China Venture News
Is the Canary Dead for Venture Capital?
TechCrunch ran a piece today on the ratio funds raised to invests with vs. economic value created by venture capital firms (measured by what VC companies have gotten back on exiting their investments).
They were looking at a recent presentation at Harvard Business School by Adeo Ressi the founder of the VC-rating site theFunded. Ressi's conclusion is that the VC model is broken. Ressi says that "the money going into VC funds is now more than the money coming out of VC funds." The first slide of his Harvard presentation puts it more bluntly: the canary is dead. Since I live in an area where coal mining takes place, I understand that figure of speech.
Ressi's 18-slide presentation is embedded at TechCrunch.
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They were looking at a recent presentation at Harvard Business School by Adeo Ressi the founder of the VC-rating site theFunded. Ressi's conclusion is that the VC model is broken. Ressi says that "the money going into VC funds is now more than the money coming out of VC funds." The first slide of his Harvard presentation puts it more bluntly: the canary is dead. Since I live in an area where coal mining takes place, I understand that figure of speech.
Ressi's 18-slide presentation is embedded at TechCrunch.
Photo courtesy of iStockphoto, Vinicius Ramalho Tupinamba
See full article.
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Revolution Ventures Moving Into Beijing
U.S. venture capital fund Revolution Ventures plans to open a Beijing office "soon," according to Reuters.
The VC company wants to focus on the education and learning sectors in China and India, according to a company partner. Education in Asia has become a hot property for VC and PE firms because it's seen as recession proof by many analysts.
Revolution Ventures probably want confine itself solely to the education sector. The firm said ti will also dabble in entertainment, gaming, digital advertising and wireless sectors in the region.
Photo courtesy of iStockphoto, David Pedre
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The VC company wants to focus on the education and learning sectors in China and India, according to a company partner. Education in Asia has become a hot property for VC and PE firms because it's seen as recession proof by many analysts.
Revolution Ventures probably want confine itself solely to the education sector. The firm said ti will also dabble in entertainment, gaming, digital advertising and wireless sectors in the region.
Photo courtesy of iStockphoto, David Pedre
See full article.
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Beijing's Stimulus Package a Flop?
The $586 billion stimulus package Beijing announced Sunday was a flop with the markets, at least. Seeking Alpha estimates that the effect of the stimulus package on the stock markets in China "lasted...err...about 12 hours."
After one day of stock market celebration in China, the bears are back in Shanghai and Hong Kong (as well as other markets). The FTSE was down today by 3.57%. Stocks in Singapore were down 4.14%. And Germany's DAX was down 5.25%
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After one day of stock market celebration in China, the bears are back in Shanghai and Hong Kong (as well as other markets). The FTSE was down today by 3.57%. Stocks in Singapore were down 4.14%. And Germany's DAX was down 5.25%
Photo courtesy of iStockphoto, Alex Slobodkin
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Pudong Will Get Its Own VC Firm
China Economic Review is reporting that Shanghai's Pudong district is going to get its own venture capital firm.
A government sponsored investment fund worth almost $300 million is going to focus on Pudong, with an emphasis on "fast-growing areas such as IT, modernized manufacturing and new energy." The planned fund will be created by the Shanghai Pudong Science and Technology Investment Co (backed by the City of Shanghai) and will be managed by Softbank China Venture Capital (part of Japan's Softbank Corp).
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A government sponsored investment fund worth almost $300 million is going to focus on Pudong, with an emphasis on "fast-growing areas such as IT, modernized manufacturing and new energy." The planned fund will be created by the Shanghai Pudong Science and Technology Investment Co (backed by the City of Shanghai) and will be managed by Softbank China Venture Capital (part of Japan's Softbank Corp).
Photo courtesy of iStockphoto, David Pedre
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PE Firms Invest Heavily in Education in Asia
PEHub reported last week on the growing investment in education that private equity firms seem to be making in Asia.
Because of the value that Asian society places on education, the sector is seen by many PE firms as recession-proof. British PE firm Actis was the lead investor in a $103 million deal with China's Ambow Education last month. South Korean PE firm The Riverside Co also invested in education this year when it spent $15 million to become the top shareholder in a preschool company called Wiz-Korea.
The PEHub article looks at a number of recent PE investments in education in Asia.
Photo courtesy of iStockphoto, Wendy Shiao
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Because of the value that Asian society places on education, the sector is seen by many PE firms as recession-proof. British PE firm Actis was the lead investor in a $103 million deal with China's Ambow Education last month. South Korean PE firm The Riverside Co also invested in education this year when it spent $15 million to become the top shareholder in a preschool company called Wiz-Korea.
The PEHub article looks at a number of recent PE investments in education in Asia.
Photo courtesy of iStockphoto, Wendy Shiao
See full article.
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China Unveils Stimulus Package
A number of news sources (International Herald Tribune, Bloomberg, the WSJ) are reporting that China has unveiled $586 billion stimulus package that it hopes will bolster domestic demand and help avert a global recession.
This from the Wall Street Journal:Though the two-year package appeared to include some previously announced measures, its size was clearly designed to revive the fading confidence of Chinese businesses and consumers, and impress foreign governments.The WSJ went on to say that the plan includes spending in housing, infrastructure, agriculture, health care and social welfare, and features a tax deduction for capital spending by companies.
Asian stocks rallied in response to the plan.
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This from the Wall Street Journal:Though the two-year package appeared to include some previously announced measures, its size was clearly designed to revive the fading confidence of Chinese businesses and consumers, and impress foreign governments.The WSJ went on to say that the plan includes spending in housing, infrastructure, agriculture, health care and social welfare, and features a tax deduction for capital spending by companies.
Asian stocks rallied in response to the plan.
Photo courtesy of iStockphoto, Kyle Maass
See full article.
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Apax Partners to Open Shanghai Office
A number of news sources (Reuters, Xinhua) are reporting that Apax Partners plans to open an office in Shanghai by the end of the year.
The Shanghai office would be the Private Equity firms first office in China.
According to Wikipedia, Apax Partners is "one of the oldest and largest private equity firms operating on an international basis, ranked the seventh largest private equity firm globally." They have nine offices now - in New York, London, Hong Kong, Mumbai, Tel-Aviv, Madrid, Stockholm, Milan and Munich.
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The Shanghai office would be the Private Equity firms first office in China.
According to Wikipedia, Apax Partners is "one of the oldest and largest private equity firms operating on an international basis, ranked the seventh largest private equity firm globally." They have nine offices now - in New York, London, Hong Kong, Mumbai, Tel-Aviv, Madrid, Stockholm, Milan and Munich.
Photo courtesy of iStockphoto, Izabela Habur
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Obama on China
"The basic framework of U.S. policy under an Obama administration will not fundamentally change," said Cui Liru, president of the China Institute of Contemporary International Relations, in Beijing today (according to Huffington Post writer Michael Standaert.
There's been a lot said about what an Obama Presidency would mean to U.S. China relations - particularly for our economic ties. Obama has at times sounded like a protectionist, willing to break ties with China and insulate the U.S. economy. He wants to see the Chinese currency, the yuan renminbi floated more freely and allowed to strengthen to something closer to its real value on world markets. But that alone is not protectionism; even the Bush Administration wanted that. Will Obama be more confrontational in his approach to China on the issue? Will he create tariffs for Chinese goods?
A number of writers, Standaert among them, have pointed out how much China and the U.S. have in common - like their desire to solve the current global financial crisis. Jocelyn Eikenburg (The Wu Way points out Obama's reputation for pragmatism and quotes Chinese sources as saying: "China is not a friend, nor an enemy. The Chinese are competitors."
I expect the same tensions that existed in U.S.-China relations under the Bush Administration to continue under President Obama. And my guess is that the new President will redouble some of the U.S. efforts for a more realistic currency exchange rate. But I personally don't expect things to change much...
© IowaPolitics.com
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There's been a lot said about what an Obama Presidency would mean to U.S. China relations - particularly for our economic ties. Obama has at times sounded like a protectionist, willing to break ties with China and insulate the U.S. economy. He wants to see the Chinese currency, the yuan renminbi floated more freely and allowed to strengthen to something closer to its real value on world markets. But that alone is not protectionism; even the Bush Administration wanted that. Will Obama be more confrontational in his approach to China on the issue? Will he create tariffs for Chinese goods?
A number of writers, Standaert among them, have pointed out how much China and the U.S. have in common - like their desire to solve the current global financial crisis. Jocelyn Eikenburg (The Wu Way points out Obama's reputation for pragmatism and quotes Chinese sources as saying: "China is not a friend, nor an enemy. The Chinese are competitors."
I expect the same tensions that existed in U.S.-China relations under the Bush Administration to continue under President Obama. And my guess is that the new President will redouble some of the U.S. efforts for a more realistic currency exchange rate. But I personally don't expect things to change much...
© IowaPolitics.com
See full article.
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Intel Capital Invests in Three Chinese Companies
Last week Intel Capital invested in three different Chinese companies, according to Reuters.
Intel Capital is the investment arm of Intel Corp. According to Reuters, Intel Capital invested $20 million in Trony Solar Holdings Co and also "took undisclosed stakes in electricity storage specialist NP Holdings Ltd, and Viewhigh, a healthcare software firm."
Intel's Asia Pacific head, Cadol Cheung, told Reuters that the investment firm's new $500 million China technology fund had now invested in six mainland companies. About a third of Intel Capital's total investment is located in Asia.
Photo courtesy of iStockphoto, Alexander Hafemann
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Intel Capital is the investment arm of Intel Corp. According to Reuters, Intel Capital invested $20 million in Trony Solar Holdings Co and also "took undisclosed stakes in electricity storage specialist NP Holdings Ltd, and Viewhigh, a healthcare software firm."
Intel's Asia Pacific head, Cadol Cheung, told Reuters that the investment firm's new $500 million China technology fund had now invested in six mainland companies. About a third of Intel Capital's total investment is located in Asia.
Photo courtesy of iStockphoto, Alexander Hafemann
See full article.
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Southern China Losing Jobs
A recent report by Asia Pacific News says that at least 2.7 million factory workers in southern China could lose their jobs as the global economic crisis hits demand for electronics, toys and clothes.
The article says that there are 45,000 factories in Guangzhou, Dongguan, and Shenzhen and that 9,000 factories in those three cities alone are expected to close before the Chinese New Year in late January. Small and medium sized companies are being especially hard hit. But large manufacturers are not immune from layoff, according to the news report.
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The article says that there are 45,000 factories in Guangzhou, Dongguan, and Shenzhen and that 9,000 factories in those three cities alone are expected to close before the Chinese New Year in late January. Small and medium sized companies are being especially hard hit. But large manufacturers are not immune from layoff, according to the news report.
Photo courtesy of iStockphoto, Bartlomiej Magierowski
See full article.
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Actis Puts $168 Million into 7 Dasy Inn, Ambow Education
TRENDSnIFF reported Friday that UK private equity inverstor Actis is leading an investment push into two China companies: 7 Days Inn and Ambow Education.
Other investors involved in the two deals include Warburg Pincus. Actis and Warburg Pincus announced a US$65 million investment in China's 7 Days Inn Group earlier this month. Actis joins Warburg Pincus, Merrill Lynch, and Deutsche Bank as stake holders in Shenzhen-based 7 Days Inn. The company is the 5th biggest budget hotel chain in China.
Actis also joined existing investors Avenue and Macquarie Group in having a stake in Ambow Education. That investment deal totaled $103 million for the Beijing-based education company. In October 2007, Ambow raised $54 million venture capital from Avenue, CID Capital, Cisco Systems and Macquarie Group.
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Other investors involved in the two deals include Warburg Pincus. Actis and Warburg Pincus announced a US$65 million investment in China's 7 Days Inn Group earlier this month. Actis joins Warburg Pincus, Merrill Lynch, and Deutsche Bank as stake holders in Shenzhen-based 7 Days Inn. The company is the 5th biggest budget hotel chain in China.
Actis also joined existing investors Avenue and Macquarie Group in having a stake in Ambow Education. That investment deal totaled $103 million for the Beijing-based education company. In October 2007, Ambow raised $54 million venture capital from Avenue, CID Capital, Cisco Systems and Macquarie Group.
Photo courtesy of iStockphoto, David Pedre
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