Chinese private equity fund unveils new incubator for startups in UK

Qiao Huijun, an investment partner of Angel Plus (left) and Sun Wansong, IUIA secretary general (right) are at the launch of IUIA – A+Labs in London. Photo by Cecily Liu/chinadaily.com.cn

Chinese private equity fund Angel Plus led the launch of a new incubator in London on Saturday to help technology-oriented British firms commercialize their cutting edge technology in China.

The new incubator, called IUIA – A+Labs, is provides office space, engineering technology support, manufacturing partnership and financial investment in the form of equity to UK startups mainly in the fields of smart city, Internet of Things, and financial technology.

It is located within Level39, which is Europe's largest financial technology incubator, based in London's financial center Canary Wharf.

"We want to combine UK startups' cutting edge technology with China's manufacturing strength and large market through our incubator program," said Qiao Huijun, an investment partner of Angel Plus.

"Effectively we are taking top UK technologies to China to help its structural shift to a high technology knowledge economy, and we are helping the most innovative and competitive UK firms become global leaders in their respective industries," Qiao said.

Angel Plus was founded in 2014 in Beijing by two well-known Chinese business leaders: Yu Minhong, co-founder and CEO of New Oriental Education, and Shen Xitai, a former CEO of Huatai United Securities.

The fund's scale has enjoyed rapid growth to its current size of about 5 billion yuan ($760 million) of total capital, and this figure is projected to grow to about 12 – 15 billion yuan by the end of 2016, according to Qiao.

Such scale of capital growth is partly due to Angel Plus' unique business model, which provides startups with a comprehensive package of support.

Unlike traditional incubators that only provide office facilities, and venture capitals that focus on sharing network contacts and advice on business strategy, Angel Plus has in-house engineers to help startups with research and development, and its own production facilities in both China and the US to help firms commercialize products on large scales.

Angel Plus has several core business divisions, of which A+Labs, led by Qiao, focuses specifically on investing in high technology startups. A+Labs already established six incubators in China and in January it launched an incubator in the technology hub Silicon Valley, focusing on US technology firms in the smart device field specifically.

One example of a Silicon Valley firm it invested in is a motion sensor technology company that makes tennis clothing which can match a tennis player's postures.

"They had great technology but manufacturing costs were about $300 for each sensor. Our engineers worked alongside their R&D team to take production cost right down to $15 for each sensor, which made large scale commercialization viable," Qiao said.

The Angel Plus team of engineers provide support from industrial design and mechanical design, through to hardware and software improvements, and Angel Plus' own production facility cuts down negotiation costs with third party manufacturers.

"Because our engineering support is so comprehensive, we had to really limit down the industries of firms we accept into our accelerators, as our engineers only have expertise in certain fields," Qiao says.

Apart from the US smart device industry and the UK- based smart city, financial technology and Internet of Things industries, A+Lab is expected to launch in Germany later this year focusing on high tech manufacturing.

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