Innova Research Predicts Corporate VC to Lead Venture Investments in China

​It was reported that BASF Venture Capital closed an investment deal with Prismlab China Ltd., a Shanghai-based 3D printing company developing both 3D printers and 3D printing materials on Nov. 6, 2018. This was the first investment deal that BASF Venture Capital closed with a Chinese technology company. According to Innova Research, a market research and technology scouting service provider based in Shanghai, China, the quality of Chinese innovations has been improving, along with the growing R&D capability of the research teams from top Chinese universities and research institutes, such as China Academy of Science (CAS), creating a large number of high-tech start-ups and making China an ideal place for technology scouting and investment deal sourcing. 

The Chinese venture capital investments grew rapidly in the past few years, attributing to the huge funds brought in the market by both government-owned and private-owned venture capital companies (VCs), as well as corporate VCs (CVCs) from a large number of Chinese industry leaders such as Baidu and Tencent, and the CVCs from global leading multinational companies. However, the situation has been changed when the growth of the Chinese economy is slowing down and the amount of funds available for VC investment shrink. As a result, Chinese start-ups will find it more and more difficult to get funding and lower valuations are expected in the next few years, which creates good opportunities for CVCs.

In many cases, investing in start-ups at early stages in emerging technology fields needs more patience, as it takes a long time for the new technologies and their applications to get mature and be accepted by the market.  Generally speaking, CVCs can bear longer payback terms than VCs, which gives them advantages to acquire investment deals in these new technology areas. Besides, when the growth of the economy is slowing down, start-ups are more likely to favor investors who can bring business opportunities, which can be offered by some CVCs when selecting investment targets on the industry value chains of their own.   

Richard Jun Li, the founder and general manager of Innova Research, commented, “The shrinking of the venture investments in China actually offers good opportunities to CVCs who can take their time to select investment targets and close investment deals at more reasonable valuations. Innova Research expects that CVCs will lead the growth of the venture investments in China in the next few years and high-quality technological start-ups in China will create large opportunities to both VC and CVC investors globally.”

About Innova Research

Innova Research is a market research and consulting firm focusing on emerging technologies, including advanced materials, renewable energy, advanced electronics, industry internet and robotics, energy storage, among others. The company also provides technology scouting and deal sourcing services to corporate VCs, VCs and corporate R&D clients. Driven by primary research, Innova Research’s market intelligence reports, technology scouting and consulting services help our clients to make the right strategic and investment decisions in the fast-changing technology world. Visit for more information.

Source: Innova Research


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