Innofund Hands Reins to VCs in Tech-SMEs Equity Deal

Six venture capital firms inked a deal with the Chinese Ministry of Finance and the Ministry of Science and Technology (MoST) to invest technology-focused small and medium-sized enterprises linked to MoST's Innovation Fund for Technology Based Firms (Innofund). The six firms - Shanghai Venture Capital Co. Ltd., China-Singapore Suzhou Industrial Park Venture Company, Govtor Capital, Shandong High-tech Investment Corporation, Wuhan Huagong Venture Capital Co. Ltd. and Hefei Innovative Technology Venture Capital Co. Ltd. - will be involved in Innofund equity investment projects after having established separate equity investment funds with a combined value of RMB 1.05 billion. Innofund will contribute RMB 159 million to the total.

Five Shanghai-based organizations announced the establishment of three equity investment funds to target high-tech SMEs, Oriental Morning Post reported on April 21. A total of RMB 1.5 billion will raised from both domestic and overseas sources for the funds, said the report. The organizations, Shanghai Small & Medium-sized Enterprises Development Coordination Office, Shanghai High-tech Service Center, Shanghai High-tech Center, Shanghai Municipal Education Commission High-Tech Center and Shanghai Commercial Investment Co. Ltd, have already raised RMB 300 million, according to the report.

Meanwhile, CDF-Capital Co. Ltd. and Suzhou-based SND Venture Group agreed to establish a Suzhou CDF-Capital Fund, with a targeted value of RMB 300 million, on April 16, reports Xinhuanet.com. First stage fundraising will contribute RMB 100 million, and investments in high-tech SMEs based in Suzhou Hi-tech Zone will be given priority, said the report.