Today, NetDragon Websoft Inc. (0777.HK), a leading online game company in China and the owner company of the leading iPhone/Android app store – Panda Space, together with IDGVC announced a $50millions fund (named mFund) to invest Chinese mobile application development market.

Liu Luyuan, CEO of NetDragon, said in the press conference, mFund will not only support the development teams with capital, but also the development engine, technology support, marketing as well as business development in global market.

This is another exciting news for Chinese startups in mobile market. In a dinner with Joe Wu, CFO of Netdragon a few weeks ago, he told me that, its 91 Assistant, the PC client of its app store Panda Space has been downloaded over 1.2billions times in total. Its 91 Assistant and Panda Space take 80-90% Chinese iPhone market and ~60% Android market. Its 91.com is also the leading portal for mobile industry news, apps etc with millions of pv per day. So basically, mFund means Netdragon can send you the money for development as well as great exposure and millions of downloads.

This may hugely boost Chinese local app development market. However, the partnership may also kill some other local app stores and obviously it gives developer(s) much more attractive offer. Of course, how much share they want from the companies invested is also a question to be answered in next a few months. Given the strong market position for both NetDragon and IDGVC, I guess for startups, the negotiation would not be that easy.