Sierra Ventures, a Silicon Valley venture firm with $1.1 billion in committed capital, said this week it made its first investment in China through Gobi Partners, a Shanghai-based venture capital firm focused on early-stage technology companies.

The amount of the investment was not disclosed. But the investment—Sierra’s first as a limited partner in another fund—helped Gobi Partners boost the size of its fund to $50 million.

International Business Machines, NTT DoCoMo, and The McGraw-Hill Companies joined Sierra as co-investors in the fund, which will funnel its cash into information technology, internet, wireless, and digital media companies.

“We wanted to partner with some early-stage investors in China, as it is not so practical for us to go source early-stage investments 4,000 miles from here,” said Ben Yu, a venture partner at Menlo Park, California-based Sierra Ventures. “We wanted to see the earliest trends of the latest developments happening in China.”

For example, the wireless gaming market is more developed in Asia than in the United States, he said, “and it would be wise for us to know about other successful cases in China, such as TOM online.” Internet portal TOM Online, based in Beijing, is a provider of online and wireless services.

Keeping a finger on the pulse of what’s happening in the Chinese market will help Sierra make better investment decisions in the U.S. and better serve the half dozen or so of its portfolio companies that have operations in China, said Sierra founder Peter Wendell.

The China Influence

“Many of the deals we look at every Monday in partner meetings are going to be influenced by what’s going on in China, so it will better inform our U.S. investing practice,” said Mr. Wendell.

Sierra may also eventually make direct investments in China, and this strategic partnership will help the firm identify promising opportunities, he said, adding, “Those are our motivations rather than an instant Gold Rush view of China.”

Gobi, founded in 2002 by Wai Kit Lau, Thomas G. Tsao, and Lawrence Tse, has already made several investments. Its portfolio companies include Digital Media Group, which operates digital media networks in China’s subway systems, and Lingtu, a digital-mapping and location-based services provider.

“A financial relationship with a major Silicon Valley venture firm was the missing piece in our capital structure, and we are very happy now to establish this arrangement,” said Mr. Tsao.

The two venture firms had been discussing the partnership for about a year, said Mr. Wendell. “We’ve had all the Gobi partners over to Sierra for a week so that we could really spend time with them and so they could spend time and see intimately what a U.S. venture firm looks like, and Ben Yu and I have been over to their office for a week.”