China’s biggest venture capitalist has stepped up sales of stakes in three of its biggest investments, which are now among the country’s biggest tech companies, as Beijing’s scrutiny of the sector results in sweeping new regulations.
Sequoia Capital China boss Neil Shen has sold up to $ 215 million worth of shares in fast-growing group buying app Pinduoduo, food delivery giant Meituan and delivery platform Dada Nexus.
His investments in New York-listed Pinduoduo and Hong Kong-listed Meituan have helped propel Shen to the top of Forbes’ Midas list as Asia’s most successful venture capitalist for several years. The 53-year-old’s personal net worth is estimated at $ 4.4 billion.
âIn the investment world in China, there’s Neil Shen and then there’s everyone,â said one industry admirer. âHe’s the only one to have been a banker, entrepreneur and investor, and that gives him an advantage. “
The biggest sales of Shen shares were in Meituan, which was fined $ 530 million for antitrust violations last month.
He sold around $ 100 million of Meituan shares held through a family investment vehicle and in his own name on October 25. This follows his sale of $ 55 million of shares in September, which marked his largest personal sale of shares at the time and the second sale since the company’s initial public offering, according to documents filed in Hong Kong.
Since the founding of the Chinese branch of Sequoia more than ten years ago, Shen has made the venture capital firm one of the largest investors in China. The group closed 96 deals in the third quarter, making it the most active fund in the world, according to CB Insights.
The investment frenzy for Sequoia Capital China came even as other international funds paused in an uncertain regulatory environment. Recently, officials decided to dismantle the education technology industry, which had absorbed billions of dollars in funding, and halted the treadmill of Chinese companies in the process of listing in New York.
Chinese President Xi Jinping launched a wealth redistribution campaign in August that prompted the country’s tech giants to pledge an ever-increasing share of their profits to charity.
In September, Shen began cashing in some of his most valuable stocks, such as Meituan and Pinduoduo, in what appears to be his first leaked personal sales of the company’s stock. Sequoia invested $ 370 million in Pinduoduo over three private financing rounds starting in 2017, paying an average of $ 1.22 per share.
Pinduoduo’s share was $ 107 a share on September 8 when Shen and his family investment vehicle started selling 280,000 shares worth nearly $ 30 million, according to Form 144. filed in the United States. Shares of the ecommerce group are down from their February high of $ 212.
Shen sits on the board of directors of Pinduoduo and may continue to own shares in the company. He did not respond to a request for comment on his share sales.
Three of Pinduoduo’s top executives, including Chairman and CEO Chen Lei, also sold shares in September, each cashing in shares worth around $ 7 million in their first disclosed share sales since the Company listing in 2018, according to Form 144 data analyzed by Bradford Lynch. -Levy at the Wharton School forensic lab.
“Form 144 data provides the only record of sales of shares of Chinese executives due to obsolete SEC disclosure rules for foreign issuers that allow executives of foreign companies to effectively hide their transactions from investors,” he said. said Lynch-Levy.
Pinduoduo did not respond to a request for comment on sales.
In September, Shen also decided to sell up to $ 30 million worth of shares of Dada Nexus, a delivery platform that connects companies with couriers to get their goods to buyers.