Chinese Investors Lure European Startups With $715M Fund

Some Chinese investors are looking to branch out from the mainland.

According to a report by VentureBeat on Tuesday (Jan. 19), a Chinese investment firm is in the midst of introducing an investment fund with as much as $715 million in dry powder that is geared specifically for European startups.

[bctt tweet=”A Chinese investment firm is in the midst of introducing an investment fund with as much as $715 million in dry powder that is geared specifically for European startups.”]

The firm, based in London and known as Cocoon Networks, is a direct spinoff of China Equity Group, which was one of the early investors in Baidu, the online behemoth, and Hanxin Capital. The latter is a firm that has a “track record,” according to VentureBeat, in the biotech and cloud computing arenas. The goal of the fund, according to the report, is to find and invest in startups “whose products and services show promise and potential for growth in the Chinese market,” with an emphasis on FinTech, medical, biotech, fashion tech and the possibility of still other industries. The funding is part of a bifurcated process for Cocoon Networks, which will also bring an incubator operation to London.

As noted by VentureBeat, China, and particularly investors in China, have been looking westward in a strategy to capitalize on investment opportunities, especially in technology fields. In one notable investment that crossed over into Europe, Tencent took a stake in mobile/online game publisher Miniclip. VentureBeat noted that Israel has been a focus for would-be investors based in China. The converse is less certain, moving from West to East, as companies “struggle to gain a foothold” in China, due at least in part to regulatory requirements. However, one benefit from Cocoon Networks for European startups could conceivably come from strategic “aid in circumventing” those same issues.