A Chinese scientific and technology group is preparing to invest $300 million in Israeli tech firms. KuangChi, based in Shenzhen, this week announced the new KuangChi GCI Fund & Incubator, which will seek out investments in Israeli start-ups, mid-stage, and enterprise firms, and bring them, their technology, and their products to serve a Chinese market hungry for Israeli solutions.
Founded in 2010 by five Chinese scientists who returned to China after earning advanced degrees at Duke, Oxford, and Cambridge universities, KuangChi has turned into a worldwide conglomerate with operations in China, North America, Europe, Africa and Australia. KuangChi has applied for more than 3,000 patents worldwide in the areas of metamaterials, photonics, satellite technology, aviation, and robotics in the past five years.
Among its holdings, the group is a main shareholder of KuangChi Science Limited, Solar Ship Inc., Martin Aircraft Company, biometrics pioneer Zwipe, and communications group HyalRoute. All told, KuangChi’s value exceeds $10 billion.
KuangChi is all about the science; the company holds no fewer than 88% of worldwide patents in metamaterial technology, materials that are made of metals, plastics, and other composites that are produced at very small scales, making for unique physical properties. Metamaterials are the basis for, among other things, “invisibility cloaks” that can block or absorb light waves, rendering the material (and the person wearing it) impossible to see in normal light.
Advanced tech in advanced sciences is what brings KuangChi to Israel. According to Dr. Ruopeng Liu, the group’s chairman, “Israel has unparalleled capabilities to offer the world. It shares with KuangChi a special mindset and vision. We intend to invest in the best local companies in the fields of biometrics, communications, robotics, and augmented reality, and take them to the next level commercially and technologically.”
Early-stage companies that the fund invests in will be invited to join an accelerator in China, where KuangChi will prepare them to enter and thrive in the Far East.
KuangChi is not the only large Chinese fund seeking to invest in Israeli tech. The Catalyst Everbright Fund, a joint fund managed by Israel’s Catalyst Equity Management and Hong Kong-based China Everbright, focuses on investments in agriculture, industrials/manufacturing, healthcare, water, energy, technology, media and telecommunication, among others, handpicked for their potential success in the Chinese market. The fund secured more than $100 million at its first closing in March 2014, and currently, after its third closing in January of this year, has over $200 million under management.
KuangChi’s longtime partner in Israel, Indigo Global, will represent and manage the GCI Fund incubator’s activity. According to Dorian Barak, managing partner of Indigo Global, “KuangChi is one of the most important technology companies in the world today, combining the best of the Shenzhen tech ecosystem and China’s vision for large-scale development. Dr. Liu and his team have developed a unique and successful model to partner with leading innovators in a range of fields, which affords enormous resources to the companies in which they invest.
“KuangChi isn’t merely a financial investor for their enormous technological resources, distribution networks, and design and product development capabilities to benefit the companies selected for the China-based accelerator,” said Barak. “We at Indigo are very excited to manage the platform in Israel with a view to expanding the model globally.”
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