|
Venture capitalists in China are suffering from the spread of SARS in the country, but their enthusiasm will return in the third and fourth quarters with record investment, a major domestic venture capital (VC) research firm stated yesterday.
"Owing to the impact of SARS, there will be a big decline in VC investment in this quarter," said Nan Lixin, research director with Beijing-based Zero2ipo.com Ltd.
Foreign capitalists are the most active force in the market and a slowdown in their investment will hurt the market, she explained.
An executive with US-based VC firm Walden International's Shanghai office, who declined to be named, said the outbreak of SARS had prevented company personnel from investigating projects in other cities and had delayed visits of senior executives from overseas.
"The impact on this quarter will be huge," she said.
According to the survey by Zero2ipo.com among 50 major VC firms in China, 17 firms had invested in 31 companies with a disclosed capital of US$225 million.
Foreign VCs invested in 30 companies and their investment accounted for 83 per cent of the total in the first quarter.
Domestic firms invested in 15 projects, but their investment totaled only 6.5 per cent.
Telecoms and information technology services were popular with VC investors, the Zero2ipo.com survey revealed.
Nan believed the impact of SARS would be temporary and investment volume will rise greatly in the second half of the year, if the epidemic is contained.
"With the publication of foreign VC administrative measures by the Chinese Government in December and the launch of the Zhongguancun technological property exchange in Beijing in March, venture capitalists will have more exit channels and they will seek more opportunities," said Nan.
She added only one third of the 50 most active VC firms invested in the first quarter and the others are still seeking good projects.
But the volume in the first quarter was half the total of last year and 2001, so this year might see record investment.
But York Chen, managing director and partner of Taiwan-based Acer Technology Venture Capital, took a more pessimistic view of the outlook for the year.
"We do not know when SARS will end and moreover VC, unlike other industries, does not have an investment quota to finish, so I do not think there will be a VC boom in the rest of the year," Chen said.
(China Daily May 23, 2003)
|
