Chongqing’s industrial fund landscape has received a major upgrade with the release of a new fund worth 30 billion yuan ($4.7 billion). The Western (Chongqing) Science City Industrial Development Fund was officially announced at the 2023 Chongqing Venture Capital Conference on October 26. The fund, established by Chongqing High-tech Development Group and Xiyong Microelectronics Park Company, aims to focus on new energy vehicles and other modern manufacturing tracks.
The initial phase of the fund has a scale of 10 billion yuan, and it will operate under a “parent fund + sub-fund + direct investment” model. The fund aims to cover the entire life cycle of enterprises through its operation, consisting of science and technology innovation funds, industrial investment funds, and industry development sub-funds.
One notable aspect of the fund is its competitive allocation ratio. Government capital will contribute up to 90% for industrial investment funds and 50% for science and technology innovation funds. This allocation will help ease the fundraising pressure on investment institutions and make better use of state-owned capital for guiding investments.
Chongqing’s equity investment market has been expanding in recent years, attracting venture capital resources due to its focus on hard technology investments. A report titled “2023 Chongqing Equity Investment Market Development Report” reveals that the number of registered equity investment fund managers in Chongqing has reached 130, almost four times the number in 2014.
The report also highlights the trend of investing early, investing small, and investing in technology. In the first half of 2023, the capital favored industries such as biotechnology, semiconductors, machinery manufacturing, new materials, and automobiles. Seed-stage cases accounted for 16.7% of the investments, surpassing Shanghai, Beijing, Chengdu, Xi’an, and other cities.
Furthermore, nearly 70% of listed companies in Chongqing received support from venture capital or private equity (VC/PE) firms from 2016 to the first half of 2023. This support has significantly contributed to the development of listed companies in the region.
To further enhance the development of local industries, venture capital experts at the conference provided suggestions. Gan Shixiong, a founding partner of Shengshan Capital, advised biopharmaceutical companies to focus on specialization, innovation, and attracting investment through capabilities and an open attitude. Tao Feng, a founding partner of Boyuan Capital, highlighted the potential progress of Chongqing’s biopharmaceutical industry given the population structure and economic development in China.
Liu Bo, the general manager and managing partner of TusStar Venture Capital, discussed the semiconductor industry and emphasized the importance of talent, technology, resources, and capital. He suggested leveraging the synergy between Chengdu and Chongqing to cultivate talent, optimize the industrial chain, and create a thriving ecosystem for scientific and technological innovation and venture capital in the field of chips and integrated circuits.
Chongqing is also accelerating the establishment of guidance funds, with 37 government guidance funds established by the first half of 2023. The Chongqing Industrial Investment Fund of Funds aims to strengthen and expand the industrial chain in the region.
It is important to note that the information provided is for reference only and should not be considered as investment advice. The Securities Times advises readers to exercise caution and make independent investment decisions.