Investment Updates News
- Venture capital funding expands 55 percent
Date: 15-Feb-2007 Sources: (Shenzhen Daily)
THE value of venture capital investments in China surged 55 percent in 2006, fueled by financing for consumer Internet, alternative energy and business services firms, a survey issued yesterday found.
Data for 2006 compiled by Dow Jones/VentureOne showed venture investment in Chinese companies grew to US$1.89 billion from US$1.22 billion in 2005, up from just US$363.5 million in 2002 - when venture financing there was still only a nascent phenomenon.
China overtook Britain in 2006 to become the second-largest national market for venture capital, based on VentureOne data.
'People are putting a lot more money to work in China, but keep in mind there is a lot more competition too,'said Claude Leglise, managing director of China-focused venture capital firm WI Harper, which is based in San Francisco.
Energy investments, many of which rally under the flag of 'clean technology?and include low-cost solar-panel makers or energy efficiency plays, soared 166 percent to US$212.6 million. Consumer business services rose 64 percent to US$406.2 million.
Information technology attracted the lion's share of funding, growing 34 percent to US$921 million in 2006, according to the Ernst & Young/VentureOne China Venture Capital Report.
Funding for information services, a segment within the larger technology sector that includes many Web 2.0 consumer Internet startups, leapt 87 percent to US$464.6 million. A third of China's 214 venture deals in 2006 were in this hyped sector, which typically attracts smaller deals at earlier stages.
There are important differences between the flurry of venture investments in hot Web 2.0 companies in Silicon Valley and in China.
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