China’s government-backed venture funds raised about 1.5 trillion yuan (US$231 billion) last year, tripling the amount under management in a single year to 2.2 trillion yuan, Bloomberg reported, citing data from consultancy firm Zero2IPO Group.
It marks the biggest pot of money for start-ups in the world and almost five times the sum raised by other venture firms last year globally, according to the report.
The money is part of Premier Li Keqiang’s effort to bolster the slowing economy through innovation and reducing its dependence on heavy industry.
China began in 2014 a campaign to support entrepreneurship, and has since opened 1,600 high-tech incubators for start-ups.
The huge influx of cash raises the possibility of a boom-and-bust cycle like what happened in China’s solar and wind power sectors, Gary Rieschel, founder of Qiming Venture Partners, was quoted as saying.
It’s unclear how quickly the funds will be deployed.
The cash is meant to “overcome the failure of pure market-oriented allocation of venture capital,” by steering investment into seed and early stages, according to Zero2IPO.
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