Granite Asia Pivots Strategy and Expands Private Credit Following GGV Capital Geopolitical Split

Singapore-based venture capital firm Granite Asia is reshaping its investment strategy across Asia under senior managing partner Jenny Lee, following its formal separation from U.S. venture capital firm GGV Capital amid escalating geopolitical scrutiny over foreign technology investments.

Granite Asia owes its start to geopolitics. In July 2023, a U.S. House of Representatives committee said it would probe investments by U.S. venture capital firms, including GGV Capital, into China’s AI and semiconductor sectors.

Two months later, GGV announced that it was splitting in two: It divided into a U.S.-based fund, called Notable Capital, and a Singapore-based fund focused on China and Southeast Asia.

In March 2024, Lee took the reins of the now-independent Asian fund, named Granite Asia as a callback to GGV Capital’s original name, Granite Global Ventures. Managing $5 billion in assets under management, Granite Asia established its headquarters in Singapore to operate as a fully regional platform under Lee and managing partner Jixun Foo, while the former North American operations officially rebranded as Notable Capital under partners Hans Tung and Glenn Solomon. Prior to the structural separation, GGV Capital managed approximately $9.2 billion in assets under management across its global offices.

The probe by the House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party targeted U.S. venture funding in Chinese artificial intelligence, quantum computing, and semiconductor firms. The regulatory pressure intensified in August 2023 when U.S. President Joe Biden issued Executive Order 14105, which placed explicit restrictions on outbound American equity and venture capital investments into Chinese sensitive technology sectors.

Addressing the changing landscape, Lee noted that global capital markets are dividing into distinct regional economic blocks that require localized, country-specific funding strategies. “In Asia, the tea leaves are pointing to a very obvious bifurcation. As we go forward, the globe is going to go into cluster economies. Today, it’s the U.S. and China. Tomorrow, it may be a different region,” Lee said. She emphasized that a single global model is no longer viable, stating that “a one-fund-fits-all model is not going to work going forward” as investors navigate political risk, capital liquidity, and company public listing options.

To address these regional shifts, Granite Asia is expanding its financing model beyond traditional equity into private credit. Lee explained that enterprise-grade companies across Asia, particularly in Singapore and Hong Kong, are transitioning into second- and third-generation family succession planning. While these businesses historically relied on local bank loans and organic growth, many are now seeking hybrid financing and independent board expertise to manage operational expansion without requiring founders to sell their businesses entirely.

The shift toward credit and flexible financing occurs alongside a sharp contraction in regional deal flow. According to Bain & Company’s Southeast Asia Private Equity Report 2024, private equity deal value in Southeast Asia dropped nearly 40% in 2023 to $9 billion, down from $14.7 billion in 2022. The sharp decline was driven by macroeconomic headwinds, elevated interest rates, and reduced late-stage capital availability.

In response to changing geopolitical and market dynamics, Granite Asia is focusing on supply chain diversification across the Global South. The investment approach involves developing manufacturing intellectual property in regional hubs such as Singapore and the Middle East, while placing assembly and operational facilities in larger South and Southeast Asian markets, including Indonesia, Malaysia, Thailand, Vietnam, and India, to build alternative supply chains for global markets.

Lee noted that restoring liquidity to Asian private equity and venture capital markets requires the establishment of strong local exit mechanisms for growing businesses. “You need to have the Taylor Swift of IPOs, one that everyone is eager to join,” Lee said. She added that while founders of Asian startups increasingly prefer local listings where their products and brands enjoy strong consumer recognition, regional capital markets must provide sufficient capital across all development stages to allow companies to complete public offerings successfully.