MAI Capital announced it has launched MAI Dragon Egg Fund I – a new $20 million Australian venture capital fund designed to help tech startups gain access to China’s massive market. Launched by ICD Property’s Michael Mai, the Dragon Egg Fund, which he claims is the first of its type to focus on China, will target post-seed or Pre A rounds of between $150,000 and $500,000 for tech startups in agriculture, logistics, clean technology, education, and health sectors.

The fund has received approval and is conditionally registered as an Early State Venture Capital Limited Partnership (ESVCLP) – an initiative that is part of the Australian Government’s National Innovation and Science Agenda, and that the federal government created to drive investment into the country’s venture capital space through tax concessions granted to funds that meet registration and investment structures established under the Venture Capital Act of 2002.

“We will look to invest in emerging companies that are positioned to tap into the enormous Chinese market. This offers investors the chance to invest in high growth innovative companies and provides these companies with a fast track to the world’s most populous country,” Mai told Australian Financial Review (AFR).

Mai told Startup Smart that now is a pivotal time for emerging Australian companies to look toward China for growth due to the country’s shift away from manufacturing and toward a consumption-based economy.

“China’s growing urban middle class will more than double its spending over the next 15 years, helping to lift China’s consumption as a proportion of GDP to almost 50%,” Mai told Startup Smart. “By way of comparison, that means China’s consumption in 2030 will exceed today’s GDP in the US.”

Tom Ellis, formerly with Commonwealth Bank and Bank of Melbourne, will serve as investment manager, while Artesian’s Tim Heasley will be an advisor for the fund.

“The key for this specific fund is to deploy capital intelligently,” Ellis told AFR. “We’re looking to raise capital beyond that though to help take those companies to another level, at which point the risk profile of the investments will be different,” adding, “We’re working through final due diligence on a few deals now. There is some phenomenal stuff in cleantech and agriculture where we can see a really broad application.”