China’s 147.2-billion-yuan ($20.2 billion) National Manufacturing Transformation and Upgrading Fund has bankrolled two domestic commercial aerospace companies in their $100-million-plus fundraising efforts amid the country’s growing space ambitions.
The final few days of 2024 saw the national fund inject 900 million yuan ($123.3 million) into Beijing-based reusable rocket developer LandSpace Technology Corporation.
This investment marks the single largest transaction from one investor in LandSpace since the inception of the startup in 2015, according to a December 27 WeChat post by Nanchang Industry Investment Group, LandSpace’s existing shareholder.
The funding will allow LandSpace, which counts HongShan (previously Sequoia Capital China) and MPC (previously Matrix Partners China) among its backers, to invest in the R&D, test flights, and production of its latest model of reusable liquid methane-fuelled launch vehicle Zhuque-3. The maiden flight of this two-stage, medium-to-heavy launch vehicle is planned for 2025.
Through its Guokai Manufacturing Transformation and Upgrading Fund, the national manufacturing fund also invested in Shanghai Gesi Aerospace Technology, a Shanghai-based satellite manufacturer also known as “Genesat,” in the startup’s Series A+ funding round.
Genesat raised over 1 billion yuan ($137 million) in the deal that also saw the participation of state-backed Guokai Science and Technology Innovation Investment, Guosheng Capital, and SIMIC Capital, among others.
While Genesat did not specify how it plans to use the proceeds, the startup’s primary mission is to develop and manufacture satellites for the Thousand Sails project, or the Qianfan constellation. It is a proposed mega constellation of communication satellites to deliver high-speed internet services to the globe — China’s answer to SpaceX’s Starlink satellites.
The two mega deals underscore the government’s commitment to advancing the development of domestic commercial aerospace — a market that is estimated to have crossed 2.3 trillion yuan ($315.1 billion) in 2024. The market has sustained an average annual growth rate of over 20% in 2017-2024, according to data from the China Astronautics Association for Quality (CAAQ), a non-profit industry organisation.
Commercial aerospace is one of the focused industries for the National Manufacturing Transformation and Upgrading Fund, which was launched in November 2019 to primarily invest in growth- and mature-stage companies across new energy, new-generation IT, and electronic equipment.
China’s Ministry of Finance, China Development Bank Capital, China Tobacco, and other state-owned enterprises are some of the most deep-pocketed shareholders of the national manufacturing fund.
In 2020, the fund financed the launch of the 50.1-billion-yuan ($6.9 billion) Guokai Manufacturing Transformation and Upgrading Fund, which is under the management of CDB Investment and Development Fund Management, a subsidiary of China Development Bank Capital.
