Turning startups into smart brands
Chinese firms are setting up foreign 'incubators' for some of the most innovative fledgling businesses.
Electric skates and smart scooters will eventually drive international growth for ACTON Inc, a high-tech startup run by American-Chinese entrepreneurs in Silicon Valley.
Based in California's "hot spot" of innovation, Mountain View, the company has tapped into the expertise of Techcode SME Service Co Ltd, a Chinese firm specializing in helping fledgling businesses take off.
"Techcode has made it easier for us to reach potential partners in China," Janelle Wang, co-founder and CEO of ACTON, said.
ACTON has only been going for two years, but its speed skates and motorized M-scoo-ters have proved popular though the company has yet to release detailed figures.
With a staff of more than 30, the startup has made inroads in the United States and is now looking to expand through its connections with Techcode, particularly in China.
In September, ACTON moved into Techcode's Mountain View "incubator" building before senior executives popped over to Beijing a month later for a three-day trip to meet potential partners.
The US firm also decided to switch its office in China to Techcode's building in Shanghai, although production of its motorized models will stay in the country's eastern Zhejiang province.
"Techcode's international expertise reduces the problems of finding offices in different countries and helps us make better use of local resources," Wang said. "It will help us expand into China."
As the innovation tide sweeps across the nation, a growing number of businesses here are looking to establish offices overseas to set up "incubators" and "accelerators".
Many are joint ventures while others help foreign startups break into the Chinese market.
Techcode is one such company and has branched out into the US and South Korea. The firm is also looking to open up offices in Germany and Israel by the end of this year.
Based in Beijing, Techcode helps startups by acting as a mentor and providing services as well as rent-friendly offices known as "incubators", which contain other fledgling innovative companies.
The Chinese group has six "incubators" here, in South Korea and the US, including one in Mountain View, which is home to major global online players such as Google Inc, Mozilla Foundation and Symantec.
"The world is becoming a global entrepreneurial playing field," Huang Haiyan, CEO at Techcode, said. "China, with a large, increasingly Internet-connected population, should join this conversation of Web startups."
Huang founded Techcode in 2014 after working as the general manager of ZJ Incubator for seven years.
During her time at ZJ, she helped nurture more than 600 startups at the ZJ Innopark, a national high-tech industrial complex in Shanghai.
Her firm is now "incubating" about 30 projects in Silicon Valley, including ACTON, although she declined to go into further details.
"By building a global network of incubators, we will enable budding businesses to take advantage of each country's unique characteristics and enjoy the flow of talent and capital," Huang said.
To illustrate her point, she cited Darma, which was set up by Singaporean entrepreneurs and manufactures smart seat cushions packed with hidden sensors.
They can detect your breathing patterns and stress levels, measure your heart rate, and assess your sitting posture.
"The market for smart cushions in the workplace is big," Junhao Hu, CEO and founder of Darma, told media platform Tech in Asia.
Last year, Darma moved into Techcode's Shenzhen "incubator" to tap into the city's manufacturing prowess and build its presence in China.
Later, it switched part of its team to Techcode's office in Silicon Valley to expand its operation in the US.
"To maximize the role of a network of incubators, we will set up more than 40 startup accelerators in 10 countries by the end of 2018," Huang added, without going into details.
"Accelerators" are for more mature startups that are looking for new funding as they grow globally.
Techcode has a history of investing in companies or finding funding from angel investors and venture capital firms. But other Chinese businesses are just as active in rolling out services for startups.
Tsinghua Holdings Ltd, a technology conglomerate backed by Tsinghua University, has been running incubators and high-tech industrial parks in China for two decades.
In 2012, Tsinghua put together a partnership deal with InnoSpring (Shanghai) Co Ltd to establish InnoSpring (SV), Silicon Valley's first US-China tech "incubator".
So far, more than 150 companies involved in the project have found funding, while two thirds of them were launched by non-Chinese entrepreneurs.
"Silicon Valley is never short of money," Liu Wanfeng, president of InnoSpring (Shanghai), which runs the day-to-day operation in Silicon Valley, said. "But foreign startups choose Chinese incubators because we can help them access one of the world's largest markets. Without us, this would prove quite difficult."
InnoSpring (SV) works with US startups to come up with the most effective business model for the Chinese market through its Gateway Program.
The company also helps Chinese startups tap into US talent and establish business contacts in the world's biggest economy.
Naturally, Tsinghua is planning to expand its global operation after investing in the Silicon Valley project.
"We hope to set up incubators in more than 20 countries within next five years, through either acquisition or partnership," Xu Jinghong, president of Tsinghua Holdings Ltd, said, without disclosing further information. "This is a key part of our efforts to become an international enterprise."
But to do that the company faces challenges in a highly competitive field and will have to beef up its investment in startups. That is already starting to happen.
In 2013, InnoSpring (SV) shifted its strategy from expanding office space for "incubators" to increasing direct funding into startups.
Up to $8 million has been invested since then in 40 fledgling firms in the Silicon Valley operation, with a combined market value of $1.6 billion.
There has also been a major success story for the joint venture in TrustGo.
The mobile antivirus app was pioneered at the Silicon Valley office before being bought by Chinese search engine giant Baidu Inc for more than $30 million.
Last year, InnoSpring (SV) was named as one of the leading 24 "incubators" in Silicon Valley.
But this recognition of Chinese companies does not surprise Huang, CEO of Techcode.
"Overseas markets are the ideal places for competitive Chinese incubators to thrive," she said. "But you still have to establish yourself as a trustworthy service provider and offer long-term value.
"In the end, if China wants to play a role in driving global innovation, we must first have world-level innovators," she added.
Based in California's "hot spot" of innovation, Mountain View, the company has tapped into the expertise of Techcode SME Service Co Ltd, a Chinese firm specializing in helping fledgling businesses take off.
"Techcode has made it easier for us to reach potential partners in China," Janelle Wang, co-founder and CEO of ACTON, said.
ACTON has only been going for two years, but its speed skates and motorized M-scoo-ters have proved popular though the company has yet to release detailed figures.
With a staff of more than 30, the startup has made inroads in the United States and is now looking to expand through its connections with Techcode, particularly in China.
In September, ACTON moved into Techcode's Mountain View "incubator" building before senior executives popped over to Beijing a month later for a three-day trip to meet potential partners.
The US firm also decided to switch its office in China to Techcode's building in Shanghai, although production of its motorized models will stay in the country's eastern Zhejiang province.
"Techcode's international expertise reduces the problems of finding offices in different countries and helps us make better use of local resources," Wang said. "It will help us expand into China."
As the innovation tide sweeps across the nation, a growing number of businesses here are looking to establish offices overseas to set up "incubators" and "accelerators".
Many are joint ventures while others help foreign startups break into the Chinese market.
Techcode is one such company and has branched out into the US and South Korea. The firm is also looking to open up offices in Germany and Israel by the end of this year.
Based in Beijing, Techcode helps startups by acting as a mentor and providing services as well as rent-friendly offices known as "incubators", which contain other fledgling innovative companies.
The Chinese group has six "incubators" here, in South Korea and the US, including one in Mountain View, which is home to major global online players such as Google Inc, Mozilla Foundation and Symantec.
"The world is becoming a global entrepreneurial playing field," Huang Haiyan, CEO at Techcode, said. "China, with a large, increasingly Internet-connected population, should join this conversation of Web startups."
Huang founded Techcode in 2014 after working as the general manager of ZJ Incubator for seven years.
During her time at ZJ, she helped nurture more than 600 startups at the ZJ Innopark, a national high-tech industrial complex in Shanghai.
Her firm is now "incubating" about 30 projects in Silicon Valley, including ACTON, although she declined to go into further details.
"By building a global network of incubators, we will enable budding businesses to take advantage of each country's unique characteristics and enjoy the flow of talent and capital," Huang said.
To illustrate her point, she cited Darma, which was set up by Singaporean entrepreneurs and manufactures smart seat cushions packed with hidden sensors.
They can detect your breathing patterns and stress levels, measure your heart rate, and assess your sitting posture.
"The market for smart cushions in the workplace is big," Junhao Hu, CEO and founder of Darma, told media platform Tech in Asia.
Last year, Darma moved into Techcode's Shenzhen "incubator" to tap into the city's manufacturing prowess and build its presence in China.
Later, it switched part of its team to Techcode's office in Silicon Valley to expand its operation in the US.
"To maximize the role of a network of incubators, we will set up more than 40 startup accelerators in 10 countries by the end of 2018," Huang added, without going into details.
"Accelerators" are for more mature startups that are looking for new funding as they grow globally.
Techcode has a history of investing in companies or finding funding from angel investors and venture capital firms. But other Chinese businesses are just as active in rolling out services for startups.
Tsinghua Holdings Ltd, a technology conglomerate backed by Tsinghua University, has been running incubators and high-tech industrial parks in China for two decades.
In 2012, Tsinghua put together a partnership deal with InnoSpring (Shanghai) Co Ltd to establish InnoSpring (SV), Silicon Valley's first US-China tech "incubator".
So far, more than 150 companies involved in the project have found funding, while two thirds of them were launched by non-Chinese entrepreneurs.
"Silicon Valley is never short of money," Liu Wanfeng, president of InnoSpring (Shanghai), which runs the day-to-day operation in Silicon Valley, said. "But foreign startups choose Chinese incubators because we can help them access one of the world's largest markets. Without us, this would prove quite difficult."
InnoSpring (SV) works with US startups to come up with the most effective business model for the Chinese market through its Gateway Program.
The company also helps Chinese startups tap into US talent and establish business contacts in the world's biggest economy.
Naturally, Tsinghua is planning to expand its global operation after investing in the Silicon Valley project.
"We hope to set up incubators in more than 20 countries within next five years, through either acquisition or partnership," Xu Jinghong, president of Tsinghua Holdings Ltd, said, without disclosing further information. "This is a key part of our efforts to become an international enterprise."
But to do that the company faces challenges in a highly competitive field and will have to beef up its investment in startups. That is already starting to happen.
In 2013, InnoSpring (SV) shifted its strategy from expanding office space for "incubators" to increasing direct funding into startups.
Up to $8 million has been invested since then in 40 fledgling firms in the Silicon Valley operation, with a combined market value of $1.6 billion.
There has also been a major success story for the joint venture in TrustGo.
The mobile antivirus app was pioneered at the Silicon Valley office before being bought by Chinese search engine giant Baidu Inc for more than $30 million.
Last year, InnoSpring (SV) was named as one of the leading 24 "incubators" in Silicon Valley.
But this recognition of Chinese companies does not surprise Huang, CEO of Techcode.
"Overseas markets are the ideal places for competitive Chinese incubators to thrive," she said. "But you still have to establish yourself as a trustworthy service provider and offer long-term value.
"In the end, if China wants to play a role in driving global innovation, we must first have world-level innovators," she added.
