Xiongan New Area to Set Up Another 10 Billion Yuan Science and Technology Innovation Fund

On April 1, 2017, the Xiongan New Area was officially established. This national-level new area, positioned as a "project of the millennium and a national priority," is one of the engines driving the coordinated development of the Beijing-Tianjin-Hebei region.

Since 2019, the Xiongan New Area has established a series of industrial funds and actively participated in primary market investments. The industrial guidance fund with a scale of up to 10 billion yuan established at that time has played an important role in promoting the industrial development of Xiongan in the past six years.

Recently, the Xiongan New Area has established the "Hebei Xiongan Science and Technology Innovation Equity Investment Fund" with a scale of 10 billion yuan. Different from the previous guidance funds, this new fund focuses on "science and technology innovation." This marks that the Xiongan New Area has developed from a place with everything to be done eight years ago to a new stage of undertaking scientific and technological innovation in the Beijing-Tianjin-Hebei region.

Who is in charge of Xiongan's science and technology innovation investment?

Let's first take a look at the establishment of the new fund.

This billion-yuan-level science and technology innovation fund is jointly established by the Hebei Xiongan New Area Management Committee with an investment of 998 million yuan, and China Xiongan Group Fund Management Co., Ltd. (hereinafter referred to as "Xiongan Fund") and Hebei Xiongan Xiongchuang Future Industry Investment Management Co., Ltd. with an investment of 10 million yuan each.

In the past two years in Hebei, a total scale of 10 billion yuan is considered a relatively large industrial fund. Last year, Shijiazhuang established an industrial fund with a total scale of 4.5 billion yuan, and the year before last, Tangshan established a robot industrial fund with a scale of 5 billion yuan. Both places have made great efforts in equity investment, but their fund scales are not as large as that of the Xiongan New Area.

The executive general partner of the Xiongan Science and Technology Innovation Fund is China Xiongan Group Fund Management Co., Ltd. It is a subsidiary of China Xiongan Group and the most important fund manager in the Xiongan New Area. The "big shot" behind it, China Xiongan Group, was established in 2017 with a registered capital of 30 billion yuan. It is a "new urban operation service provider" serving the development and construction of the Xiongan New Area. Different from other investment companies in Hebei, it is the only provincial key backbone enterprise established with the investment of the Hebei provincial government in Hebei Province, which shows its strategic positioning and influence in Hebei Province.

In 2018, the fund management company under the Xiongan Group was established and entered the equity investment field the next year. According to CVSource investment data, Xiongan Fund currently manages 13 industrial funds (see the table below).

Among these 13 funds, in addition to the newly established science and technology innovation fund, the most noteworthy one is another billion-yuan-level mother fund - the Xiongan Industrial Investment Guidance Fund. It started preparations in 2018 and has currently invested in eight subsidiary funds, including the Hebei Xiongan Tuspark Development Fund, the Xiongan Major Scientific and Technological Achievements Transformation Fund, the Xiongan Science and Technology Innovation Seed Fund, and the Angel Fund.

According to its officially disclosed plan, the 10-billion-yuan Xiongan Industrial Investment Guidance Fund and the newly established 10-billion-yuan Xiongan Science and Technology Innovation Equity Investment Fund will promote the formation of a more complete fund management system in Xiongan and provide assistance to enterprises.

Looking at the investments again. Incomplete statistics show that Xiongan Fund has currently invested in 11 companies. It includes both early-stage angel and seed-round investments, as well as strategic investments and private placements of listed companies. It covers the entire life cycle of enterprises from the early, middle, and late stages to the secondary market.

Especially after 2024, Xiongan Fund's investment began to accelerate. In that year, it successively invested in three companies: Shijing Optoelectronics, Yuding Additive Manufacturing, and Xinsheng Technology. In the first half of this year, Xiongan Fund also invested in five companies: Wenzhun Intelligence, Hongqing Technology, Mekabot Robotics, Xiongan Future City, and Huaqing Zhiyan. Moreover, the investment cycle is very wide, from the seed-round Huaqing Zhiyan to the semi-primary Shijing Optoelectronics, and even becoming the first major shareholder of Tus-Holdings Co., Ltd. alongside Tsinghua Holdings.

Mekabot Robotics is a representative case of the above investments. This company was established in Beijing in 2016 and is a well-known domestic intelligent industrial robot manufacturer. Its products have served various scenarios such as automotive, home appliances, steel, and logistics. In its early days, Mekabot Robotics received investments from well-known institutions such as Galileo Capital, Qiming Venture Partners, Sequoia Capital China, IDG Capital, Source Code Capital, and Meituan's strategic investment department.

At the end of last year, the "Xiongan Major Scientific and Technological Achievements Transformation Equity Investment Fund (Limited Partnership)" managed by Xiongan Fund participated in Mekabot Robotics' Series D+ financing. In March this year, the Hebei State-owned Enterprise Reform and Development Fund also participated in this company's Series E financing. Just before the disclosure of Xiongan's investment, Mekabot Robotics moved its company headquarters to the Xiongan New Area.

Where will the billion-yuan science and technology innovation investment go?

When Mekabot's global headquarters was established in Xiongan, its founder, Shao Tianlan, said that the special policies on artificial intelligence and robotics and the talent policies in the Xiongan New Area are very attractive to Mekabot.

According to the plan of the Xiongan New Area, artificial intelligence (robotics) is one of the key investment areas. And it's not just Mekabot. In January this year, Ubtech also settled in the Xiongan New Area. According to the data officially announced not long ago, the Xiongan New Area has released 20 achievements of large model independent innovation enterprises, and more than 50 artificial intelligence enterprises have settled in Xiongan. This includes the artificial intelligence research institute jointly established with Tsinghua University.

In addition to artificial intelligence, according to the "Action Plan for Promoting the Development of Future Industries in the Xiongan New Area," sectors such as aerospace information and satellite Internet, and new materials are also key areas for its layout.

It may surprise many people. China Satellite Network Group Co., Ltd., the only central enterprise in China engaged in the design, construction, and operation of the satellite Internet, was established in the Xiongan New Area in 2021. Taking this as an opportunity, the Xiongan New Area began to vigorously develop the aerospace information industry.

In February this year, the "Xiongan Science and Technology Innovation Growth Fund" managed by Xiongan Fund invested in Hongqing Technology under Landspace. This is a company focusing on the research, development, and manufacturing of low-orbit broadband communication satellites. It had previously received investments from Cornerstone Capital, Beijing Guorui Investment, and the Beijing Advanced Manufacturing and Intelligent Equipment Industry Investment Fund. Currently, Hongqing Technology has also settled in the Xiongan Science Park.

The industrial plan for new materials was formulated earlier. In 2018, the central government clearly identified the new materials industry as a key development area in the "Master Plan for the Hebei Xiongan New Area." A representative investment case of Xiongan Fund is that in April 2024, the "Xiongan Major Scientific and Technological Achievements Transformation Equity Investment Fund" led the investment in Yuding Additive Manufacturing. This is an enterprise founded in 2014 by academician Wang Huaming, a Chinese engineering academician and an expert in metal 3D printing. Its main business is the manufacturing of high-performance metal materials for large key components of major equipment. At that time, the post-investment valuation of this company exceeded 3.3 billion yuan, and it is currently planning for listing.

The above industrial development plans and investment cases also imply the investment direction of the new fund. Artificial intelligence, aerospace, and new materials are undoubtedly the most concerned sectors. In addition, life sciences, future energy, and future industry technology services are also within the scope of the science and technology innovation fund. According to Xiongan Fund's accelerating investment pace, it is believed that more relevant enterprises will settle in Xiongan in half a year or early next year.

This article is from the WeChat official account "LP Spectrum." Author: Yang Boyu. Republished by 36Kr with permission.