Turning startups into smart brands

"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.

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