Venture Capital Continues To Heat Up

The famous venture capital professional research and consulting company, the latest survey report of China's venture capital in the first quarter of 2004, released by Qing Ke company, revealed that after a substantial increase in investment in 2003, China's venture capital continued to be brilliant in the first quarter of 2004: a total of 35 Chinese and foreign venture capitalists invested in 33 Mainland and mainland related enterprises in the survey area, with a total investment of $216 million and a substantial increase compared with the fourth quarter of 2003.

Although the number of investment enterprises and investment amount is less than that of the same period in 2003, the investment vitality index of the first quarter has reached 108.33, the highest in 2003, despite the increase in the number of investment enterprises and the number of foreign-invested venture capital institutions.

In the broad sense of IT, the Internet continues to heat up, and despite the fact that investment is still concentrated in the field of generalized IT, the revival of the Internet industry has led to partial changes in the structure of the investment industry.

According to the survey, the industries with the largest investment in the first quarter were: Internet, telecommunications / telecommunications, IC, software and traditional industries. Among them, the Internet industry gained nearly 50% of its total investment (mainly from four funds from Softbank, Japan, which injected huge amounts of money into the Alibaba for $8200).

From the perspective of investment volume, the most popular industries are communication / telecommunications, IC, Internet, traditional industries and biomedicine, of which 7 telecom / Telecom start-ups have successfully financing.

As the growth of broadband subscribers and the further development and integration of telecom networks and the Internet, broadband applications, mobile Internet and other data services will receive more attention in 2004.

In the first quarter, the performance of the two types of investors in mainland and foreign investment is very similar to that in the first quarter of 2003. The investment volume of the two types of investment institutions in China and foreign countries is roughly the same, but in terms of investment volume, foreign venture capital institutions are far ahead.

Local venture capital invested a total of 14 enterprises in the first quarter with a total investment of US $21 million 750 thousand, and foreign venture capital institutions invested 16 enterprises in the first quarter, with a total investment of US $185 million.

In the industry orientation of investment, foreign investment is still concentrated in the broad sense of IT. The investment of local venture capital is still relatively scattered, but the investment in the broad sense IT area has increased, reflecting the adjustment of investment strategies by local organizations at the time when the industrial situation is improving.

In terms of investment behavior, joint investment is still the main feature of investment behavior of foreign venture capital institutions, while the characteristics of local venture capital holding companies are not outstanding in the first quarter.

The withdrawal of IPO continued to be active in the fourth quarter of 2003. A total of 12 Chinese and foreign venture capitalists successfully withdrew from the 11 projects, with a total withdrawal of 41 million 740 thousand USD.

A total of 3 VC supported enterprises were listed in the first quarter. A total of 5 investments in the survey area were withdrawn or partially withdrawn through these 3 IPO.

The research center of the Qing Ke Ke Venture Investment Research Center believes that the recovery of industry and the recovery of capital market have created favorable external conditions for the withdrawal of venture capital institutions. Meanwhile, the backlog caused by the low tide of the industry has also led a considerable number of organizations to quit as the focus of work in 2004. These two factors will have a positive impact on the withdrawal of the whole year in 2004.