Motorola Inc. said it invested in a Chinese venture capital fund in order to strengthen its foothold in the world's fastest-growing wireless communications market and boost the start-up community in China.
The company's venture capital unit, Motorola Ventures, invested an undisclosed amount in Shanghai NewMargin Venture Capital Co. Ltd., its first investment in a China-based venture fund and its fourth overall in a venture fund.
"We're stepping in to try to jump-start that start-up community in one of the world's great growth markets," Warren Holtsberg, general manager and corporate vice president of Motorola Ventures, told Reuters in an interview. He called China a priority for the company.
Motorola, the world's second-largest maker of cell phones, began investing in China in 1987 and has since invested more than U.S. $3.4 billion with the goal of hitting $10 billion cumulatively by the end of 2006.
In China, Motorola was the largest foreign company in terms of sales last year, according to Chinese government data, remains the market leader in cell-phone sales and employs 12,000 people.
NewMargin's investment philosophy is focused on high-growth Chinese companies led by local managers. In addition to technology, the fund invests in biomedical, material sciences, and other emerging growth areas. It has more than $100 million under management.
Motorola will have a seat on the fund's board and join its investment committee, which determines how funds are spent.
Motorola Ventures previously invested in a small Chinese start-up, an Internet-based stock notification company that used Motorola two-way pagers for stock information delivery.
The venture unit sees about 5,000 to 7,000 investment opportunities each year, and might invest in 25 of those, said Mr. Holtsberg, who expects to invest about $75 million this year.
Motorola, citing PricewaterhouseCoopers data, said it was the second most active corporate venture investor last year as ranked by number of deals.
For the first time ever, Motorola invested this summer with Nokia. In June, it joined its larger Finnish rival in investing in Bitfone, whose technology allows cell-phone software to be updated or fixed wirelessly.
Motorola Ventures' portfolio numbers about 60 companies, including ones with technologies that allow the streaming of broadcast television to cell phones and the ability to deliver data wirelessly to vehicles. The company looks for an impact from investments in 12 to 18 months, Mr. Holtsberg said. (Reuters)
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