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Chinese Tsinghua to Start R&D Fund, 1,000 Incubators in Innovation Push

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October 18-20, 2023 / Tucson, AZ
The annual summit for research institution gap fund and accelerator programs, including proof of concept programs, startup accelerators, and university venture funds

The Story

Tsinghua Holdings will invest no less than 50 billion yuan ($7.6 billion) in research over five years and set up a fund to help commercialize scientific discoveries, Chairman Xu Jinghong said in an interview.

The company, a state-owned enterprise that was founded in 2003 by Chinese president Xi Jinping’s alma mater, Tsinghua University, kicked off two projects on Sunday. One focuses on helping startups and the other on commercializing scientific findings, Xu said at the World Economic Forum in Tianjin.

The firm will set up 1,000 business incubators in China by 2021 and another 50 in nations including the U.S., the U.K. and Germany, Xu said. The size of a parent fund, which invests in other funds that put money into startups, will exceed 20 billion yuan in the next five years, he said.

“Our goal is to cultivate 500 startups that are valued at more than 100 million yuan within the next five years,” said Xu, who was a Tsinghua alumnus. “China is still lagging in terms of indigenous and core technologies, and there needs to be some companies to act as pioneers and push ahead with innovation.”

Tsinghua Holdings will set up a 10 billion yuan fund linked to scientific discoveries, he said.

The company’s efforts come as Premier Li Keqiang calls for innovation, and after the nation’s campaign to encourage entrepreneurship helped create tens of thousands of small firms since 2014. China is seeking new engines of growth after economic expansion cooled to the slowest pace in more than a quarter century. However, bureaucracy, the dominance of large state-backed firms and lax intellectual-property protection could hinder an entrepreneurial culture.

“We have no doubts that we’ll make a profit” on the project that helps startups,” Xu said, as almost all of Tsinghua’s existing incubators are profitable. The firm may need a “longer time” for its investments in scientific findings to make money.

Tsinghua’s parent fund has invested in 50 smaller funds that put money in startups, Xu said. The company will be interested in small firms with their own technologies, but will also touch on culture and Internet startup.

Tsinghua Holdings will focus on industries it is familiar with when it explores overseas markets through acquisitions. The firm will continue to expand in the integrated circuits industry, and will “take new steps” in environmental protection, new energy and materials, he said.

“The level of internationalization for the company is very, very low,” said Xu. The company’s goal is for overseas business to account for 30 percent of its revenue “in several years,” up from about 5 percent now, he said.

Source: Tsinghua to Start R&D Fund, 1,000 Incubators in Innovation Push – Bloomberg

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