Our Response | Zhejiang Venture Capital’s Retrospective on the 14th Five-Year Plan: Unleashing Innovation and Science Vitality, and Serving as a New-Generation Engine

Standing at the forefront of innovation and opening up new horizons for development, during the 14th Five-Year Plan period, Zhejiang Venture Capital is accelerating the construction of a “high-level science and technology innovation investment platform.” We are focusing our efforts on the main tracks of emerging and future industries, deeply cultivating the “3+3” core sectors, and striving to implement cutting-edge strategic planning, chain-based integration, and value multiplication. As a result, we’re demonstrating a high-quality development trajectory marked by rapid capability enhancement, stable profitability, strong investment intensity, and stringent risk management—positioning ourselves as a powerful engine driving the growth and strengthening of our province’s new-quality productive forces.

 

1. Closely align with strategic guidance and build a high-level venture capital platform.

Under the strategic guidance of Zhejiang Capital’s “Two Platforms, Two-Tier Networks, and One Think Tank” initiative, Zhejiang Venture Capital has successfully completed its management upgrade and equity optimization adjustments. It has also made breakthroughs and explorations in areas such as capital investment, business empowerment, and mechanism support, thereby establishing a long-term, stable development model centered on “industrial chains + incubation + capital.” The company is steadily moving toward becoming a leading science and technology innovation platform that leverages large-scale social capital and drives emerging industries. Over the past five years, the company’s registered capital has grown from 100 million to 1.2 billion yuan, significantly enhancing its financial strength; annual investment volume has increased by approximately four times, dramatically boosting its investment capacity; and the success rate of IPOs for projects invested in for more than three years has reached 38.1%. Overall, the company leads the industry in both profitability and nurturing capabilities, demonstrating strong strategic support and high operational efficiency.

 

 

For seven consecutive years, the company has been recognized as an “Outstanding Venture Capital Institution in Zhejiang,” and has also received honors such as “Top 10 Venture Capital Firms in Zhejiang Province,” “Best Venture Capital Institution in the Yangtze River Delta Region,” “Most Promising Investment Institution in China’s New Energy Sector,” and “Best Investment Institution in China’s Advanced Manufacturing Sector.” The company has thus forged a distinctive development path for state-owned venture capital institutions.

 

 

 

II. Serving technological innovation and building a highland for chain-based venture capital.

Deeply cultivate emerging strategic sectors and strengthen core capabilities.

Focusing on six major investment sectors—new materials, high-end equipment manufacturing, next-generation information technology, biopharmaceuticals, AI+, and cutting-edge technologies—during the 14th Five-Year Plan period, projects within the province account for approximately 75% of total investments. We have successfully nurtured and brought 10 companies to public listing, five of which are either based in or have established operations within the province. Specifically in the field of humanoid robots, we have joined forces with Zhongkong Technology downstream to promote the establishment of the Zhejiang Humanoid Robot Innovation Center, thereby driving breakthroughs in core technologies related to embodied intelligence and motion control. Upstream, we have invested in Xinjian Transmission, facilitating the implementation of a project in Lin’an to industrialize planetary roller screw drives with an annual production capacity of 1 million units. This project has been designated as a key provincial industrial initiative, helping Zhejiang take the lead in building its future-oriented industries.

 

 

Empower industrial upgrading and deepen chain-based deployment.

Adopt an integrated approach of research and investment, establishing a deep, chain-like investment layout in core growth sectors. In the new materials sector, we have invested in nearly 30 companies, systematically building a new materials industry cluster that has evolved from isolated points to interconnected networks, successfully nurturing a number of listed companies such as Global New Materials International and Zhongxin Shares. Focusing on the automotive industry chain, our investments cover key segments including auto parts, equipment manufacturing and testing, and electronic control systems. In the integrated circuit sector, we have constructed a multi-dimensional investment matrix spanning chip design, packaging and testing, critical materials, and core equipment. Among these, HuaHai Qingke has grown into an industry leader and successfully gone public, achieving both industrial empowerment and outstanding investment returns.

 

 

Expand the sci-tech innovation landscape and build a collaborative ecosystem.

We have clearly defined a development path that is rooted in Zhejiang and radiates nationwide. We have established an office in the Guangdong-Hong Kong-Macao Greater Bay Area and are deeply integrating into regional development initiatives such as the Beijing-Tianjin-Hebei region and the Yangtze River Delta. We are systematically consolidating provincial-level science and technology resources, fostering collaboration among provincial enterprises, universities, research institutes, financial capital, and listed companies to create a synergistic ecosystem involving government, industry, academia, research, and finance. We have already established close partnerships with institutions such as Zhejiang University and Zhijiang Laboratory, where we are incubating cutting-edge science and technology projects. Additionally, we are collaborating with cities including Huzhou, Jiaxing, and Jinhua to build a regional collaborative innovation network, promoting coordinated efforts across provincial, municipal, and county levels, cross-regional cooperation, and multi-level platform-building initiatives.

 

3. Aggregate fund clusters to form a capital empowerment matrix.

Build a ten-billion-dollar cluster and leverage capital to drive empowerment.

Leveraging the distinctive features of regional economic development and differences in resource endowments, we are establishing a collaborative network that connects most of the cities within the province, mobilizing social capital to create a fund matrix characterized by “phased stratification, regional differentiation, and functional categorization,” thereby strengthening support for innovation at the source. During the 14th Five-Year Plan period, we have successively initiated and established funds such as the Early-Stage Small & Hard Technology Fund, the Talent Fund, a series of Science and Technology Innovation Funds, and a series of Funds for Emerging Strategic Industries, effectively attracting more social capital to support industrial technological innovation. As of now, the total assets under management by the company exceed 10 billion yuan, providing robust support for the precise deployment of original and leading-edge technologies.

 

 

Link to source resources and nurture innovative entities.

Focusing on tackling “bottleneck” technologies and fostering original innovation, we are cultivating technology-leading enterprises and unicorn projects, and proactively laying out plans for disruptive technologies. To this end, we have established the “Zhejiang University Technology Transfer Fund,” which serves as a vital link to connect university-based innovation resources and empower the development of innovation hubs such as Zhejiang University’s Qizhen Innovation Concept Verification Center. We are deeply supporting and nurturing innovative (leading) enterprises: among the projects under our management, there are 32 national-level specialized, sophisticated, and new “Little Giants,” 6 “Hidden Champions,” and 15 national-level technology-based SMEs. This approach effectively leverages the role of state-owned venture capital as a “connector, accelerator, and amplifier.”

 

 

Adopt an “early, small, and strong” approach and set a clear direction.

As the first provincial state-owned enterprise to launch a special 200-million-yuan “early-stage, small-scale, high-impact” investment fund, we have integrated this fund with other initiatives such as the Strategic Emerging Industries Fund, the Technology Transfer and Transformation Fund, and the Talent Fund. Adopting a “small steps, fast pace” strategy, we are strategically positioning ourselves in early-stage projects and providing financial support to innovative, high-potential startups. We have established a systematic and comprehensive fund management mechanism, innovating and exploring new approaches in areas such as fund review and decision-making, dynamic performance evaluation, and equity incentive schemes, thereby creating the “Zhejiang Venture Capital Experience” in early-stage fund management. During the 14th Five-Year Plan period, nearly 60% of the company’s investments have been directed toward early- and mid-stage projects, enabling us to thoroughly accumulate experience and methodologies for “investing early” and “investing small” in the technology sector. As a result, we have become a “trailblazer” among provincial state-owned investment institutions in pursuing “early-stage, small-scale, high-impact” investments.

 

Four: Mechanism innovation and transformation to unleash the vitality of state-owned venture capital.

Establish a scientific and standardized compliance and risk control system.

Implement full-chain management of investments and establish a four-level review process comprising “departments—companies—joint reviews—decision-making.” Risk-control checkpoints are extended to the front end of projects, with the Investment Department and the Risk-Control Department conducting “parallel due diligence along two parallel tracks.” This strengthens the “three-line defense” consisting of auditing, inspection, and disciplinary oversight, ensuring that investment operations are conducted in a standardized and stable manner.

Improve the talent mechanism to attract and gather “the first resource.”

Deepen the reform of the three major systems, rigorously implement the tenure system and contractual management for managerial teams, and carry out performance evaluations for all employees. Build a comprehensive management system covering the entire “selection, development, utilization, and retention” chain. Select and recruit a team of leading professional managers, and proactively attract high-level, multidisciplinary talents tailored to specific industry tracks. For emerging and future industries, establish specialized investment teams, regularly organize project discussions, industry research sharing sessions, and expert reviews, and strengthen industry monitoring and analysis.

Deepen the flexible and efficient market-oriented operating mechanism.

Adhere to market-oriented operations under the backdrop of state-owned capital, and consistently pursue independent project acquisition and independent analysis and decision-making. Establish a mechanism for shared risk and shared benefits, as well as a mandatory co-investment mechanism, and build a long-term incentive and constraint system oriented toward performance. Link employee rewards to operational results and align executive performance-based incentives with long-term goals, thereby unleashing employees’ enthusiasm and vitality for innovation and entrepreneurship.

Looking ahead to the 15th Five-Year Plan, Zhejiang Venture Capital will firmly grasp its role as a state-owned venture capital platform, and strive to build a provincial science and technology innovation investment platform that is “leading within the province and first-class nationwide.” With a higher-level perspective and greater sense of responsibility, we will serve the construction of China’s national strategic scientific and technological forces and boldly take on the role of the core engine for fostering new-quality productivity.

 

 

Source | Zhejiang Venture Capital