Key Investment Themes in Scientific and Technological Commercialization in 2023

In 2023, a chilling wind swept across the landscape, leaving many star projects in ruins. As hot sectors no longer guaranteed high returns, industry insiders even joked that the only two investment-worthy “sectors” left were resumes and visas.

Investment and financing for mature-stage projects have become increasingly cautious. Given that early-stage investments focus more on long-term potential, what did the landscape look like in 2023 for investments in the commercialization of scientific achievements originating from universities, research institutes, and clinical research?

We interviewed investors from multiple renowned institutions and summarized their“Key Investment Terms for the Commercialization of Scientific Research Achievements in 2023”。

Engaging in zero-sum games within existing markets yields only attrition for participants. An apple, no matter how many times it is exchanged, remains merely an apple; whereas the exchange and dissemination of ideas give rise to a systematic framework of knowledge value.

In this regard,Director of CAS StarGeneral ManagerYu XiangShared his insights and observations.

The ESK Value Investment Framework is an investment philosophy innovatively synthesized by Dr. Mi Lei, derived from the “Three Systems Model” (Economic-Social-Knowledge systems) that drives human societal development based on the concept of “Hard Tech.” Proposed in 2019 and officially released in 2023, the ESK Value Investment Framework focuses on the organic integration of Knowledge value (K), Social value (S), and Economic value (E). It primarily evaluates corporate contributions to promoting sustainable economic development, fulfilling social responsibilities, and advancing knowledge and technological progress, and is regarded as the Version 3.0 framework of value investment philosophy.

Over the past year, CAS Star has invested in ventures originating fromInstitute of Microbiology, Chinese Academy of Sciences; Changchun Institute of Applied Chemistry, Chinese Academy of Sciences; Xi’an Jiaotong University; Shanghai Jiao Tong University; Tsinghua Universityincluding several innovative drug and high-end medical device projects, all of which are technology transfer initiatives.

As the creator and practitioner of the “Hard & Core Technology” concept, CAS Star focuses on investing in frontier early-stage innovation projects in the hard-tech sector, promoting the commercialization of scientific and technological achievements. Committed to working alongside scientists, it strives to forge a “localized value investment path” unique to China’s hard-tech venture capital landscape, thereby catalyzing the next wave of technological revolution within China. In the field of biotechnology, CAS Star has invested in numerous projects characterized by long-term R&D commitments, leading patent portfolios, and high talent density, such as Zehui Biologics, Tiangang Immunotherapy, CAS Microneedle, and Qianhe Synbio.

We believe that in a market environment filled with uncertainty,The certainty of knowledge value can serve as a decision anchor for investment in the commercialization of scientific research achievements.

Once upon a time, the primary challenge in translating scientific research achievements into practical applications was how to break free from the internal cycle of academic papers and patents, achieving genuine industrial transformation. Today, identifying high-quality research outcomes and effectively facilitating their commercialization has become an essential competency for all institutions within the value chain.

One organization that deeply resonates with this is an emerging institution spun out of a university, which also boasts strong scientific research credentials.

To further enrich Peking University's technology transfer fund system,Peking University Technology Development DepartmentEstablished with the support of the Shanghai Lingang International Science and Technology Innovation Center of Peking UniversityShanghai Yanyuan Private Equity Fund Management Co., Ltd. (“Yanyuan Venture Capital”), and completed two self-funded investment projects in the second half of 2023.

Yanyuan Venture CapitalGeneral ManagerManagementPartnerLi JunIt was stated that the transformation of scientific and technological achievements has entered a critical phase of deep incubation and empowerment. It is essential to identify research outcomes that are genuinely integrated with industry. Beyond completing the initial 0-to-1 breakthrough, greater emphasis must be placed on scaling from 1 to 10 and achieving mass production from 10 to N. This requires investment institutions to possess greater long-term patience, deeper industrial expertise, and the steadiness to navigate cyclical fluctuations.

Li Jun stated that emerging frontier technologies, represented by general-purpose robots, next-generation AI applications, semiconductor materials and equipment, sensors, quantum technology, and gene editing, will become the new engines driving China’s economic growth over the next 10–20 years in the “high-computing-power” digital era. The true source of innovative power will gradually shift to top-tier universities with strong scientific research capabilities.

“The momentum of the era has shifted, and a new curtain is slowly rising.”

Li Jun’s conviction, imbued with the distinctive pragmatism of Yanyuan.

Shanghai Yanyuan Private Equity Fund Management Co., Ltd. (“Yanyuan Venture Capital”) is a market-oriented venture capital institution dedicated to investing in the early-stage commercialization of scientific and technological achievements. Established by the Peking University Shanghai Lingang International Center for Scientific and Technological Innovation, it focuses on key investment sectors including life sciences, information technology, new energy, and new materials within universities and research institutes, while also supporting other high-quality social sci-tech innovation projects. Adhering to the investment philosophy of “dedication, focus, and professionalism,” Yanyuan Venture Capital strives to support scientists in their entrepreneurial and innovative endeavors.Partner, providing comprehensive, high-value services for the initial stage of translating scientific and technological achievements into practical applications.

Amid intensifying competition in scientific and technological research, identifying blue-ocean sectors and pursuing breakthroughs in foundational technologies has become a more rational strategic approach. As a nearly nascent field, brain science places all competitors on a roughly level playing field, opening the door to greater possibilities.

As one of China’s most active venture capital firms, Gaorong Capital has long maintained a focused interest in investment opportunities involving the commercialization of early-stage scientific research achievements.

Vitaeris, co-founded by Academician Wang Xiaodong and focused on first-in-class (FIC) drugs for age-related degenerative diseases; Kelan Pharmaceutical, with Academician Song Baoliang serving as its scientific advisor and specializing in drugs targeting cholesterol metabolism; and Qihe Biosciences, a gene-editing-based biological breeding company co-established by renowned international gene-editing scientist Gao Caixia. Gaorong Capital invested in all these companies at their early stages.

In the field of translational brain science,Dr. Jingyi Liu, Gaorong CapitalShe focused on sharing her insights with us.

According to Dr. Liu Jingyi, there are three primary considerations in the overarching logic of investing in the translation of biomedical research achievements into clinical applications: addressing unmet clinical needs; making early strategic investments in niche blue-ocean sectors; and pursuing original Chinese innovations driven by cutting-edge hard technologies.

To date, Gaorong Capital has made representative investments in three key areas of brain science: innovative CNS drugs, novel medical devices, and interdisciplinary technologies. These include Fobe Biopharma, dedicated to the development of innovative CNS drugs; Vobi Medical, focused on the R&D and manufacturing of neurointerventional devices; and Weiling Medical, which is developing medical-grade implantable brain-computer interface (BCI) technology. Notably, Weiling Medical was co-founded by Professor Li Xiaojian from the Shenzhen Institutes of Advanced Technology, Chinese Academy of Sciences, while Fobe Biopharma was co-established by Professor Lu Bai, a renowned neuroscientist at Tsinghua University.

Dr. Liu, who transitioned from a clinician to a biomedical investor, remains committed to his original medical missionIn her view, the brain is the most vital organ in the human body, and neuroscience represents a frontier of scientific research, often hailed as the “crown jewel” of science. Patients suffering from brain and neurological disorders constitute a large population, endure painful disease courses, and impose significant burdens on families and society, yet current clinical intervention options remain limited. Innovative technologies emerging to address this substantial gap in unmet clinical needs are one of the key investment areas that Dr. Liu Jingyi and the Gaorong Capital team will focus on in the future.

Companies founded on the cutting-edge scientific research outcomes are often small in scale and face high operational risks. To effectively improve the survival rate of these companies that drive fundamental technological advancements, helping these early-stage small teams achieve practical implementation has become a primary focus for many.

Multiple Investor Partners of Proxima VenturesPossesses unique expertise and extensive practical experience in helping early-stage small teams achieve implementation.

To build robust know-how and deep industry insight, Proxima Ventures has long been committed to conducting in-depth research on global technologies and products. Through various channels—including major global industry conferences and on-site visits—the firm maintains real-time, close communication with physicians, industry experts, laboratories, incubators, and investors worldwide. Leveraging this foundation, Proxima Ventures remains highly attuned to cutting-edge developments in the industry.

In terms of implementation and commercialization, many partners and managing directors at Proxima Ventures have previously served as CEOs of startups. Their understanding of entrepreneurial ventures and entrepreneurs goes beyond theoretical knowledge; they genuinely empathize with the needs and pain points of founders and know how to assist them in gradually bringing their businesses to fruition.

Looking ahead, the team at Proxima Ventures believes that by accurately identifying targets, maintaining a long-term focus, resisting temptations, and persevering, there is an opportunity to create substantial clinical and economic value.

Between scientific research and the market, there is also a need for roles that provide constant companionship, bridge the two sides, convey warmth, and remain ever-present like a shadow—nourishing silently like flowing water, and offering timely and precisely calibrated assistance when needed.

FromLiu Ying of Danlu Capital, through heartfelt sharing, reveals the concern of an investor on the front lines, bridging scientific research and the market, for researchers and industry practitioners.

In Liu Ying’s retrospective, 2023 was a year fraught with twists and turns—from initial high hopes, to witnessing the bursting of bubbles, and finally to reestablishing order and finding new anchors. Despite the palpable sense of enduring a harsh winter, the team at Danlu remains steadfast in its belief in the power of China’s sci-tech innovation, firmly committed to exploring frontier innovations in medical technology and biotechnology.

Danlu Capital has long focused on unmet clinical needs, achieving a series of innovative technology transfers in 2023 across fields such as brain science, medical-engineering integration, and cell and gene therapy. Compared with previous years, Danlu Capital is also reshaping its investment logic and strategy, identifying truly valuable opportunities and honing the team’s resilience amidst greater difficulties and challenges, a harsh market environment, and testing periods of downturn.

Adhering consistently to the investment philosophy of “investing early, investing in small enterprises, and investing in innovation,” Danlu Capital has achieved successful commercial translations in multiple fields, including brain science. Among its portfolio is Lingxi Cloud Medical Technology, which develops quantitative analysis and auxiliary diagnostic methods for high-incidence brain diseases; its core team hails from the Neuroengineering Laboratory at Tsinghua University School of Medicine. Another portfolio company, Huawei Hengyuan, which develops human-derived immune-privileged cell technologies, was founded by Dr. Liang Jianlin, who also earned his Ph.D. and completed his postdoctoral research at Tsinghua University.

Liu Ying stated that in 2023, she met with dozens of university professors and young scholars who held clinical translation achievements. She personally felt their enthusiasm for translating these results into practical applications and sensed the undercurrent of a sci-tech innovation boom amidst the economic winter.Liu Ying hopes to serve as a “vital force” bridging research institutes and the market, befriending scientists and helping them identify and integrate value propositions to the greatest extent possible.

The commercialization of scientific research achievements is inherently a protracted endeavor. In the face of a cooling market, this timeline is likely to extend further, with uncertainties inevitably increasing. Throughout this process, it is essential for investors, founders, and all stakeholders to demonstrate greater inclusivity and exercise more patience.

Wang Xiao, Founder of Jiuhui VenturesHe shared his insights by reviewing the field of biomaterials for medical device consumables.

Wang Xiao believes that over the past year, centralized procurement of medical device consumables has become more moderate, with the original intent of trading price for volume gradually being realized. Meanwhile, intense domestic competition has driven companies to seek overseas opportunities, ushering in a historic window for the outward shift of high-end medical device manufacturing. Faced with the dual challenges of centralized procurement and global expansion, companies urgently need to break through bottlenecks in upstream material technologies to achieve cost control and performance upgrades. In recent years, China’s research output in biomaterials has surpassed that of the United States, marking a significant enhancement in independent innovation capabilities; however, the industrial translation of scientific achievements remains at an early stage.

Jiuhe Venture Capital has observed that in the transition from “Me-too” to “First-in-Class” innovation, founders have evolved from industry executives into scientists. While most teams still struggle to strike a proper balance between scientific research and commercialization, Jiuhe Venture Capital remains convinced that the broader trend is moving toward deeper technological frontiers, necessitating greater patience with entrepreneurs. Looking ahead to 2024, Jiuhe Venture Capital will continue to uphold its early-stage investment philosophy, collaborating closely with the scientific and industrial communities to accelerate the practical application of biotechnologies, with the aim of benefiting patients as soon as possible.

The editors believe that, as investors and researchers converge in mutual pursuit, a robust network of roots is spreading.

A model for translating scientific research achievements into practical applications, validated by universities and the market, is gradually taking root; a Chinese market that spans the upstream and downstream of the industry and can achieve internal circulation in certain areas is gradually taking root; a Chinese original technology system based on innovative research and development, exporting products to global blue-ocean markets, is gradually taking root.

As a long-term endeavor, what is needed before this great tree can spread denser foliage, bear more abundant fruit, and withstand more unpredictable storms is precisely the sturdy root system deeply embedded in the soil, out of sight.

When its roots penetrate deep into the soil, the potential energy of this mighty tree will become visibly apparent and unstoppable.