US tech startups look to China for funding, success
Updated: 2015-12-20 08:47
WASHINGTON -- SnapData, which is specialized in designing and building sensors and analytics dashboards, has been the hottest startup in the Washington D.C. area these days.
Earlier this month, SnapData, based in Herndon, the US state of Virginia, won the top prize at the Dongsheng Global Entrepreneurship Competition held in Arlington, Va., to scoop a cash prize of 15,000 US dollars and office space in the Dongsheng accelerator along with a flight to meet a group of China's top venture capitalists in Beijing's Zhongguancun, China's Silicon Valley.
The yearly competition, designed to help find high potential, early-stage, foreign tech companies that want to get involved with China's growing startup ecosystem, is backed by Chinese venture capitalist firm and investment consultancy Dao Ventures and the Dongsheng Science and Technology Park, a unit of Zhongguancun Science Park, as well as Arlington Economic Development.
Representatives from SnapData and two other startups that won second and third prizes at the competition would go to Dongsheng Science and Technology Park, where they will compete against other finalists from around the world for a grand prize of 160,000 dollars in funding for their business development, according to organizers.
The management of SnapData has a high expectation for the upcoming competition in China to find capital and a place to make its products scalable.
"We've been operating in stealth mode for months and months. Now we'll hopefully get out there and meet some great Venture Capitalists in China," said Jim Bland, chief executive of SnapData.
"We are looking to go to China because of economy of scale ... we see that's our path to success," said Shelley Grandy, chief operating officer of SnapData.
The United States has seen Chinese investments grow at an average annual rate of 41 percent from 2009 to 2013, the highest among the countries that are investing in the United States, according to the data of US Commerce Department.
A report by Rhodium Group, a US research firm, also shows that Chinese companies completed more than 9 billion dollars of foreign direct investment in the United States in the first three quarters of 2015. With more than 8 billion dollars of pending transactions, total investment is likely to exceed 10 billion dollars for the third year in a row.
"It's absolutely an effective way to benefit both countries," said Victor Hoskins, director of Arlington Economic Development, referring the effort to select startups with good market development potential through organizing competitions. Hoskins keeps close connections with all kinds of American enterprises, meeting 150 to 200 entrepreneurs every month.
"When they (three US companies) get there (China), they will compete with companies from all around the world that are invited to the global competition. Just through that they are going to develop relationship," said Hoskins. "We love these competitions .. we will have another one coming up in March and we would like to invite companies from China, from Zhongguancun Science park to compete in Arlington. It's going to be on energy, solar energy and green technology."
Grandy also wanted her company to join more of such kind of competitions in the future, saying it is a "very good exposure" for startups to get market recognition and funding.
Zhang Tao, chief executive of Dao Ventures said, his company plans to hold another entrepreneurship competition in 2016 in collaboration with Chinese and foreign partners.
"We hope next year's competition will have broader international vision. Besides the United States we will consider Israel because United States, China, and Israel are considered to be the best three countries for entrepreneurship."
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