Menlo Park and Shanghai-based venture capital company Granite Global Ventures (GGV), whose China investments include Alibaba, Hurray! and Tudou, has significantly increased its presence in China through a strategic partnership with Shanghai venture firm SIG. SIG partners Zhuo Fumin and Jessie Jin join GGV as managing partners, while SIG's two other partners, Michael Kuan and Steve Chu, join GGV as venture partners. GGV and SIG have co-invested together in the past, GGV said at a press briefing on Tuesday.

GGV is also increasing the size of its Granite Global Ventures III fund, originally raised in 2006, from US$410 million to US$610 million. The fund will continue to focus on expansion-stage investments and is expected to be fully invested by 2010. The company's name will also change from Granite Global Ventures to GGV Capital.

Granite and SIG's partnership shows the changing face of the venture capital industry in China, as more firms go local and focus on more traditional industries and retail plays. SIG manages China Venture Star, an RMB-denominated fund. With SIG's partners' background in consumer and retail deals--some of their previous investments include Shanghai Bright Dairy, Lianhua Supermarkets and Shanghai Oriental Shopping Center--GGV's China investments are likely to take on a more retail/consumer flavor. As for future investments in China, GGV said that it is currently looking at a candy store chain and is still very interested in the online gaming space.

GGV and SIG will continue to manage their funds separately, but GGV managing partner Hany Nada said to look for the two firms to continue to work more closely together in the future.

GGV's investments in China include:

Alibaba
Hurray!
Tudou
BlogCn
Bokee
Chamate
hiSoft
Onewave
Panorama Stock
Shandong Rongqing
Yicai