China’s investment spree has benefited an array of homegrown startups desperate for fresh capital, but it has also provided an opportunity for swindlers as well.
Recently, GGV Capital, which is known for investing in some of the world’s high-growth tech companies like Alibaba and Airbnb, has become the latest venture capital firm to have its reputation tarnished by such financial scams.
On Monday, GGV Capital announced in a statement that it has not authorized any organizations to conduct public fundraising activities in China after being informed that certain apps and WeChat groups were using GGV Capital’s name to attract investors and subsequently failing to allow them to withdraw funds when they requested.
GGV Capital also said that it has neither authorized any organizations to develop apps nor organized WeChat groups itself for the purpose of investment and fundraising, adding that it will take legal action against any app developers and WeChat group heads involved.
Since its founding in 2000, GGV Capital has invested in more than 300 startups across a wide range of industries including internet, cloud computing and new retail. The venture capital company has offices in Silicon Valley, San Francisco, Shanghai, Beijing and Singapore.
In 2020, at least 20 venture capital and private equity firms including IDG Capital and Bluerun Ventures issued clarification statements their names were used to commit illegal fundraising activities, according to local media reports.
Contact reporter Ding Yi (firstname.lastname@example.org)