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China Sees New Round of Venture Capital Spree(Comtex Business)BEIJING, Dec 15, 2005 (SinoCast China IT Watch via COMTEX) --Venture capital firms have quickened their paces of investment in China's fast-growing sectors, including the Internet, semiconductors and new applications for mobile phones and televisions. Among them, Sequoia Capital China, which poured cash into Semiconductor Manufacturing International Corp and 3721.com, has established a USD 180 million fund to invest in Chinese high- tech industries, Steven Ji, a Sequoia vice president, said during the China Technology, Media, Telecom Industry Annual Summit 2005 in Shanghai on December 12. Meanwhile, Granite Global Ventures, which invested in Alibaba.com Inc, said it has increased its global fund from USD 400 to USD 700 million, and half of that is earmarked for China, according to Jenny Lee, Granite's Shanghai-based director. HSBC Private Equity (Asia) Ltd has established a USD 100 million technology fund in Asia, mainly to tap online games and chip design. "It's our second technology fund in the region, and we have used up the first fund volume of USD 55 million," said Victor Leung, the firm's associate director. The HSBC fund earlier invested in Shanghai-based chip designer Actions Semiconductor Co, which issued an initial public offering on Nasdaq last month to raise about USD 80 million. The success of Internet-based companies like Baidu and Alibaba has boosted the confidence of overseas investors, and many have flooded into China to seek opportunities, hoping to cash in through mergers and IPOs, said Sun Lilin, an analyst at the consulting firm Analysys International, the organizer of the summit. Venture capital investment in China is expected to reach USD 2 billion this year, compared with USD 700 million last year, according to zeor2ipo, also a consulting firm. "Online search, cyber advertising and e-commerce will bring solid profit to investors in 2006, and new applications, such as electronic maps, online dating and blogs, have to figure out how to cash in during the coming years," Sun said. IT giants have also joined the venture capital wave. In June, Intel launched a USD 200 million fund in China to invest in cellular communications, broadband applications for consumers and semiconductor design. Lenovo, IBM, Cisco Systems and Acer also have set up venture capital divisions or funds in China's mainland. During the third quarter of 2005, the volume of venture capital of China continued to grow by leaps and bounds, hitting the highest point since early 2004. Total 62 companies in China's mainland received USD 372 million investment from venture capital firms in the third quarter this year, an increase of 54.6 percent from the previous quarter, and two times that one year ago. In addition, the number of companies that got venture capitals increased 34.8 percent, up 21.6 percent from the comparable period a year earlier. During the third quarter, information technology (IT) industry for China was still in the limelight. There were 44 Chinese IT companies got USD 276 million venture capital, accounting for 74 percent of the total. And most of the venture capitals go to Internet, IC and telecom industries in the third quarter. There were 18 Chinese Internet companies received USD 113 million venture capitals, reaching its history record. From eWeek, Page 1, Wednesday, December 14, 2005 [email protected] |