New $15m fund launched for Australian startups wanting to expand to China

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A new $15 million fund for Australian startups wanting to expand to China, known as the Dragon Egg Fund, has been launched.

The fund will focus on investing in tech startups across five sectors: health, cleantech, logistics, education and agriculture. The fund, founded by Mai Capital, is focusing on investing in these areas as it believes they will be most successful in China.

“We will look to invest in emerging companies that are positioned to tap into the enormous Chinese market. This offers investors the chance to invest in high growth innovative companies and provides these companies with a fast track to the world’s most populous country,” said founder of Mai Capital, Michael Mai in an article in the Australian Financial Review.

“We want to do a lot more business between Australia and China to further the two countries’ economic benefits. We see them as the perfect joint venture,” he said. “In Australia there are too little people and a lot of resources, China has too many people, too few resources and too much competition.”

The fund is focused on “post-seed” or “Pre-A” investment opportunities in early stage startups.

About the investment firm

Mai Capital are aiming to bridge the gap between Australia, a country with an abundance of resources and startups with global visions, and China, a country where resources are limited and business focus is often narrow.

“Chinese startups are too narrow, they’re solving a problem that’s only domestic and they don’t have a global strategy,” said Mr Mai in the Australian Financial Review article.

“But in Australia, they’re too broad and they want to do everything. They have a global focus, but we want them to think about the Asian market as well.”

Mr Mai is also the managing director at ICD property, an Australian property development business founded in 2009. ICD property is currently responsible for managing $1.3 billion in assets.

Australian companies in China

There are very few Australian startups that are currently focusing on the potentially lucrative Chinese market.

Recently, a number of Australian startups competed on the Chinese reality TV show The Next Unicorn, but it is unclear whether these companies will attempt to ambitiously break into one of the world’s biggest markets.

There is some evidence to suggest that Australian companies can be extremely successful in China. Companies like A2 Milk and Blackmores, who took advantage of the ‘China Boom’ to more than double their interim profit, are proving that the Chinese market is not impenetrable for Australian companies.

Evidently, the desire for Australian resources in China remains high. How these startups fare in a market that is extremely foreign to most Australians will be something to watch.