Innovation Works to list on China’s New Third Board

Lee said on his Weibo microblog that the purpose of listing is to get more financing to support more potential unicorns - companies that are valued at more than $1 billion. 

Innovation Works, which launched in September 2009, operates under an incubation-plus-investment model. The incubator identifies companies or individuals with potential and gets them started. Those deemed to have sufficient potential receive early-stage backing from the Innovation Works and venture capital firms are brought in as the companies gather momentum.

The firm invests across software-enabled IT space, including mobile internet, consumer internet, e-commerce and cloud computing. It participates from the seed and Series A rounds, as well as Series B on a selective basis. Innovation Works has backed about 200 Chinese start-ups, half of which went on to raise later stage financing. More than 20 have reached a market valuation of over $100 million.

With offices in Beijing and Shanghai, the VC firm manages $500 million across two US dollar funds - Innovation Works Development Fund I and Fund II - and two renminbi funds. Its debut US dollar fund closed at $180 million in 2011.

According to a regulatory filing, Innovation Works recorded revenue of RMB27 million ($4 million) last year, up from RMB15 million in 2013. It reported a net loss of RMB760,000 and RMB6 million in 2014 and 2013, respectively. For the first half of this year, revenue came to RMB25 million while net profit reached RMB8 million.

The NEEQ was initiated in 2011 as a pilot program in Shenzhen enabling high-tech focused private small and medium-sized enterprises (SMEs) to raise capital. It expanded into cities such as Shanghai, Tianjin and Wuhan two years ago and then the securities regulator united all the OTC markets and established NEEQ.

Listing requirements are less stringent than for other bourses: companies must simply have a clear shareholding structure and two years of financial statements.

Last year, JD became the first Chinese PE firm to list on the New Third Board. It now wants to list on Shanghai's main board through a reverse merger with publicly-traded property developer Jiangxi Zhong Jiang Real Estate. The other PE firms on the New Third Board are CSC Group, Shenzhen Cowin Capital and ChinaEquity Group.

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• Topics
• Greater China
• Venture
• Technology
• Early-stage
• China
• Venture
• TMT
• Innovation Works
• Fundraising