Merck KGaA has announced a new RMB 100m (€13m) seed fund to foster startups in China – with an aim at fostering innovations in health and life sciences.
The investment will be made through M Ventures, Merck KGaA’s corporate strategic venture arm, with intended investments to be made in Chinese seed-stage companies with individual investments ranging between €500,000 and €1m. It will be jointly managed by M Ventures and Merck China innovation hub.
The initiative focuses on early innovations developed within the Chinese innovation ecosystem, that are focused on healthcare, life science, performance materials or new businesses. The seed investment is intended to help the startups reach the next value inflection point with 18-24 months.
“This is the first activity of our corporate strategic venture arm in China,” said Stefan Oschmann, CEO and chairman of the executive board of Merck.
“Our seed fund initiative aims to deliver strategic returns so as to underscore our position as an innovator in China and to strengthen our ties to the dynamic Chinese innovation ecosystem” he added.
Innovation hub
Merck has also opened its new innovation hub in Shanghai, where it will invite startups, academic institutions and other industry players to become involved in joint innovation projects.
According to Merck, the hub was established in February 2018, and has since already began building partnerships in three of the company’s innovations fields, and in AI-enabled health solutions.
As of this month, six startups from China and other Asian countries have successfully taken part in the first phase of the Merck Accelerator in China. This programme helps Chinese startups to connect with global innovation networks, and develop research further.
Merck also announced plans for a second innovation hub in Guangdong in Southern China in late 2018. It will promote innovation in new materials, life science, healthcare and other areas.
The company’s investment in China does not stop there, with around 4,000 employees fro the company in China. Merck’s to manufacturing sites in Nantong, China also represent a total investment value of €250m.
Ongoing reforms in the country’s medicine market, and a renewed push for innovation in life science and technology, have made the Chinese market an increasingly attractive place for Western pharma companies.
This includes AstraZeneca, which has an innovation centre in Wuxi, China, where it pilots new approaches in partnership with other local companies.