Merck KGaA Backs Startups in China
German pharmaceuticals, chemicals and life science group Merck has launched a €13 million seed fund to support start-ups in China.
At the opening of its Innovation Hub Shanghai, Merck simultaneously announced plans to inaugurate a second innovation hub in Guangzhou, China, next month to support China’s Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area in southern China.
Plans for the hub at Guangdong were announced in late 2018. The plan released by the local government this year states that it will promote innovation in new materials, life science, healthcare and beyond.
Merck said both hubs will target early innovations generated within the Chinese innovation ecosystem that have a connection to its Healthcare, Life Science, Performance Materials or new business segments.
Speaking at the opening ceremony in Shanghai, CEO Stefan Oschmann said the seed fund underlines Merck’s commitment to invest in the Chinese market. In cooperation with local partners, he said the innovation hubs will aim to jointly advance innovation “in China, for China and beyond.”
Plans call for the €300 million corporate strategic venture arm M Ventures to invest in Chinese seed-stage companies with individual investments ranging from €500,000 to €1 million, to help them reach the next value inflection point within 18-24 months.
Both of the Chinese hubs are located in areas of high early-venture activity. The seed investment will be managed by M Ventures and Merck China innovation hub jointly.
From the Shanghai location in the city’s New Bund World Trade Center, the German group will invite startups, academic institutions and other industry players to partner on joint innovation projects.
Since its instigation in February 2018, Merck said the Shanghai hub has been building partnerships, not only in its three innovation fields but also in AI-enabled health solutions.
To date, the group said six startups from China and other Asian countries have successfully taken part in the first phase of the Merck Accelerator in China, which helps young Chinese companies to connect with global innovation networks.