The Hong Kong-based venture capital firm 5Y Capital has had two major pieces of news in the last year. First, it rebranded from its original name, Morningside Venture Capital, in October. Then in February, it made a reported $30 billion return on its investment in the short-form video app Kuaishou, after the Chinese company listed shares on the New York Stock Exchange.

While Kuaishou may be its most high-profile success so far, 5Y has made other significant investments in its 13-year history, and it is moving fast to make more. Two of the firm’s best-known bets in China were on the electric vehicle startup Xpeng and voice toolkit Agora, which is best known as the technical foundation of social media app Clubhouse. 5Y Capital has already backed 16 companies in 2021, including startups in artificial intelligence, biotech, skincare and chocolate making. Chinese companies account for 90 percent of its more than 200 total investments, according to PitchBook. The early-stage firm has $4.8 billion in assets under management, and announced in April that it had raised over $2 billion in new funds.

At The Wire, we periodically focus on fast-growing firms investing in China, introducing them to our readers and mapping their corporate and shareholding structures. We’ve featured Hillhouse Capital and IDG Capital. Now, meet 5Y Capital.

Meet the Team

5Y Capital can trace its success back to a Hong Kong property group formed more than 60 years ago. The firm grew out of the Morningside Group, which was founded in 1986 by the brothers Gerald and Ronnie Chan, with money from the family fortune. Their father, Chan Tseng-hsi, had made his money on the Hong Kong property scene after founding Hang Lung in 1960, and growing it into a multi-billion dollar enterprise (Ronnie Chan now serves as Hang Lung’s chairman).

5Y founders, Qin Liu and Ken Shi, attended the same graduate school — the China Europe International Business School — and joined the Morningside Group in 1999. Nine years later, they spun out their own firm, with the blessing of the Chan brothers, who lent them the Morningside name. The now-rebranded 5Y is based in Shanghai, with additional offices in China and Hong Kong, while Morningside Group has its headquarters in Hong Kong. The firm did not respond to several requests from The Wire for comment.

Limited Partners

On its website, 5Y boasts that its investors include “world-renowned sovereign wealth funds, family offices, fund[s] of funds, university endowments, pensions and foundations.” Morningside Group has also invested through the firm. 

Below is a list of the firm’s limited partners, as tracked by PitchBook below.

Major Deals

5Y Capital’s portfolio firms are overwhelmingly Chinese and tech focused. But “tech” doesn’t always mean just artificial intelligence or electric vehicle companies — for 5Y, it spans companies involved in short-form video platforms, biopharma, and small commercial satellites.

5Y’s early-stage investment model also means that the company is typically getting in on the ground floor. When its investments succeed — and they often have — the payoff can be massive. Several of its investments subsequently led to high-profile initial public offerings: Xpeng, Agora, and Kuaishou all became listed companies in the past year.

Below are some of 5Y Capital’s most successful investments.

One Investment: MedBanks

One of 5Y Capital’s most recent investments was in Medbanks Network Technology. The Beijing-based healthtech company was founded in 2014 and offers services for patients, medical providers, and insurance companies, connecting patients with doctor’s appointments and specialists, pulling together a wealth of cancer data, providing clinical trial services, and offering a one-stop insurance and healthcare provider.

5Y invested initially invested in Medbanks in December 2020, participating in a more than $300 million fundraising round led by the internet giant Tencent and the Hong Kong asset manager Jeneration Capital.

Take a closer look at the ultimate owners of its Beijing entity.

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