When venture capital thrives, innovation flourishes. Why has Zhejiang become the "ideal partner" for venture capital?

(CNS) May 25, Hangzhou, Zhejiang (Guo Qiyu) When venture capital thrives, innovation thrives; when capital stays steady, industries thrive. As a key link connecting technological innovation with industrial development, the cultivation and clustering of patient capital concerns the underlying tone for the development of new quality productive forces.

On March 24, the Zhejiang Province Venture Capital High-Quality Development Conference was held in Hangzhou. Multiple forces—including government departments, venture capital institutions, and technology enterprises—gathered together. This was both an exercise in rallying the industry around shared goals and a precise, targeted launch for development.

Through this conference, it is also possible to see Zhejiang sending multiple signals of confidence to the outside world. When venture capital upgrades from a “provider of funds” to an “innovation partner,” the province is injecting fresh vitality at the source for innovation-driven development with institutional strength, a superior ecosystem, and unwavering accompaniment.

March 24, the Zhejiang Province Venture Capital High-Quality Development Conference was held in Hangzhou. Photo provided by Zhejiang Province Innovation Investment Group

First, it conveys policy confidence that “venture capital is a key support for building an innovative Zhejiang.”

Innovation is the primary driving force for leading development, and venture capital is the engine of innovation. As an economic powerhouse province, Zhejiang will raise the development of venture capital to a strategic level. It will empower venture capital by “loosening restraints” through institutional innovation, conveying policy confidence in “policy-backed support, mechanism-based escort, and full-chain protection.”

This policy confidence stems from a profound understanding of the essence of venture capital. Venture capital is not only an infusion of funds, but also innovation in ways to organize industries. Through this “golden thread” of venture capital, it is possible to effectively connect laboratories, concept validation platforms, incubators, and industrial parks, integrate the entire chain from basic research to industrial application, and promote deep integration among the innovation chain, industrial chain, capital chain, and talent chain.

This policy confidence stems from Zhejiang’s solid foundation in venture capital. Government investment funds are an important driving force for high-quality development in venture capital. In Zhejiang, provincial-level government investment funds, with an initial scale of 35.1 billion yuan, are used as the traction to leverage and form a fund system with a total scale of 300 billion yuan. To date, they have cumulatively invested in more than 1,800 enterprises in the province and helped 100 enterprises successfully list. Of particular note is that the country’s first provincial social security science and technology innovation fund has been launched, providing capital support across cycles for hard technology with an over-18-year ultra-long duration. The firm leadership and leverage provided by the government fund system have laid a solid capital foundation for the venture capital industry.

This policy confidence stems from the continuous improvement of a tolerance-for-failure mechanism and full-chain protection. The conference clearly proposed that Zhejiang will optimize the performance evaluation system for state-owned capital venture capital funds, break the constraints of the “theory of only short-term returns,” and enable government funds to dare to invest early, dare to try things and learn from mistakes, and dare to accompany them over the long term. At the same time, it will smooth the full-chain “raise-invest-manage-exit,” and improve diversified exit channels such as S funds and mergers and acquisitions.

Second, it conveys opportunity confidence that “Zhejiang is a fertile ground for venture capital.”

For venture capital to move steadily and far, it depends on a favorable industrial soil, a business environment, and capital support. At the conference, Zhejiang sent an invitation to the world: “Investing in Zhejiang means investing in the future,” aiming to leverage its unique advantages and lay the groundwork for venture capital development.

Industrial advantages are the soil where venture capital takes root. Today, Zhejiang creates more than 6% of the country’s GDP with only 1% of the national land area, achieving synchronized resonance between industrial depth and technological innovation. A digital economy strategy honed over two decades enables Zhejiang to build on its strengths in the age of artificial intelligence—by 2025, the province’s core artificial intelligence industry revenue is expected to be around 680 billion yuan, growing by more than 20%. General models such as Alibaba Qianwen and DeepSeek are leading globally in performance.

A business environment is the guarantee for venture capital to take root. In this year’s survey “Ten Thousand Private Enterprises Rate the Business Environment,” Zhejiang’s four major indicators—market environment, rule of law environment, innovation environment, and government affairs environment—rank first nationwide. From the governance philosophy of “ready to help when there is a need and no disturbance when there is none,” to the administrative efficiency of “run no more than once,” Zhejiang is providing service warmth of “I take responsibility for sunshine and rain, and you take responsibility for thriving growth,” so that innovators can innovate with peace of mind and investors can invest with confidence.

Capital advantages are the lifeblood for venture capital development. The landing of the 50 billion yuan Zhejiang Social Security Science and Technology Innovation Fund, and the precise push of the 74.5 billion yuan “4+1” special funds… Today, Zhejiang’s provincial government investment fund system has a total scale of 300 billion yuan. At the same time, large amounts of private capital with keen market sensitivity form synergy with government funds, jointly building a mature, diversified capital ecosystem.

Third, it conveys ecosystem confidence that “venture capital and innovation grow together.”

Venture capital is a systematic undertaking that requires coordinated efforts from government, the market, and society. Zhejiang is building a venture capital system covering the entire lifecycle of enterprises.

Full-cycle empowerment is reflected in the precise layout of fund matrices. At present, Zhejiang is focusing on building two major fund groups. The fund group under the Zhejiang Social Security Science and Technology Innovation Fund includes strategic emerging industries, future industries, an M&A mother fund, and direct investment funds for major projects, covering all stages from investing early and in small amounts to consolidation through mergers and acquisitions. The “4+1” special fund group focuses on key areas of advanced manufacturing and technological innovation, and has cumulatively made investment decisions on more than 500 projects. This capital layout covering the whole chain enables enterprises, at different stages of development, to find suitable capital partners.

Full-cycle empowerment is reflected in the professional backing of venture capital institutions. At present, Zhejiang has become one of the most concentrated regions for venture capital institutions nationwide. In 2025, the province’s new venture capital fundraising count reached 1,367, with an amount of 257.1 billion yuan, ranking first nationwide. As a local institution in Zhejiang, Primavera Capital has already invested in nearly 300 Zhejiang projects. Among them, 78% are in the early-stage category and 90% are technology-related. It has cultivated 107 provincial-level or above specialized, refined, unique, and new enterprises.

Full-cycle empowerment is reflected in the follow-on accompaniment from “building foundations” to “providing blood.” Unitree Technology moved from the laboratory to global markets, and Blue Arrow Aerospace moved from “chasing dreams” to “reaching the skies.” With venture capital strength propping them up, a group of Zhejiang enterprises dare to tackle “bottleneck” technologies, dare to invest in heavy-asset R&D, and dare to make long-term industrial layouts. To foster a world-class innovation ecosystem, this conference released the initiative letter “Patient Capital Co-constructing Zhejiang’s Innovation Ecosystem,” calling on governments, capital, enterprises, universities, and research institutes to break down barriers and jointly build a closed-loop innovation ecosystem of “discovery—investment—cultivation—growth.” (End)