DCM-Doll Capital Management announced last week that it closed its fifth fund at $500 million to invest in early stage information technology companies in the United States and abroad.
The new fund is larger than the $375 million that DCM raised for fund IV in 2004 and was three-times over-subscribed, says General Partner David Chao. About one-fourth of the previous fund was allocated to non-U.S. investments, and Chao says that the firm intends to increase its foreign deal activity to between 30% and 35% of the fund. Expanding its international operations is one of the reasons the firm took on more money. DCM-Doll will expand into South Korea, India and Eastern Europe opportunistically, Chao says.
The firm has had some success overseas. It has taken public such companies as Shanghai-based 51Job (Nasdaq: JOBS) and Tokyo-based All About (Jasdaq: 2454).
Having a little extra capital on hand to support its startups as they grow has become more important for the firm, Chao says. “For many companies, the IPO bar is getting higher and they need to have a little more legroom,” he says.
Chao would not disclose the names of limited partners, but he says that all but two existing LPs re-invested in DCM V. One LP is no longer involved in the asset class. And DCM parted ways with the other LP based on a disagreement surrounding public disclosures of fund infomration associated with the Freedom of Information Act.
The California Public Employees’ Retirement System invested in DCM III through its California Emerging Ventures program. DCM III, a 2000 vintage fund, has an internal rate of return of negative 9.4% at the end of 2005.
Several investors were promoted in conjunction with the new fund. Carl Amdahl was promoted to general partner, Ruby Lu was promoted to partner and Gen Isayama was promoted to principal. In addition, the firm added Hurst Lin as general partner in DCM’s Beijing-based Asia practice. Lin was previously COO of SINA Corp. (Nasdaq: SINA), a Chinese Internet company. He co-founded Sina.com’s precursor company, SinaNet, and remains on the board of SINA. —Alexander Haislip