Innovation Works approved to list on China’s New Third Board

The publicly-listed entity does not include Innovation Works' renminbi-denominated fund management business, which generates revenue through management fees and carried interests. Rather, the primary asset is Innovation Works' incubation business, according to the latest regulatory filing.

Innovation Works filed for a listing on the NEEQ in November. The firm initially proposed to list both the fund management and incubation businesses onshore. Lee said he hope the listing would allow his firm to get more funding to support start-ups with the potential to achieve billion-dollar valuations.

But in late December, the China Securities Regulatory Commission (CSRC) shut down capital raising by PE firms on the board, leaving about 30 new applicants in the queue, including Innovation Works. Industry participants said the regulator was concerned about the overheated market and potential risks caused by the excessive valuations of PE firms listed on the board. That was also largely due to insufficient oversight of listing structures on the OTC market.

Innovation Works launched in 2009 in the US dollar space under an incubation-plus-investment model. The incubator identified companies or individuals with potential and got them started. Those deemed to have sufficient potential received early-stage backing from the Innovation Works, with other VC firms brought in as the companies gather momentum. The GP is currently looking to raise $250 million for its third fund. 

According to the filing, Innovation Works split its renminbi fund management business into an affiliated privately-held vehicle - Beijing Hulian Innovation Works Investments Management - in July. Meanwhile, Lee no longer holds any shares in the listed company.

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• Topics
• Greater China
• IPO
• Venture
• Regulation
• China
• IPO
• Innovation Works
• regulation