Capital floods 'future industry' in China
After quiet period, venture capitalists race to fund China "future industry" startups like space, quantum, AI.
Two days after SpaceX IPO, Chinese space startup hold first funding round. Shanghai-based Tectronic Maritime Space Systems pitch sea rocket launch service to close space race gap with US.
At event with 50 venture capitalists, CFO Gu Mei outline goal to become "Maersk of global commercial space transport". Company seek 150 million yuan ($22 million) at 1.5 billion yuan ($209.8 million) valuation.
Tectronic start three months ago. Plan three more rounds to raise 3 billion yuan ($420 million) in 5 years. Target 2032 IPO at 50 billion yuan ($7 billion) valuation, 30 times current value.
"Demand high, supply low, time run out. Investors this round expect 26.7x return," Gu say at June 14 event.
Reuters report ambitious funding show hype in sectors Beijing call "strategic emerging and future industries", including space, quantum, nuclear, brain-computer interface.
Modified Long March-7 rocket carry satellite launch from Wenchang Space Launch Site in Hainan, China, June 23. Photo: AFP
Q1 KPMG report China VC activity rebound, drive by interest in AI, deep tech, biotech, semiconductor, space.
Big deals include Rokid $2 billion round (AR glasses, AI wearables), Earendil Labs $787 million (AI biotech drug discovery), iSpace $723.7 million (space tech, commercial rocket).
"Space tech, defense tech sectors expect to keep draw interest," KPMG Q2 report forecast.
First 5 months, VCs register 154 billion yuan ($21.5 billion) investment in China, beat last year total, Asset Management Association of China say. "Never see this hype level in career," Yan Kai, veteran VC at Ivy Capital Shanghai, say.
He say pre-revenue startup can raise billions first round. Investors queue for second, third rounds before first close.
VC surge match Beijing push for "future industries" in March 5-year plan. Plan prioritize robotics, aerospace, biotech, hydrogen.
June, China issue rules support domestic IPOs for pre-revenue, pre-profit "future industry" tech startups.
Private rocket firm LandSpace, China closest SpaceX equivalent, plan IPO. Huang Yan, co-founder Lantern Capital Shanghai (invest since 2016), expect 100x return after decade.
"Key is match state goal with market need," he say. "Strategy follow national direction, select target with market approach."
US-China tech war drive VC deals to local yuan funds. Yet, Preqin data show 5 funds raise $4 billion USD-denominated capital by June 12.
This beat annual totals of past two years. ZhenFund, Qiming Ventures, Capital Today return as global investors eye China tech again.
Raymond Feng, Atom Ventures, say fierce fund rivalry for nuclear, quantum, embodied AI (AI in physical robots). "Everyone dump cash in future industries."
Ni Zhengdong, Zero2IPO Holdings, say early-stage China investors have FOMO, rush to deploy cash.
Reuters note while Tectronic funding offer high returns, hype inflate valuations, spark investment bubble fears.
Chinese officials set many new goals for economic development in the 2026-2030 period. 4
How China's economy developed thanks to five-year plans
After more than 70 years of implementing five-year plans, China has become the largest manufacturer and the second-largest economy in the world. 47