- Zhejiang’s new initiative aims to foster innovation through long-term capital investment.
- Key players in venture capital and technology pledge to support early-stage, deeptech startups.
Zhejiang province is taking significant steps to establish itself as a hub for patient capital, as 50 institutions yesterday joined forces to launch a new initiative aimed at fostering long-term innovation.
Key players, including Zhejiang Provincial Innovation Investment Group, IDG Capital, Puhua Capital, Zheshang Bank, Leapmotor, and Zhejiang Lab, signed the “Patient Capital Co-Construction of Zhejiang’s Innovation Ecosystem” declaration at the Zhejiang High-Quality Venture Capital Development Conference in Hangzhou.
The initiative, which marks a pivotal moment for Zhejiang’s tech investment landscape, focuses on driving growth in deeptech sectors such as AI, advanced manufacturing, and life sciences through a bigger push in venture capital configuration and allocation.
By emphasizing long-term, “patient” investments, the initiative aims to support high-tech startups through every stage of their development — from initial research to full-scale industrialization.
Patient capital is being increasingly recognized as a solution to bridge the funding gaps faced by startups in China, particularly those in capital-intensive, high-risk sectors like AI and advanced manufacturing. Zhejiang’s embrace of this model reflects a broader commitment to creating a sustainable innovation ecosystem.
Several industry veterans shared their perspectives on the importance of patient capital at the signing ceremony.
“We are willing to take the lead with the perseverance of ‘ten years to sharpen a sword,’ sharing risks and growth with our partners, and offering long-term support to help more ‘small tech startups’ grow into ‘tall trees,’”said Guo Yihong, Managing Partner of IDG Capital, a signatory to the declaration.
A marathon, not a sprint
Hangzhou-based venture firm Puhua Capital has been an early practitioner in patient capital. “Investing in deeptech is a marathon, not a sprint,” said Cao Guoxiong, Chairman of Puhua. “AI, advanced manufacturing, and life sciences are high-risk fields that require steady, long-term support.”
With more than 30 billion yuan ($4.35 billion) worth of assets under management, Puhua is one of the largest venture capital institutions in Zhejiang. To date, it has already invested in nearly 300 Zhejiang-based projects, with 78% of those investments focused on early-stage ventures.
The initiative also highlighted the role that Zhejiang’s Social Security Sci-Tech Innovation Fund has played in indirectly backing local tech firms, by contributing to managers like Puhua and Legend Capital who pool the funds and select the investment targets.
Legend’s President Li Jiaqing praised the province’s dedicated fund for its focus on industrial investments and its commitment to the market-based operation of venture capital.
As one of the fund’s first institutional partners, Legend Capital has worked with Hangzhou to advance the launch of its latest comprehensive growth fund. It has already invested over 50 companies in Zhejiang, totaling over 5 billion yuan in funding.
Beneficiaries of Zhejiang’s commitment to “patient capital” have also spoken highly of this initiative, with deeptech startups hailing its role in offering “long-term trust and companionship.”
According to Tian Yaosi, Party chief and vice chairman of Landspace, a leader in China’s commercial aerospace industry, the Zhejiang government’s investment in 2021 helped establish the firm’s aerospace center in Jiaxing, a Zhejiang city adjacent to Shanghai.
Three years later, it also assisted the startup in securing 900 billion yuan worth of financing from the National Manufacturing Transformation and Upgrade Fund.
Acknowledging the support Landspace has been receiving from Zhejiang, Tian said it “enabled us to concentrate our efforts and achieve technological breakthroughs bit by bit through trial and error.”
“We believe that a world-class innovation ecosystem requires the active participation of both the government and the market,” one attendee said, speaking on condition of anonymity. “Venture capital is at the heart of modern innovation systems, and this initiative marks a critical step in strengthening Zhejiang’s position as a leader in China’s venture capital landscape.”
