Reuters reports that China's internet sector has seen a dramatic fall in venture capital investment. According to the article, Chinese Internet companies raised $138.5 million in the first quarter of 2012, compared to a whopping $866.5 million invested in the same quarter last year, a decline of 84% (data from Thomson Reuters). Last year, China's internet sector received $3.6 billion in venture investment, over double the $1.7 billion invested in 2010.
The article cites several reasons for the decline in venture investment in the Chinese Internet sector include a general pull-back from an overheated sector, recent accounting scandals involving Chinese firms listed on US stock exchanges, tougher US listing requirements for Chinese firms, poor market performance of recent listings, and a shifting towards newer sectors.
I was recently in China meeting with venture capital firms, and the sense that I had was that there was a general cooling attitude towards venture capital investing in Chinese tech companies. In addition to the factors cited above, a common reason that I heard was that liquidity in general (IPOs and M&A) was proving more difficult and taking longer than expected.
It's a good article and worth a read. Here's the link:
http://www.reuters.com/article/2012/04/23/net-us-dealtalk-china-internet-idUSBRE83M0AY20120423
The article cites several reasons for the decline in venture investment in the Chinese Internet sector include a general pull-back from an overheated sector, recent accounting scandals involving Chinese firms listed on US stock exchanges, tougher US listing requirements for Chinese firms, poor market performance of recent listings, and a shifting towards newer sectors.
I was recently in China meeting with venture capital firms, and the sense that I had was that there was a general cooling attitude towards venture capital investing in Chinese tech companies. In addition to the factors cited above, a common reason that I heard was that liquidity in general (IPOs and M&A) was proving more difficult and taking longer than expected.
It's a good article and worth a read. Here's the link:
http://www.reuters.com/article/2012/04/23/net-us-dealtalk-china-internet-idUSBRE83M0AY20120423
