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U.S.-Chinese Accelerator InnoSpring is Targeting $5 Million Fund

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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

InnoSpring, a two-year-old accelerator founded in Silicon Valley to help U.S. and Chinese tech startups expand across borders, is raising a second fund, Venture Capital Dispatch has learned.

The accelerator is also under new leadership, with Xiao Wang taking over as chief executive from Eugene Zhang.

Mr. Zhang, who co-founded both the Santa Clara, Calif.-based software tools vendor JEDA Technologies Inc., and the TEEC Angel Fund, which is operated by graduates of Beijing’s Tsinghua University, worked part time on InnoSpring. The accelerator now needs a full-time CEO, according to Dr. Wang, a Tsinghua graduate with a Ph.D. in biochemistry from Case Western Reserve School of Medicine who is called InnoSpring’s “chief fire starter.”

It also wants a staff that is young enough to socialize with young, up-and-coming entrepreneurs. “For the early-stage stuff…you have to be everywhere talking to everybody,” she said.

InnoSpring’s first fund, InnoSpring Seed Fund I, was $1.5 million and is allocated to 19 portfolio companies. The accelerator is now marketing a second seed fund targeted at $5 million and is talking to current investors, Dr. Wang said.

Founders are Tsinghua University Science Park, the property development and construction company Shui On Group, Northern Light Venture Capital and Silicon Valley Bank. Investors in Innospring’s current fund include Kleiner Perkins Caufield & Byers, Northern Light, GSR Ventures, China Broadband Capital and the TEEC Angel Fund.

InnoSpring is inspired in part by the Silicon Valley incubator Y Combinator and the venture capital firm Andreessen Horowitz, which give their portfolio companies help that goes beyond just cash, Dr. Wang said.

The accelerator started out offering basic training in entrepreneurship, but has now built a network of about 80 mentors, including Northern Light co-founder Feng Deng and Aerohive Networks Inc. Chief Technology Officer Changming Liu, to appeal to more mature entrepreneurs.

It has had some success. Fifty-four startups, many of them in stealth, are working out of its Santa Clara office. Of its 19 portfolio companies, more than half have gone on to raise more funding, including DewMobile Inc., which raised $20 million last month from Northern Light and IDG Capital Partners among others for a mobile app that lets users transfer files without being connected to the Web.

Four portfolio companies have revenue greater than $2 million, and there has been one exit, security company Trustgo Mobile Inc., which sold last year to the Chinese search engine Baidu Inc. for $36 million, according to Dr. Wang.

Still, while Innospring’s rise has coincided with rising U.S. interest in China and the Chinese market, the success of U.S. companies in China has been limited, she said, and InnoSpring is still figuring out how it can best work in the face of rapid technological and cultural change.

Next month, the accelerator is sponsoring a contest, Fly Your Ideas to China, and will fund three startup teams on a trip to meet local investors in Shanghai and Nantong, which are about an hour apart.

InnoSpring is partnered with the Nantong government on smart buildings, smart lighting and smart construction initiatives and hopes to get the government and local businesses to help startups with good ideas reduce the cost of creating prototypes and manufacturing products.

Chinese cities that are more developed than Nantong “will not be that hungry to support early-stage development,” Dr. Wang said. “We have budgeted ourselves five years to learn the business model that works for us. It will not be identical to anything that exists, and it has to be evolving.”

U.S.-Chinese Accelerator InnoSpring is Targeting $5 Million Fund – Venture Capital Dispatch – WSJ.

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