Xi Venture Capital Ignites Innovation Engine with Reform

　　In 2021, Wuxi raised 104 new equity investment funds with a fundraising scale of 116.061 billion yuan, ranking first in the country; The scale of newly raised funds increased by 1159.3% year-on-year, ranking first in the country in terms of growth rate. The two 'firsts' will unleash the innovative power of Wuxi and bring strong impetus to the development of strategic emerging industries such as integrated circuits. How to attract billions of 'living water'? Wuxi Innovation Investment Group Co., Ltd., a municipal state-owned venture capital platform, contributed the majority of the financing scale. Its answer sheet is written as follows: Inspire vitality with the fire of reform and ignite the urban innovation engine.

Empowered by reform, a batch of heavyweight funds and projects have successively landed and opened up a "growth record". Xicheng Venture Capital has been "non-stop" on the road of deepening reform, continuously integrating business resources, improving the venture capital system, and accelerating the exploration of market-oriented institutional and mechanism reforms, bringing vigorous vitality and inexhaustible driving force to the development of enterprises. According to Hua Xiaofeng, Chairman of Xi Venture Capital, "Last year, the company incubated four market-oriented management companies with core teams holding 65% of the shares, and completed the acquisition of Yicun Capital. At the same time, a project follow-up mechanism and market-oriented compensation system were established at the group level, and income and performance growth were closely related, with incentives and constraints in parallel." Two "heavyweight players", the second phase of the 73.75 billion yuan China State owned Enterprise Structural Adjustment Fund and the 10 billion yuan Guolian Wentai 5G Communication and Semiconductor Industry Fund, have landed, making Wuxi the only city in China with two new fundraising funds worth billions of yuan; A city level angel investment guidance fund worth 1.5 billion yuan helps startups overcome the 'valley of death'; Participated in the cultivation of more than 100 listed companies such as New Clean Energy, Era Angel, and Zhongjie Precision Industry... With the continuous efforts of Xichuang Capital, an influential equity investment fund ecosystem is about to take shape. Benchmarking against Shenzhen Venture Capital, Xi Venture Capital is committed to deeply connecting entrepreneurial incubation and industrial upgrading with financial capital, gradually growing into an industry leader, entrepreneurial guardian, and industry enabler.

　　On July 1, 2021, four market-oriented management companies, namely Zhiyuan, Xinchuang, Qiyuan, and Hehe, were launched simultaneously. They adopted a novel business cooperation model - Xichuang Capital holds 35% of the shares of the market-oriented management company, and as a cornerstone investor, participates in no more than 30% of the fund shares when setting up a new market-oriented fund. Unlike the original group's 100% investment, this model allows us to bid farewell to the 'big pot' and share benefits and risks, tightly linking team interests with company operations. With the support of state-owned resources and funds, as well as full marketization, the head of the new venture, Shen Guangping, expressed some emotion about the changes in the mixed ownership reform over the past six months. Compared with the past, the team has enjoyed relatively independent decision-making power, with stronger subjective initiative in finding good projects. At the same time, they will actively explore external fundraising and actively attract social capital in order to expand the financing scale. In contrast to the development of the group's business, newly established and managed funds exhibit characteristics of small scale, specialization, and systematization. This type of fund is more likely to form synergies with group resources and related listed companies, making it easier for post investment management and subsequent capital operations. Some projects, when matched with suitable resources, experience a rapid increase in valuation

　　Resources are gathered, and local venture capital brands are becoming more and more bright. "The scale of management funds is relatively small, and there is a lack of head fund management institutions; high-level professionals are insufficient; local funds participate in the IPO of listed companies in a relatively low proportion, and there are fewer M&A funds and listed companies' fixed increase funds." A Survey Report on the Development of Private Equity Fund Industry in Wuxi, written by the Municipal Local Financial Supervision Bureau last September, pointed out that private equity funds in our city have developed rapidly, but there is also an embarrassment of the lack of local "leading" institutions. Continuous reform and progress have gradually highlighted the leading position of Xi Venture Capital in our city, with industrial resources constantly gathering and the city's venture capital brand shining brighter and brighter. Xi Venture Capital currently has a total fund size of over 160 billion yuan, and has gathered multiple wholly-owned or controlling management companies such as Jintou Capital, Guolian Investment, Guolian Capital, Hualiwu Private Equity, and Yicun Capital. It is a state-owned venture capital institution that integrates seed, angel, entrepreneurial, equity, and M&A funds. Focusing on strategic emerging industries such as biomedicine, integrated circuits, dual carbon energy conservation, and advanced manufacturing, the company currently manages funds to invest in over 450 enterprises with a total investment of nearly 40 billion yuan. Breaking through the old and establishing the new, reform is never a gentle breeze. The upcoming new round of reform measures highlights the strength and determination of Xi Venture Capital's reform, as all existing executives are re competing for positions. On April 26th, Xi Venture Capital's global recruitment and recruitment officially launched, aiming to attract and reserve high-level talents, attract top institutions to cooperate with local brands, and make up for another "shortcoming".

Article source: Wu Mengjia, reporter from Wuxi Daily