China is a key player in global trade and investment flows. It is both a major attractor and generator of global capital and a source of the major global supply chains of today. There is hardly any global value chain that is not originating from or dependent on China.
As a result of this footprint, China faces large challenges in meeting demand for energy and water, while preventing further environmental degradation. In order to meet these challenges China aggressively seeks to obtain new technologies from Western countries.
For the coming decades it will remain the largest and most attractive market for European and US companies active in clean energy, recycling and eco processes. These self-reinforcing trends have important consequences for investors and technology entrepreneurs.
Investors from developed countries see the centre of gravity of their investment portfolios shift to China. Existing portfolio companies’ interests progressively lie in outsourcing production (and R&D), tapping domestic markets and leveraging China’s supportive policies.
New investment opportunities are increasingly located in China or find their business model increasingly impacted by China’s development. At the same, investors compete with Chinese investors on their home turf in Europe and the US (Chinese outbound investment is expected to reach $2 trillion in 2020).
For high-tech entrepreneurs shifting their focus to in China and Southeast Asia, there is an increasing need to access dedicated growth capital in order to capitalise on its improving technical capabilities and growing market. Currently, sophisticated growth capital is hard to attract in China due to the bias of investors towards pre-IPO targets. Regulatory barriers make it equally hard to attract foreign capital into China.
In addition to capital, these entrepreneurs (especially if they are foreign) need capabilities to tackle sourcing/manufacturing, local market access, hiring local management and protect intellectual property. These converging trends -of investment and technology- call for a bridge function that combines cross-border finance, technology and business development. SDS Ventures is uniquely positioned to become the leading player in this field.
SDS Ventures’ mission is to become the number 1 bridge for financial services to investors and sustainable technology companies between China and Western Europe.