huge impact during his tenure at SuccessFactors (a GGV portfolio company), one of the most successful SaaS companies in the history of the industry.

Evolv is going after a massive market.  In the US alone, companies that employ hourly workers spend an estimated $540B per year on recruiting.  The leaders in the staffing and recruiting industry generate approximately $30B in annual revenue.  Online job boards represent several billion dollars more in transaction volume.  Net/net, it’s still early and I can’t tell you I know exactly how big Evolv’s market opportunity is, but I believe it’s many, many, many billions of dollars.  I’ll take that opportunity any day.

For more information on how Evolv’s technology works – and the science behind it – visit Evolv’s website.  Ultimately, Evolv is all about helping employers make the right decisions on which people to hire, enabling those hires to be successful, and then creating a continuous feedback loop on performance to refine and improve the hiring process.  For a parallel on what this looks like in the tech industry, read the recent NY Times piece on what Laszlo Bock, Google VP People Operations (and Board member at Evolv), and his team are accomplishing at Google.

We’re fired up to be a part of Evolv, and can’t wait to see what the future holds for Max and his team.

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