- Province hosts first high-level venture capital conference in years as officials seek long-term funding for tech innovation.
- Government-backed funds aim to ease exit pressure and channel capital into early-stage deeptech startups.
Zhejiang province signaled a major shift toward long-term technology financing on March 24, hosting its first provincial-level venture capital conference in recent years as policymakers stepped up efforts to cultivate so-called “patient capital” to support innovation-driven growth.
The gathering in Hangzhou, named “Zhejiang High-Quality Venture Capital Development Conference,” brought together 50 investment institutions, 40 technology companies and 30 research organizations, underscoring the province’s ambition to position itself as a national center for venture investment aligned with advanced manufacturing and emerging technologies.
Provincial governor Liu Jie described venture capital as a strategic tool with long-term implications for economic competitiveness, urging global investors to deepen their presence in Zhejiang.
He also called on government-backed funds to take the lead in early-stage investments to reduce market hesitation toward riskier technology projects.
Officials said Zhejiang plans to strengthen four pillars — the intelligent economy, innovation ecosystem, investment framework and business environment — as part of a broader effort to attract long-duration capital capable of supporting startups through extended development cycles.
Hangzhou has already experimented with the model. The city’s Runmiao Fund, literally meaning “nurturing the sprouts,” was established in late 2025 with an initial size of 2 billion yuan ($290 million) and a 20-year lifespan. It focuses on providing first-round financing for early-stage technology firms less than five years old and valued below 100 million yuan.
‘Nurturing the sprouts’
Individual investments are capped at 5 million yuan, with the fund taking minority stakes and evaluating performance across the full lifecycle rather than individual deal outcomes or performances of individual portfolio companies — a structure designed to tolerate risk and encourage experimentation.
Two major agreements were signed at the conference, including a partnership between Zhejiang Innovation Investment Group and Zhejiang University to expand funding for university-linked startups, as well as Zhejiang’s participation in the Yangtze River Delta arm of a national venture capital guidance fund.
Institutions such as Zhejiang University have been a major hothouse for science and technology innovation over the past few years, contributing to the dramatic rise of a group of tech unicorns, such as the “Six Dragons of Hangzhou.”
Authorities said Zhejiang’s provincial fund cluster has surpassed 300 billion yuan in total scale, backing more than 1,800 local companies and supporting over 100 listings while attracting more than 240 venture capital institutions to the region.
A flagship social security-backed technology fund, with an initial size of 50 billion yuan and an 18-year duration, has emerged as a benchmark for patient capital.
Extending the limited lifespans
Meanwhile, the province’s “4 plus 1” industrial fund system targets next-generation information technology, high-end equipment, modern consumption and healthcare, and green petrochemicals and new materials, alongside a specialized parent fund focusing on small and medium-sized enterprises.
The push reflects structural challenges in China’s private equity market, where typical yuan-denominated funds traditionally operate on a “five-plus” cycle, characterized by five years of investment followed by two years for exit and liquidation.
This model creates pressure to deliver returns within relatively short timeframes. For deep-tech startups that require longer development cycles and sustained capital support, such timelines can force premature exits, highlighting the need for longer-duration funding models now being promoted by Zhejiang.
At the conference, 50 investment institutions jointly issued an initiative pledging to make early-stage, small-scale and long-term investments in technology ventures while tolerating higher experimentation risks.
Zhejiang Innovation Investment Group said the province aims to expand its industrial fund network to more than 500 billion yuan by 2030, with the goal of mobilizing over 1 trillion yuan in broader investment.
