In spite of flows into emerging markets, investors retain caution over China according to a survey of 205 fund managers by Bank of America. The percentage of regional investors who expect the Chinese economy to improve has risen from 6 percent, but is still low at 10 percent. The proportion of respondents who expect Chinese growth to slow in the next 12 months has fallen to 70 percent from 79 percent in December.
Forty-three venture capital funds raised $3.4 billion in the fourth quarter of 2008, according to Thomson Reuters and the National Venture Capital Association (NVCA). This level represented a significant decline from both the previous quarter ($8.4 billion) and the same quarter in 2007 ($11.7 billion). For the full-year period, fundraising totaled $28.0 billion from 211 funds, a 21.4% decrease in volume from 2007.
Venture capitalists continue to invest in Mainland China with $964 million put into 59 deals during the third quarter, up 22% from the $790 million invested in 73 deals during the same period last year, according to new regional statistics from Dow Jones VentureSource. Through the first nine months of 2008, China-based companies have raised $3.29 billion in venture capital, more than the previous annual record of $2.88 billion set in 2001.
CERNET Koncept Ltd., the holder of exclusive rights to provide digital media services and advertising to China’s university students, have recently closed a US $6.5 million Series A round with Sequoia.
PepsiCo, one of the world's largest food and beverage companies, announced today that it plans to invest U.S. $1 billion in China over the next four years.
PepsiCo's investment in China will fund a variety of major capital programs to expand manufacturing capacity, particularly in second and third tier cities in the interior and western areas. The investment also will be used to expand local research and development facilities and build the company's sales force to broaden product distribution. It also will fund brand-building initiatives as well as development of new products tailored to Chinese consumers.
Chinese search engine Baidu.com, Inc. (Nasdaq: BIDU), today announced that its board of directors has approved a share repurchase plan to repurchase up to US$200 million worth of its own American Depositary Shares by the end of 2009.
The China Venture Capitalist Confidence Index (Bloomberg symbol: CVCCI) for the third quarter of 2008 registered 3.25 on a 5 point scale, falling from last quarter's measure of 3.54, to the lowest reading in the 3.5 year history of the Index. This suggests that the global economic slowdown are now also straining the confidence that venture capitalists have in the high-growth entrepreneurial environment in China. This trend is consistent with declining sentiment in Silicon Valley where VC confidence also just marked a multi-year low.
Zapak Digital Entertainment, an Indian online gaming company, and part of the Reliance ADA Group Venture, today launched their first gaming portal for the international markets - Zapakworld.com. Zapakworld.com is currently available in Spanish, French, Russia, Portuguese, English and Hindi.
After a record high level in Q2, fundraising in China's venture capital market was reduced sharply during Q3. A total of 17 domestic and foreign VC firms established 20 venture capital funds during Q3 2008. The number of new funds was only half of that in the last quarter, and the amount of raised capital was reduced by 83.7%. This figure represents only US$492.2 million of new capital available for investing in mainland China.