Shanghai investment group behind purchase of Cambridge University chip spin-off

A Shanghai investment group owned by a number of private and state-owned investors is behind China’s deal to take over a chip spin-off from the University of Cambridge, according to corporate registration information and an equity deal notice.

UK semiconductor company Flusso, which develops flow sensor technology, announced in August 2022 that it had been jointly acquired by “a company and a global private equity fund” without naming the buyers at the time.

According to data at Companies House, a UK government website of corporate records, a vehicle called Shanghai Sierchi Enterprise Management Partnership took 100 per cent ownership of Flusso last August. The information was published on January 6 and was first reported by UK Tech News (UKTN), a news website.

Chinese corporate registry information shows that Sierchi was a new entity incorporated in Shanghai at the end of 2021 and it is 80 per cent owned by Zhenxin Equity Investment Partnership, an entity based in southeastern Fujian province. Zhenxin Equity, in turn, is a subsidiary of Baoding Investment, a Shanghai-based investment conglomerate founded in 2000 with a number of private and state-owned backers.

A staff member at Baoding, who declined to be named due to the sensitivity of the matter, told the Post on Tuesday that Baoding is the parent of Zhenxin while Sierchi is an affiliated entity. The person declined to comment on the Flusso deal.

A notice on the China Beijing Equity Exchange on December 26 showed that a 30.2 per cent stake in Shanghai Baoding is held by unidentified “other shareholders”. Among the 10 shareholders owning the remainder, Shanghai Xinmin Equity Investment Co Ltd, a private company owned by two individuals, is the largest shareholder with 27.7 per cent, while China Everbright Industries Group, a subsidiary of China’s state-owned financial conglomerate China Everbright Group, owns 19.3 per cent.

Shanghai International Group Asset Management, a subsidiary of Shanghai International Group that is under the municipal authority, has a 10.6 per cent equity stake, ranking third, followed by a private equity firm Sova Capital and state-owned Shanghai Automotive Industry Corporation.

China National Technical Import and Export Corp, a state firm, is inviting bids for its 0.6 per cent equity stake in Shanghai Baoding for a starting price of 14.1 million yuan (US$2.1 million), according to the notice on the Beijing exchange.

Shanghai Baoding says on its website that it is mainly engaged in equity and real estate investment with a particular focus on “semiconductors and related electronics”. Examples of its equity investment projects include Shanghai-based Advanced Micro-Fabrication Equipment of China, VeriSilicon Holdings, Shanghai Micro Electronics Equipment (Group) and QST Corporation, a sensor maker.

Founded in 2016, Flusso was spun out of the University of Cambridge with support from the university’s commercialisation arm. The company raised US$5.7 million in its series-A financing round in June 2020 and launched its first product, which it describes as the world’s smallest flow sensor, later that year.

It is unclear which other company participated in the purchase of Flusso by Shanghai Sierchi Enterprise Management.

According to the UKTN, Andrea De Luca, chief executive and co-founder of Flusso, said the other investor was going through an initial public offering process and chose to not to disclose its name.

The British government last November blocked the £63 million takeover of Newport Wafer Fab, the country’s largest microchip factory, by Dutch chip maker Nexperia over national security concerns. Nexperia, which is based in the Netherlands, is owned by Wingtech, a partially state-backed company listed in Shanghai. South China Morning Post