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A combination of public and private entities have banded together to form a loosely organized investment consortium that will focus on early stage biotech enterprises. The Biotech Science and Technology Venture Alliance combines 22 partners, some from industry, others from academia, including companies such as Shijiazhuang Pharmaceutical Group, DSM China and the Chinese Academy of Sciences (CAS).

Each member of the alliance can decide how to invest its money. Members do not commit their money to a general fund, but to individual projects, which makes the organization of the alliance difference from a typical venture capital fund.

So far, the alliance has raised 348 million RMB ($51 million), which it plans to expand to 1 billion RMB ($145 million) in the near term. Governmental agencies haven’t contributed yet, though the Chinese Academy of Sciences and the National Development and Reform Commission are expected to participate in fundings that take companies to commercialization. Governmental agencies are also permitted to add 30% on top of investments made by individual companies. Thus, the Chinese Academy of Sciences could add $6 million onto a $20 million investment made by Shijiazhuang Pharmaceutical.

Zhang Zhibin, director of the CAS Life Science Bureau and a founder of the venture alliance, said the alliance improves upon purely private investments made directly by individual companies because the alliance investments include the input of the Chinese Academy of Sciences, which finds worthwhile investments and helps to control risks.

For the young companies, the advantages of having a private company as an investor are the experience and knowledge that the investor brings to the new enterprise, including a familiarity with the marketplace. Also, despite numerous government plans to help fund biotech start-ups, young companies continue to have trouble finding the financing they need to turn an interesting idea into a marketed product. Usually the government funding falls short of the full sum needed to complete the process.

One example of an investment made through the alliance was a $20 million funding of GreenBio from DSM China to advance GreenBio’s biodegradable material.

The alliance said it would target investments in biopharmaceuticals, biomaterials, industrial enzymes, biofuels, and organic acids.