Japan's largest venture capitalist JAFCO will invest in up to
five more mainland companies this and next month after its latest
deal with video-sharing website Tootou.com, a senior executive
said.
"We plan to make seven or eight investments in the first half of
the year, involving a total of US$30 million," Vincent Chan,
managing director of JAFCO Asia, who is in charge of the firm's
North Asia business, told China Daily.
JAFCO's most recent investment was earlier this month when it
teamed up with venture capitalist (VC) Granite Global Ventures to
invest a combined US$8.5 million in Tootou.com. Before that, it
acquired mobile advertising agent Madhouse and TV advertising firm
Cgen Digital Media Network.
The flurry of investments reflects the increasing interest of
foreign venture capital firms in accessing the mainland's thriving
economy ahead of the first batch of third-generation (3G) licences
being issued.
Venture capital going to the mainland is on the rise after a
lull in 2004 and is expected to reach US$1.5 billion this year, an
increase of nearly 50 percent year-on-year.
In March, Chan said he now spends 90 percent of his time
traveling on the mainland seeking business opportunities and this
year is likely to invest in more than 10 projects on the
mainland.
JAFCO invested between US$2 million and US$8 million in each
project.
As the mainland drives its economy by boosting consumption,
opportunities crop up within the consumer sector, Chan said, adding
that he plans to invest in those markets with part of the US$168
million in funds JAFCO raised in March.
"Half of the mainlanders' income will go to consumer sectors. We
hope to ride the spending wave," he said.
Previously, the company largely invested in tech players. Its
successful investments on the mainland include search website
3721.com and wireless solution provider China Wireless.
Commenting on the exit mechanism, Chan said he hoped the
mainland's authorities would do more to diversify exit channels for
foreign VCs.
(China Daily May 19, 2006)