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Big Chinese companies backing innovators

Reporter: Guan Xin 丨 CCTV.com

05-20-2016 16:34 BJT

Traditional venture capitalists are not the only ones that are supporting start-ups in China these days. More and more large Chinese companies are launching their own investment arms to fund start-ups because innovative capability is key to long-term success.

It might be easiest to make payments in the internet age by scanning your face. The facial recognition technology was developed by Megvii, a start-up company established five years ago. Megvii has quickly become an industry leader and its technology is widely used for online payments and other security areas. The company’s angel investment comes from tech giant Lenovo.

“I think it is very important that the investor understands what the start-up’s mission is. What we want to do is to let the computers have their own eyes, and then in the future, have their own brains,” said Tang Wenbin, founder & CEO of Megvii Inc. 

“That is our long-term goal. So when we sought investment, it is very important that the investor has a deep understanding of the technology.”

Lenovo is taking its investment business to a higher level. It launched the Lenovo Capital and Incubator Group in May to invest in start-ups within and outside of Lenovo, especially those with core technologies.

The president of the new group, He Zhiqiang, says the investment arm takes a long-term view of Lenovo’s innovation strategy.

He said, “Lenovo Capital and Incubator Group will focus on investing in opportunities of five or ten years landscape, which may have a huge influence back to the current businesses.”

The government is promoting a start-up economy and mass innovations and that has got venture capital and angel investments in the country booming.

Lenovo is not the only big company to launch its own investment fund and incubators. Retail giant Suning also has set up a start-up camp, to foster innovation in products and business models. Sun Weimin of the Suning Commerce Group says that compared to VCs, Suning can integrate its resources and provide an ecosystem for new start-ups.

“We are transforming from a retailer to an Internet platform, and are building an eco-system to integrate innovative resources. We have a lot of resources, such as big data, office areas and software platforms that can be great helps to start-up companies,” said Sun Weimin, vice chairman of Suning Commerce Group.

Analysts say innovation has become a key driver of China’s economy, and many industries are undergoing rapid changes. Large companies can invest in future trends and sustain their competitiveness in the long-term by nurturing their own start-ups.

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