A venture capital firm backed by the Chinese supervision is aiming to endow up to $500 million into U.S. and European technology startups. Silk Ventures, which has workplaces in Silicon Valley, Shenzhen, London and Beijing, will put a meticulous focus on fintech, artificial intelligence, medical technologies and startups concentrating in related sciences.
Silk Ventures Founding Partner Angelica Anton in an interview, said, “The mission is to bond technology companies from Europe and the United States, Israel as well, to the Chinese market.”
Silk Ventures joins a horde of Chinese funds looking for stakes in Western startups. In February 2016 Cocoon Networks Ventures initiated a 500 million pound ($720 million) venture fund targeted at U.K. startups in fields from hardware to biotechnology. The China-backed CreditEase Fintech speculation Fund in March declared three investments in U.S. fintech firms.
Of the $500 million hoist by Silk Ventures, half comes from SASAC, the State-owned Assets management and Administration Commission of the State Council, which managed and regulates state-owned ventures in China.
The left behind half of Silk’s fund has been raised from a group of investors the corporation declined to recognize. It said in a declaration that it will announce its preliminary investments in July. The company launched an accelerator based in London’s Canary Wharf in 2015, which provides hold up to China-focused startups.
Breaking into the Chinese market is a difficult outlook for a startup in part due to stern governmental regulations, as well as huge existing competition in lots of sectors, or simply the complexity of winning over locals. Airbnb Inc. in March endeavor to tackle this by adopting a new brand name in China: “Aibiying”.
Silk Ventures aim to match Chinese corporate community with European and American startups creating technologies that can fill the local demand. The group’s VC partners in London and Silicon Valley will spotlight on sourcing those startups for possible investment.
“It’s definitely a pull-based association and it’s always been,” said Anton. “You’ve got startups here that need to access the market; you’ve got corporates there who are extremely unproductive, very old fashioned. They must need to innovate, they need to participate and compete globally, and they do that by working together with startups that fetch the technology.”
Silk Ventures will deem individual investments as much as $50 million or ten percent of the fund’s entire.
The firm will be moderately focusing on fintech investments, prominence blockchain, currency exchange, and “regtech” as key sectors of interest. Regtech is the rising branch of IT that aids guidelines, due diligence, economic security and risk supervision.
There are some sectors of industry Anton said she would fancy to avoid. Payment technologies are one, in tiny proportion because of the high level of existing industrial rivalry from local players such as Tencent, Alipay, and WeChat. “It’s a very, very well-built area in China already. It’s very tough for a new entrant to make impressive of it,” said Anton.