New Delhi: ZDream Ventures, an India-focused venture capital firm based in Beijing, on Tuesday launched its start-up incubator ZDream Labs in Gurugram.
The incubator, housed in a 5,200 sq ft. facility, will provide mentorship and training to Indian start-ups and access to capital from Chinese VCs and tech companies, besides ZDream’s direct investment.
It will initially invite early-stage start-ups in content and media, education and logistics and warehousing, the company said.
The move is part of a strategy to double down on the local ecosystem and serve as a bridge between Chinese investors and start-ups discovery in India.
In an interview, founder and chief executive Li Jian said ZDream is an early stage investor and accelerator that consults Chinese firms on investment in India.
“All Chinese investors approach us—from large and small VCs to PEs and even secondary market investors… We also play the role of portfolio manager for Chinese companies that have investments in India, or are co-investors," Jian said.
Jian setup ZDream Ventures in Gurugram in 2015. It is the investment arm of Draphant, a TMT (telecom media and technology) consultancy group Jian formed, along with Jason Wang in 2013. The group also operates news and technology website ZDreview.com that publishes content on Indian internet and tech space in Chinese.
ZDream picked up some early stage investments—namely, Milkbasket, Hotify and Iamwire—in 2014-15 to survey the landscape. With two of its investments in media, and a third content portal of its own, Jian believes the media and content sector in India is ripe for disruption.
“There is a need of supporting infrastructure for new business models. While a lot of business models have come up over the last few years and have received high investment, we believe the supporting infrastructure is premature for some of them," Jian said.
Moreover, according to Jian, Indian start-ups, most of which are created around business models in the US, require Chinese business and technology acumen to work in the local market.
“At this point we have more strategic investment from Chinese investors that financial investment. We have seen Alibaba invest in Paytm and Tencent invest in Hike, and so on," Jian said. “I think for Chinese VCs to come into India as financial investors will take some time. Before that happens, we have to spend time studying the market," Jian said.
For this purpose, ZDream acquired start-ups database and intelligence platform Xeler8 last year. The acquisition gave the firm access to proprietary database and analytics tools to survey companies and at the same time share the resources with its clients and investors in China.
“We now have research capabilities. Based on the result, we figure out what business models will work. Some businesses will work after three or five years, we don’t want to get into those businesses right now," Jain said.
Jian, who spends his time equally between Beijing and Gurugram, was earlier the public affairs manager for Huawei in NCR, and led Chindia chamber of commerce, a policy advocacy group for Chinese firms in power and steel.