Dialogue on Equity Investment "Suzhou Model" Led by Suzhou Chuangtou: Tripled in Three and a Half Years, 1.8 Billion Leverages 320 Billion

Zhang Tianlun

He Kun, CEO of Suzhou Innovation Investment Group (hereinafter “Suzhou Chuangtou”), is one of the practitioners who is well acquainted with the “Suzhou model.”

In 2007, at the age of 31, He Kun joined the predecessor of Yuanhe Holdings—at that time, also commonly abbreviated as “Suzhou Chuangtou,” Suzhou Venture Capital Investment Group Co., Ltd. This institution, seen as a “test field” for Suzhou’s state-owned asset venture capital and investment, gradually built a system of “state-owned asset guidance, market-based operations, full-cycle capital supply, and integration of industry investment and production investment,” which was the core early form of the “Suzhou model.”

In 2023, He Kun was reassigned to Suzhou Chuangtou, newly formed as an integrated entity. “The establishment of Suzhou Chuangtou originally aimed to enable the Suzhou municipal government to create a core state-owned venture capital entity under the city, connect upward with high-quality national and provincial resources, coordinate investment forces at all levels across districts and counties below, and form a unified force of capital,” He Kun said.

This “giant” entity was formed by integrating a number of municipal platforms in June 2022, including Suzhou Guofa Venture Capital Holding Co., Ltd. (hereinafter “Guofa Chuangtou”), Suzhou Industrial Investment Group Co., Ltd. (hereinafter “Industrial Investment Group”), Suzhou Science and Technology Innovation and Entrepreneurship Investment Co., Ltd. (hereinafter “Ke Chuangtou”), Suzhou Angel Investment Guidance Fund (hereinafter “Suzhou Angel Mother Fund”), and Suzhou Innovative Industrial Development Guidance Fund (hereinafter “Suzhou Fund”), among others. It started operations with registered capital of RMB 18 billion and an initial managed scale at the level of RMB 100 billion.

At that time, it was precisely during the wave when state-owned venture capital and investment platforms across the country were rolling out industrial fund clusters. Suzhou Chuangtou’s positioning, at first glance, seemed to align with a common trend in which capital guides resources to cluster around core industries. However, within three and a half years, its managed scale doubled to RMB 320 billion and it participated in more than one-third of Suzhou’s financing events. Not only did this make it a role that was difficult to bypass among numerous general partners (GPs) and in the fundraising rosters of Suzhou innovation enterprises, but as a leader, it also made the “Suzhou model” a sample that other regions’ state-owned development venture capital entities could not help but compare and observe.

Looking across Suzhou Chuangtou’s fund map, on the one hand, it collaborates with the Social Security Fund to establish and manage the Jiangsu Social Security Science and Technology Innovation Fund with a scale of RMB 50 billion. It also established Suzhou Zhanxin Private Fund Management Co., Ltd. (hereinafter “Zhanxin Management Company”), and together with the provincial Zhanxin mother fund, set up the Suzhou Zhanxin Fund with a scale of RMB 24 billion. In addition, it joined hands with institutions including the National Manufacturing Transformation and Upgrading Fund and CNEM Group to initiate and establish multiple funds at the scale of hundreds of billions, such as an industrial mother fund, a fund for advanced equipment and industrial fundamentals investment, and the Yangtze River Delta regional fund under the National Venture Capital Guidance Fund, thereby strengthening Suzhou’s advantage in securing positions in high-end manufacturing and strategic emerging industries.

On the other hand, Suzhou Chuangtou links with Suzhou’s top ten sectors, establishing 13 special industrial funds with a total scale of RMB 24.5 billion, effectively leveraging regional distinctive resource endowments to enable development in a differentiated way. In 2025, Suzhou Chuangtou, through its angel mother fund, took on the task of handling the RMB 100 billion-level Suzhou Talent Fund, focusing on frontier tracks such as biopharmaceuticals, artificial intelligence, low-altitude economy, and embodied intelligence, further strengthening early-stage hard-technology investment.

As He Kun introduced, direct investment capability building was a key adjustment for Suzhou Chuangtou over the past two years. Data shows that since its establishment, it has added 302 direct investment projects. It has also added 16 listed companies through these projects, including Haochen Software, Aisen Semiconductor, Tianju Dihé, InnoCecs, and Zhengli New Energy. Among them, in 2025, there were 139 direct investment projects, with an annual total investment amount of RMB 3 billion.

Suzhou Chuangtou’s registered capital is RMB 18 billion. Matching this against the RMB 320 billion managed fund scale means it has successfully leveraged about 17 times the amount of social capital and industrial resources.

In the primary market era led by state-owned capital, how does Suzhou Chuangtou integrate its already enormous resources, bring high-quality capital into Suzhou, and why does it further increase efforts on the direct investment segment layout? With these core questions, Securities Times and He Kun held an in-depth dialogue to discuss his practices and thinking over the past two years at Suzhou Chuangtou.

From preceding to following: Suzhou Chuangtou’s three-year transformation

Securities Times: Please introduce the background behind the establishment of Suzhou Chuangtou.

He Kun: Suzhou Chuangtou was established on June 18, 2022. Its birth is closely related to the venture capital landscape in Suzhou at that time. At that time, although each sector had relatively strong district-level investment institutions, from the perspective of Suzhou as a whole, investment strength was still not concentrated enough.

However, at the municipal level, Guofa Chuangtou, as a secondary state-owned investment institution, was constrained by factors such as asset size and the structure of limited partners (LPs), which limited its ability to lead the development of the city’s equity investment industry and connect with higher-level resources.

The initial intention behind establishing Suzhou Chuangtou was that the Suzhou municipal government hoped to build this city-level core entity to connect with national and provincial high-quality resources, coordinate investment forces at all levels in cities, districts, and counties, and form a unified force of capital. Over these two years, our core work has precisely been carried out around the goals of “two-way coordination,” promoting Suzhou’s industrial transformation and upgrading.

Securities Times: In recent years, how has Suzhou Chuangtou operated?

He Kun: First is cooperation on high-caliber resource matters. At the national and provincial levels, Suzhou Chuangtou currently manages the Jiangsu Social Security Science and Technology Innovation Fund with a scale of RMB 50 billion. In addition, we also manage the Suzhou Zhanxin Fund with a scale of RMB 24 billion. The Yangtze River Delta fund under the National Venture Capital Guidance Fund led by the National Development and Reform Commission is also one that we participate in as an LP.

Second is the layout at the municipal level. Suzhou Chuangtou manages most of the municipal industrial funds of Suzhou. For example, Suzhou’s RMB 10 billion-level talent fund focuses on specific tracks such as cross-border e-commerce and the services industry.

Finally is cooperation with districts and counties. After Chairman Wang Mou came to Suzhou Chuangtou in 2023, we began to推进 and promote cooperation with all districts and counties. We set up funds around their leading industries. Most of these funds are co-funded and established in cooperation with districts and counties. We will also invite other state-owned LPs to participate, helping each district and county strengthen resource linkages.

In 2023, we had basically completed the establishment of fund cooperation with all 10 districts and counties across the city. The重点 for 2024 is to推进 cooperation with the provincial Zhanxin fund. Starting in 2025, we will put more effort into large funds and key projects. In 2024, there were more than 700 financing events across Suzhou city. Projects in which Suzhou Chuangtou invested through “direct investment + subsidiary funds” accounted for about one-third of the city’s total. In 2025, this proportion was further increased.

Coordination of responsibilities: building a dynamically updated project pool

Securities Times: How are the main subsidiaries of Suzhou Chuangtou positioned and divided among responsibilities?

He Kun: In 2025, we clearly defined the positioning of each subsidiary.

Guofa Chuangtou is the main force, with the most personnel and the largest scale. Guofa Chuangtou’s investment strategy is “invest at both ends”: one end is investing in early-stage projects with higher risk, which is patient capital; the other end is investing in projects that are close to an IPO, have matured, and have determinacy.

Ke Chuangtou is the former institution under the Suzhou Municipal Science and Technology Bureau. It mainly focuses on projects before the A round.

The management team of the Suzhou Angel Mother Fund (Suzhou Angel Venture Capital Guidance Fund Management Co., Ltd.) comes from a mother-fund background. Starting in 2024, it began to conduct direct investments, mainly using a follow-investment strategy, following the subsidiary funds to invest in early-stage projects. The liaison office set up by Suzhou Chuangtou in Shenzhen is also operated by this team, which marks Suzhou Chuangtou’s first external expansion. Currently, a future industry investment fund with a scale of RMB 500 million is being prepared at the Shenzhen liaison office.

Suzhou Equity Investment Fund Management Co., Ltd. manages the Suzhou Fund using a “mother fund + S fund (private equity secondary market fund)” operating model. It is the only market-oriented platform, and the team’s shareholding ratio is relatively high.

Suzhou Institute of Industrial Technology Co., Ltd. (hereinafter “Institute”) mainly carries out work around building Suzhou’s academies and innovation clusters. In addition, it also undertakes the execution of innovative work in specific fields for the science-and-technology innovation funds.

Suzhou Science and Technology Investment Promotion Center Co., Ltd. (hereinafter “Investment Promotion Center”) is a municipal-level technology investment promotion entity established in August 2023. It mainly coordinates the city-wide technology investment promotion resources and forms synergy with our investment business.

Zhanxin Management Company is established in cooperation with Jiangsu High Investment, and it mainly manages Suzhou’s Zhanxin Fund.

Securities Times: How does Suzhou Chuangtou do overall management for LPs, funds, and employees?

He Kun: For example, in our cooperation with central enterprises, most of it is carried out under the strategic cooperation framework between Suzhou and those central enterprises. The State-owned Assets Supervision and Administration Commission (SASAC) of the State Council has issued clear requirements to support central enterprises in technological innovation. Meanwhile, Suzhou has a very strong atmosphere for science and technology innovation. As a result, when central enterprises come to Suzhou to carry out cooperation, they often propose the need to jointly establish a science-and-technology innovation fund. In such funds, we will serve as members of the investment decision committee, enabling us to fully掌握 the specific details of the projects and also hold fully market-oriented decision-making authority. At the same time, we will also use channels such as the investment decision committee to guide the fund to increase investment in local projects in Suzhou.

At the level of mechanisms and governance structure, incentive and constraint mechanisms in state-owned venture capital have long been an industry challenge. Therefore, Suzhou Chuangtou is also exploring and testing whether it can introduce some incentive and constraint mechanisms that comply with state-owned asset supervision regulations. In terms of management, we have implemented staff grading and job posting for all employees, and this work was fully implemented in 2024.

In addition, to match the cooperation needs of different segments, we also divide business teams based on the dimensions of industrial tracks + regional segments. We collect the “four lists” of leading enterprises, high-tech enterprises, specialized and innovative cultivation pools, and key projects for introduction from the top ten district and county segments. We build a dynamically updated industrial map and project pool and implement refined management.

Increasing focus on direct investment: deeply rooted in every segment

Securities Times: Why has Suzhou Chuangtou continued to increase the intensity of direct investment in recent years?

He Kun: Over the past two years, Suzhou Chuangtou’s annual direct investment projects increased from more than forty in 2023, to 92 in 2024, and then to 139 in 2025. Over the past year, the total amount of Suzhou Chuangtou’s direct investments was roughly RMB 3 billion.

Our increase in direct investment is mainly due to Suzhou itself. Currently, Suzhou has roughly 10,000 newly added technology-based and innovation-oriented enterprises each year. Whether in early-stage or late-middle-stage, there are enough investment opportunities, especially in Suzhou’s leading industries such as biopharmaceuticals, automobiles, electronics, semiconductors, and high-end equipment.

Also, from our business system, not doing direct investment would be a waste of resources. First, the GPs we cooperate with are among the best teams in China. If we have the opportunity to participate in their invested projects, we should fully utilize this resource. Second, the investment cycle and return cycle of the mother fund are relatively long. Direct investment can help balance the return cycle and improve the company’s cash flow turnover situation.

Securities Times: What are the mechanisms for tolerance and correction against mistakes in the company?

He Kun: Our core principle for tolerance and correction against mistakes is “diligence and duty of care.” In the process of investing, only when the investment team fulfills its duties with diligence and duty of care can it be reasonably granted exemption from liability.

Securities Times: Compared with the many similar institutions nationwide, what is the biggest distinguishing feature of Suzhou Chuangtou as the largest city-owned state asset investment platform?

He Kun: Still, it’s direct investment. Suzhou Chuangtou may be one of the state-owned investment platforms with a relatively high intensity of direct investment.

We are deeply rooted in Suzhou’s various segments. Kunshan, Zhangjiagang, Changshu, and Taicang in Suzhou are all in the top ten among China’s top counties in competitiveness ranking. Each region has strong economic strength, and our business teams have been rooted in Suzhou for many years, with strong capability to mobilize resources. Based on this background, we quickly penetrate into each region through activities such as the “Suzhou Chuangtou Partner Plan,” “Register with Founders,” and “1030 Industrial Salon,” mobilizing the best resources locally, signing a batch of investment projects and introduced projects, and announcing funds for cooperation and establishment.

Looking ahead: improving talent attraction

Securities Times: What methodology does Suzhou Chuangtou use in selecting partner GPs? What complementary support will it provide for partner GPs?

He Kun: The key is still to look at performance. Our approach mainly focuses on selecting “leading white-horse GPs.”

First, we will recommend high-quality projects in Suzhou to the partner GPs, including some direct investment projects and subsidiary fund projects that we have invested in or are currently推进, helping them quickly understand company situations, connect with projects, and avoid detours.

Second, around Suzhou’s “1030” industrial ecosystem, we will host hundreds of industrial salons every year. Each salon focuses on one industry, inviting companies to present and pitch, and inviting relevant financial institutions, GP teams, intermediary institutions, and project parties to participate—building a matching platform where project financing and investment institutions can find and connect with projects.

Securities Times: For future development, what new strategies and ideas do you have?

He Kun: Talent is the top issue. At the municipal level, although we are encouraged to introduce high-end talent and there is corresponding policy support, it is still not easy to find the right talent. We are also continuously exploring—for example, trying to balance state-owned asset attributes with incentive mechanisms that enhance market-oriented competitiveness. Going forward, we will further optimize based on actual circumstances to improve the group’s talent attractiveness and the team’s initiative.

On the funding side, Suzhou Chuangtou’s LPs are currently mainly national-level funds, provincial state-owned capital, local state-owned capital, and financial asset investment companies (AIC). The composition is relatively single, and the proportion of market-oriented capital is relatively low. In the future, we hope to expand the proportion of market-oriented fundraising, focusing on insurance capital and overseas capital.

In terms of investment scope, currently it is mainly Suzhou and the Yangtze River Delta region. In the future, we will gradually expand into regions such as the Greater Bay Area.

(The author is a researcher at the Think Tank Center of the Securities Times · National Venture Capital Association Alliance)

(Editor: Liu Chang ）

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