First-half Venture Funding of Chinese Companies up 85%
While China’s athletes continue to collect gold medals in the Olympic Games, the host country’s venture capitalists are busy with their own quests for gold, reports Dow Jones Venture Wire.
The amount of venture capital fueling companies in China surged 85% in the first half of 2008, thanks partly to large injections of capital into mature Internet concerns.
Venture firms invested $2.15 billion in mainland China companies during the six-month period, up from $1.16 billion a year earlier, according to data released today by Dow Jones VentureSource.
A $430 million investment in Internet conglomerate Oak Pacific Interactive fattened the latest amount, but even excluding that deal, investment still rose 48%. Of the six largest deals of the second quarter worth more than $30 million, four including Oak Pacific were late-stage Internet companies. The others were Tudou.com ($57 million), 51.com ($51 million) and Leyou.com ($35 million).
While the overall amount invested rose significantly in the first half, the number of deals dropped to 116 from 123, continuing a trend of the past few quarters. Venture capital firms are simply placing larger bets in more mature companies while remaining highly selective with their early-stage investments.
Eighty deals, or 69% of the first-half total, involved companies “shipping product,” while another 30, or 26%, deal with profitable companies, according to VentureSource. Those companies were funded with $2.11 billion. Only $42.3 million went into six companies in product development, while no companies getting off the ground received capital.
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