Kai-Fu Lee, who left his job as Google's China head last week, launched an angel investment fund on Monday that aims to cultivate three to five new high-tech companies per year in China.
The fund, named Innovation Works, launched with $115m (£70m) in investment from major IT players including Foxconn and Legend Group, the parent company of Lenovo, it said in a statement. The fund will use the money to train young entrepreneurs and help them build companies that could later be sold or listed on a stock market. It will focus on the Internet, mobile Internet and cloud computing industries in China.
The fund aims to develop 50 companies and train 500 people in 10 years, and may eventually seek a public listing itself, Lee told reporters at a briefing.
"My hope is there will be a company in these 50 that becomes a world-class company," he said.
Innovation Works will speed the growth of its companies by giving them shared resources, such as software and server room space, and potentially by helping them partner with the fund's own investors, such as Legend, Lee said.
The fund is launching in a market where entrepreneurial skills are currently scarce, Lee said. Compared to most angel investment outfits, the fund will both keep a larger cut from the sale or listing of its offspring and give them more support, Lee said. The fund may be able to spin off companies within its first year, and it will pay back its investors when it begins doing so more regularly after three to five years, Lee said.
China's Internet industry is booming as incomes rise in the country and more people get online. Official statistics say China had nearly 340 million Internet users at the end of June, more than the population of the U.S.
Other investors in Innovation Works include venture capital firm WI Harper Group and Steve Chen, a co-founder of YouTube.
Lee left Google last week after four years as the company's president of Greater China, during which he led the company's growth into a formidable player in China's online search market.