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December 14, 2016

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US tech startups attract Chinese investment

A US company known as Disease Diagnostic Group (DDG) built buzz in the US east coast startup circle, as it won a title in a recent competition backed by Chinese investors in Arlington of the eastern US state of Virginia.

The DDG, founded by John Lewandowski, a PhD student at Massachusetts Institute of Technology (MIT), has invented a platform using magneto-optical technology to quantitatively diagnose a disease like malaria faster and more accurately at a much less cost than current solutions.

The technology can diagnose malaria in one minute with one drop of blood from a fingertip at the cost of just 1/10th of the current solution, said Alphonse Harris, the chief operating officer of the DGG at the final of the second Dongsheng Dao Ventures US-China Entrepreneurship Competition.

The annual competition, which started last year, was designed to help find high potential and early-stage foreign tech companies that want to get involved in China’s growing startup ecosystem.

The DDG beat nine competitors at the final of the competition which has attracted approximately 300 startups around the world in such businesses as the mobile Internet, environmental protection, new energy, medical care and education.

Judges chose DDG as the winner for the great social significance of its product that could save millions of people especially in developing countries.

“The point of our competition is we also have to think about the social impact, not just how much money we can make. So that’s why we chose DDG,” said Wayne Siby, one of the five judges of the competition.

“As an investment it (the DDG) is not necessary going to make a lot of money but in terms of saving lives, in terms of health, in terms of the impact on the world we feel that especially in the developing countries ... that’s a great solution,” said Siby, a veteran activist who has pursued combining investment with social benefit and impacting both in the United States and China during the past 40 years.

Experts also believed now that not only big companies, but also small and medium-sized companies, and even startups should seriously consider their social impact, which could help them attract more supports from investors, governments and company workers.

“A lot of investors, such as ourselves, were looking for the social impact, not just how to make money,” said Siby, who is also the founder of Calvert Funds, one of the largest socially responsible investment companies in the United States, with assets of US$15 billion.

“It’s about having a long-term position in the society that develops a value proposition where you could both make money and do good,” he said.

“I do believe there is a program in the United States ...that particularly focuses on innovated technologies and a lot of their technologies these days have social implications,” said Victor Hoskins, director of the Arlington Economic Development.

“(The US) government does encourage that,” Hoskins added.

As the chief of the local government in attracting investments into Arlington and promoting the local economy, Hoskins has kept close connections with all kinds of American enterprises, meeting 150 to 200 entrepreneurs every month.

He found nowadays that the social impact is “a part of the basic thing of a company,” which can help improve its competitiveness.

“I think it really gives the company a competitive advantage because really you are not just selling a product. It’s part of the belief system that keep healing people as part of your work. It’s really a strong motivator for people to do great work,” said Hoskins.

This year’s event was backed by Chinese venture capital firm and investment consultancy Dao Ventures and the Dongsheng Science and Technology Park, a unit of the Zhongguancun Science Park in Beijing, as well as Arlington Economic Development.

As the winner of the event, the DDG got a cash prize of US$10,000 provided by Dao Ventures and a ticket to Beijing, where it will compete with other finalists from China for a grand cash prize of 1 million yuan (US$144,173) provided by Dongsheng.

The competition will be broadcast in a live TV show, as well as free office space in Dongsheng’s Beijing accelerator and mentoring service.

Harris from the DDG said that the DDG’s founder Lewandowski once visited China through a MIT program. He expected this new trip to help transit the company from “pre-clinical to post clinical trials, actually distributing a device and make an impact.”

“We were really excited to meet up with people ... meet up with new potential manufacturers and partners and show them how far we’ve come over the last two years and show them our plan,” Harris added.

The possibility for the DDG to get some Chinese investments is “relative high” as the Chinese people, government and business society began to pay more attention to the social and environmental impact of a company, said Tao Zhang, the chief executive of Dao Ventures.

He added that a Chinese startup on curing cancer won the grand cash prize last year.

Siby was also optimistic about the future development of those Chinese companies with high social and environmental impact, as the government and the people are caring more and more about the environment and personal health.

He said his company invested in the China Environment Fund, a private fund focusing on clean-tech and environment-related investments 12 years ago, when people thought it couldn’t have made money. Now the fund has grown to “a half billion dollar fund in China.”


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