TBED Around the World: Governments Launch Startup Investment Funds to Spur Innovation, Prosperity

In the last month, several international countries and Hong Kong have made significant monetary contributions to establish investment funds that will make strategic investments in their country’s startups. These investment funds have a two-fold focus. First, they want to help provide early stage capital to companies that have the potential to spur economic prosperity within their borders. Second, they want to help make their companies more appealing to foreign investors.

Hong Kong
In January, Hong Kong’ s chief executive Leung Chun-ying announced the launch of a new $2 billion HKD (256.9 million USD) innovation and technology venture fund during a policy address. The fund will focus on making strategic investments to grow Hong Kong-based startup ventures with the intent of increasing funding from private venture funds through a matching process.

In addition to the new investment fund, the city will commit an additional $2 billion HDK to boost university scientific research. The funding is intended to support the commericlization of university technologies by earmarking funds to Hong Kong’s Innovation and Technology Bureau for universities to carry out applied research projects. Leung also announced $500 million HKD (64.3 million USD) to create an Innovation and Technology Fund for Better Living to finance projects that use technology to improve the daily lives of Hong Kongese.

India
Indian Prime Minister Narendra Modi announced several new initiatives to support the country’s startups including 100 billion rupee (1.5 billion USD) fund. The country also will offer several new tax breaks for both the companies and their investors according to Fortune as well as pledged to ease regulations for entrepreneurs.

The Indian Ministry also recently outlined several initiatives to support the country’s manufacturing and capital goods industries. The country will establish a national startup center for the capital goods industry as well as a technology development fund for the sector. The startup center will provide pre-incubation, incubation and post-incubation services to startups.

New Zealand
In partnership with the government of Taiwan, New Zealand announced the launch of the $30 million NZD (19.9 million USD) Global from Day One (GD1) Fund II to make series A investments in New Zealand-based startups with a focus on international markets. The New Zealand Venture Investment Fund and Taiwan’s National Development Fund will each provide $11 million NZD (7.3 million USD) to kickstart the fund – both are government-supported investment organizations. In return for Taiwan’s $11 million NZD investment, a portion of the funding will be awarded to New Zealand startups that intend to use Taiwan as a springboard into Asian markets. The additional $8 million NZD (5.3 million USD) will be raised by partnerships with private investors in New Zealand, Taiwan, Singapore, Hong Kong, and the United States.

The Day One (GD1) Fund II replaces New Zealand’s GD1 Fund I – a $5 million NZD (3.3 million USD) pre-seed and seed stage fund that made 14 investments into startups. The new fund plans to make investments of between $250,000 and $1.5 million NZD (166,000 to 1 million USD)  in about 20 companies over the next four years. The goal of the initiative is to help client companies achieve a series B round of investment from private investors around the world.