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Cathay Innovation launches new €1bn fund

The fund wants to back companies working on the sustainable transformation of industries.

By Freya Pratty

Cathay Innovation, a global VC firm based in Paris, has launched its third fund, with €1bn to deploy. The latest fund will be used to back companies working on the sustainable transformation of industries. 

How does Cathay work?

Cathay Innovation was created in affiliation with the global private equity firm Cathay Capital. Cathay Innovation has offices in Paris, the US, China and Singapore.

The latest fund has 15 companies acting as LPs, including Sanofi, Total Energies, Valeo, BNP Paribas Cardif, Groupe SEB, ADP and CMA CGM. As well as acting as LPs, the companies also partner with the startups the firm backs. 

What’s Cathay looking for now?

The new fund is Cathay’s biggest to date (the first two funds were worth €287m and €650m respectively). 

The latest fund will be used to back companies across Europe, the US and Asia. It’s particularly focused on Series A and B, writing cheques between €5m and €80m, but has room for follow-on rounds too.

“The focus this time is on the sustainable industrial transformation,” explains Denis Barrier, cofounder of Cathay. Industries are undergoing rapid change, he says, and Cathay wants to back the tech companies instigating that change.

“We are 15% through the digital transformation,” says Barrier, “so we have 85% to go.”

The new fund has a particular focus on consumer tech, enterprise software, AI, inclusive fintech, digital health, new mobility and energy tech. In Europe, Barrier says that sustainability — in particular energy and mobility — are interesting sectors. 

Where have they invested before?

Launched seven years ago, Cathay has backed 19 unicorns, including delivery company Glovo and French fintech Ledger

Several of the companies it’s backed have gone on form partnerships with the companies acting as LPs. Owkin, a French AI drug discovery startup, signed a collaboration  deal with multinational healthcare cooperation Sanofi, for example.

Cathay’s secured seven exits, including, recently Spanish EV charging startup Wallbox and Pinduoduo, a Chinese agtech platform.  

Freya Pratty is a reporter at Sifted. She tweets from @FPratty and writes our sustainability-focused newsletter you can sign up here

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