£44m UK-China fund ready to invest
A new £44 million UK-China venture capital fund started and steered from Cambridge by entrepreneur Dr Simon Haworth is ready to start investing.
Dr Haworth emphasised the key role The Sino-UK fund could play in promoting two-way BioMedTech ventures when he met Chinese Premier Li Keqiang at a symposium in Beijing. The Sino-UK Fund is a small, closed-ended VC fund being set up by Dr Haworth with Chinese capital. The RMB 400m venture (approx. £44m) has support from government funds in Wuhan, Hubei Province, providing 30 per cent of capital, and from strategic investors in Wuhan, Chengdu, Shanghai and other Chinese centres.
To date the fund has secured support for just over 80 per cent of the total capital required so can start investing. The fund is regulated in Shanghai and focuses on UK and China biotech and medtech technologies to optimise their access to the fast-growing Chinese market. Dr Haworth wants to engage with UK companies in these sectors keen to take advantage of the massive opportunity that China presents.
Dr Haworth was invited by the Chinese Ministry of Science & Technology to join 12 fellow foreign experts at the Beijing symposium, held at the Great Hall of the People in Tian ‘an men Square.
Dr Haworth presented the Premier with a copy of Cambridge Notes – a book describing his family’s long engagement with China over six continuous generations and spanning 145 years from 1875 to date.
He took the opportunity to stress to the Premier the opportunities presented by the new fund Dr Haworth is establishing to bring UK technologies to the China market. The Symposium was followed by a dinner with Premier Li, celebrating the start of the Chinese New Year period.
Dr Haworth said: “I updated Premier Li on progress with our fund – a topic we discussed at our first meeting in 2017 – and introduced Cambridge Notes and the details of our family history.
“I explained that Cambridge Notes shows firstly that engagement between China and the UK is nothing new and, more importantly, that cross-cultural engagement is driven more by human connections and relationships than by motives related to wealth, technology or government objectives.
“If we want to increase engagement to and from China then we need first to tackle the emotional barriers that cloud our judgement.”
Dr Haworth believes it is time for China to take the global trade lead from the US. He explains: “I believe it is China’s turn to grasp the baton of international leadership, wrestling that title away from the United States.
“Such a thought is uncomfortable to many but I believe that we should think constructively about how best to engage with a new, stronger China to best effect for Britain and that we should be proactive about achieving our own objectives.
“We British were not timid when it came to growing the British Empire and we should not be surprised if China is aggressive now. What we must not do is hold back.”
Dr Haworth realises the challenges of helping to promote a new order and the new fund is geared up to hand-hold UK businesses that join the effort. He said: “China represents the greatest challenge of my career but it also provides the greatest stimulation and fun that I have every experienced. I can’t imagine a better combination for my job than that.
“Lessons learned during my own period of investigation in China include the fact that who you know really matters in this market. We are taking four more delegations of UK companies to Wuhan this year, covering all costs once in China, and sharing our networks with attendees.
“We will curate the visits and pre-arrange meetings with relevant Chinese parties to suit the needs of each company and the UK attendees will just have to pay the cost of their return flight from Heathrow direct to Wuhan.
We do get rewarded for bringing delegations to China but our main purpose is driven by the fact that our capital is based in China, for China-based application. In other words, we can’t easily bring the investment capital to the UK but instead apply it to development of products and access to market in China.
“We invite any Cambridge company interested in China development to join one of our upcoming visits.”
Since coming to Cambridge in the late 1980s, Dr Haworth has founded a series of service and technology companies – including IPSO Ventures, listed on AIM in 2007. He left IPSO in 2010 in order to investigate international markets and sources of capital and in 2012 began engaging with China.
His first engagement with China has been a success: Artificial Intelligence company Intelligent OMICS is developing diagnostic devices in Wuhan as well as an AI platform for drug discovery in the UK – but it has not all been easy.
He in-licensed pre-IND drug products from a Cambridge biotechnology company in 2012 and sought to develop the products in China with the help of a Chinese CRO.
Whilst the UK company was able to establish a subsidiary in China and raise non-dilutive funding for the product development work, the CRO proved to be unable to undertake the necessary work.
“It soon became evident that remote management of a challenging drug development project was beyond my capabilities at that time,” reflects Dr Haworth. “I ended up losing the in-licensed products and shutting the company.
“Many lessons were learned from this painful experience – particularly about what is required to manage remotely – as well as the basic knowledge required to set up a company in China, set up a bank account, raise grant funding and so on. It was a tough way to learn a lot, but the personal experience is invaluable now.
“The Chinese market is vast. China is at last investing in research not just products. IP is now protected. Capital and licensing returns can be brought back to the UK so what are you waiting for? Surely it is time for Cambridge companies to lead the way.”
• To get involved in this exciting trade push, email Dr Haworth as follows: simon.haworth [at] dynastybio.com