SubscribeIs China’s Tech Sector Too Hot?
BusinessWeek has published an article named “Venture Capital’s New Promised Land“. As it said, investing in China has been hotter and hotter, and is it over-heated?
For China funds, the money keeps pouring in. In 2005, they raised some $1.17 billion, up from just $325 million in 2002, according to Hong Kong-based Asian Venture Capital Journal. IDG-Accel China Growth Fund’s new China fund raised $150 million, Sequoia Capital China attracted $300 million, and JPMorgan Chase recently launched funds to invest in China. … … With so much money sloshing around, there’s bound to be trouble. Deals that were passed over by seasoned investors a year ago are now getting resurrected, a sign that the market is overheating.
I basically agree the main point of the article. After recovering from dotcom bubble, China’s tech sector shows some sign of over-optimism and hyped expectation. But so far it is still under control, people learn lessons from bubble years, so bubble 2.0 has yet appear. By communicating with some startups and bloggers, I think they share the similar opinion.
However, in 2005, when money poured into Chinese startups in the area of P2P streaming, multimedia e-magazine, blog hosting service, SNS and others, a smart investor should has clear mind on market development and make sharp investment decision.
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2 Responses to “Is China’s Tech Sector Too Hot?”
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I hate to do this… but Tangos, there is a plain grammar mistake in your first paragraph. It should have been ‘hotter and hotter’ instead of ‘more and more hot’.
Let’s turn to the point. Yes I read this article on Business Week too. If I understood it right, it called for investors to invest more in traditional industries to offset the risks they are taking by investing too much in tech sector.
I began to like Toodou. It is said Gary Wang ‘finally agreed to an investment from IDG of several hundred thousand dollars for a minority stake’. Emm, matter of fact attitude… You know there are rarely investment reported with less than $10 million. Dazzingly large investments appeared in the news every day. The numbers were usually doubled or trippled, or even timed 10.
Frankly speaking I do not quite understand the P2P streaming deals. There are too many companies providing P2P software and downloading and live show all at once… Nor do I understand some Chinese counterparts of eHarmony… Nor the investment into some indexed search companies… Maybe they will turn out great, who knows. But this time it is certainly better than the last bubble. At least people are seriously discussing how those companies are going to make money.
Let’s just wait and see, honestly.
Thanks for correct my grammar mistake, I always made many such mistakes, should pay more attention to it next time.
Yes, the article said “the best plays may lie outside of technology”, but I and my blog should focus on tech, right?
P2P streaming is somewhat over-heated, in my opinion, the same is multimedia e-magazine.