June 25, 2015 / 9:31 PM / 2 years ago

Oculus-backer Formation 8 raising $400 million venture fund

SAN FRANCISCO (Reuters) - Formation 8, the venture-capital firm known for backing virtual-reality company Oculus VR, has filed to raise a $400 million fund for late-stage investments in Asia, highlighting the growing appeal of the region for private-company investors.

The sign outside the Oculus VR booth is seen at the International Consumer Electronics show (CES) in Las Vegas, Nevada January 6, 2015. REUTERS/Rick Wilking

The filing, made Thursday at the Securities & Exchange Commission, comes as privately held ride-hailing service Uber says it plans to invest more than $1 billion in China this year, and as many privately held Asian companies break the $1 billion valuation mark, including phone maker Xiaomi, online retailer Flipkart and lending platform Lufax.

Formation 8 will likely spread the funds among five to seven late-stage companies in the region, a source familiar with the firm’s thinking said.

A spokeswoman for the firm declined to comment on the fundraising.

Given that several investors participate in each funding round, that implies rounds well above $100 million, the purview of extremely large private companies and an area where Asia is an increasingly important player.

Asia has drawn 44 funding deals, year to date, of $100 million or more, the same number as the United States, according to venture tracker CB Insights. Europe has drawn 10 in the same time period, CB Insights said.

Late last year, Formation 8 signaled an expansion into Asia by hiring Singapore-based Joel Sng, himself an early investor in Xiaomi, as a partner charged with helping the firm’s largely U.S.-based portfolio companies cut deals with Asian partners.

Formation 8 was founded three years ago by entrepreneurs including Joe Lonsdale, a former executive at payments company PayPal and co-founder of data company Palantir Technologies. Jim Kim and Brian Koo are also co-founders. Last year, it raised its second fund of $500 million.

Formation 8’s Asia-based portfolio companies include Memebox, an online beauty retailer based in South Korea. Last year, social-media company Facebook bought Oculus for $2 billion.

Reporting by Sarah McBride; Editing by Alan Crosby and Leslie Adler

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