Billionaire Johnson Family’s VC Fund to Exit China Tech Holdings

A venture capital fund backed by Fidelity Investments’ billionaire Johnson family plans to unload its Chinese technology holdings amid heightened tensions between Beijing and Washington, according to people familiar with the matter.

Eight Roads, Abigail Johnson’s family firm that was an early investor in China’s internet sector, began exploring the sale of all its investments in about 40 Chinese tech companies earlier this year, the people said, asking not to be identified discussing a private matter. 

The companies are being sold at a discount ranging from 60% to 80% of their peak valuation, which was about $1 billion combined, the people said. The negotiations are ongoing and could be subject to change, the people added. The stakes include that of self-driving car company Pony AI Inc., which Eight Roads still holds due to a lockup period, the people said.

Growing geopolitical tensions were a key driver behind the move, after the US imposed restrictions on investments in China’s advanced technology sector in January, the people said. Since then, trade friction has escalated after US President Donald Trump hiked duties on Chinese goods, prompting retaliation from Beijing.

Eight Roads made a decision last year to not actively pursue new investments in China tech companies in response to the changing regulatory environment, a spokesperson said in a statement to Bloomberg News. A smaller team will continue to manage the firm’s existing portfolio, and focus on its health-care business in China, the company added, declining to comment further. 

The firm has invested more than $1.1 billion in about 130 companies in China, according to its website. Globally, the fund that was started in 1969 by the Johnson family has backed some 500 companies in markets including India and Japan. Eight Roads has more than $11 billion in assets under management. 

The sell-down follows a broader pullback by the firm in China. About a year ago, Eight Roads let go more than a dozen people on its China tech team, leaving a handful to take care of its existing portfolio, a person familiar with the matter said. The most recently announced China tech deal by Eight Roads was in 2023. 

According to Eight Roads’ website, more than 20 people out of its some 30 staff in China focused on health care, while four focused on tech. 

Eight Roads’ retreat underscores the challenges US investors face in China. Investment exits via public markets have been tightly controlled, as many startups need a nod from China’s securities watchdog even when seeking to list offshore. 

In Hong Kong, recent blockbuster deals like the listing of the Contemporary Amperex Technology Co. revived sentiment for initial public offerings. Yet longer term investors are still waiting for more conviction to return to the region, especially for early-stage tech firms confronting an economy under deflationary pressure.

Some investors have shown renewed interest in the country’s AI scene, with more on-the-ground visits after DeepSeek’s advances stunned Silicon Valley. But many are cautious committing new capital. Investors who have shown interest in Eight Roads’s assets include some Chinese tech-focused private and venture capital funds and a Hong Kong-listed financial firm, the people said. 

After a separation in 2019 from Fidelity International, which is backed by the Johnson family, Eight Roads said it still counts on the Fidelity network for funds and had no plans to raise third-party money.

Abigail Johnson is the chief executive officer of FMR Corp., the parent of Fidelity Investments. She has a net worth of more than $39 billion, according to the Bloomberg Billionaires Index.

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