Chinese Startup Crowdfunding Site CTQuan Raises $4 Million, Launches Overseas Investment Fund

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CTQuan, the Chinese equity crowdfunding site for startup companies, has raised roughly $4 million in a new round of financing, TechCrunch has learned.

The Beijing-based company (and CrunchBase content partner) is similar to AngelList in its offering of investment information and a directory of Chinese startup companies, syndicated investment vehicles (which the company calls dynamic funds), and even its own fund for investments.

The company’s most recent financing, like its previous capital infusions, came from undisclosed angel investors in China. “I tried to stay away from traditional VCs,” says Li. “What we’re targeting is to replace them in early stage funding.”

Investments into CTQuan, and on the CTQuan platform, are all denominated in Renminbi, Li says. That includes investments into the company’s dynamic funds, which differ from AngelList syndicates in some ways.

Unlike the syndicate model, where individuals can pool capital for either a single investment, or to create their own mini-investment vehicle for multiple deals, CTQuan’s dynamic funds are discrete vehicles for individual companies. “For each investment we set up a small fund,” says CTQuan chief executive Li Xiaoning.

In part, that’s because of some of the vagaries of Chinese legal structures and the quirks of the venture capital and private equity market in the country.

CTQuan is also taking a different approach as it goes to market with its own dollar-denominated venture capital fund. Li says the fund is targeting $100 million for investments outside of China.

His company is already acting as a broker between Chinese companies and foreign technology startups. It helped to broker the $20 million round for Israeli image recognition technology developer Cortica, which was led by an undisclosed strategic investor from China.

“In the earlier deals we were just brokers,” says Li of the company’s matchmaking efforts. “Helping foreign startups find Chinese technology companies and then getting them to invest… In later deals we will get to be co-investors.”

Chinese firms have been increasingly active in global technology investment, with mixed results. Tencent led a $150 million investment in Fab, which will turn out to be a wash — if Tencent’s very lucky. Other deals in companies like Weebly and Whisper, may have more positive outcomes for one of China’s top technology companies. Other Chinese technology giants, like Alibaba, Renren, and Qihoo 360, have also made commitments to startups in the U.S.

“There’s opportunities for U.S. technology companies to come to China,” says Li. “[Chinese partners] can take a company with cutting edge technology into the Chinese market and take advantage of the local consumer market. The appetite for U.S. dollars is low, but the appetite for U.S. technology is very high.”