In­vestors are op­ti­mistic about fu­ture tech­nol­ogy

China Daily European Weekly - - BUSINESS - By CHENG YU [email protected]­

In­vestors say they re­main op­ti­mistic that tech break­throughs and en­trepreneur­ship will help open new mar­kets, de­spite a slow­down in fund­ing dubbed “cap­i­tal win­ter” in China.

“There must be a cy­cle in the econ­omy. His­tor­i­cally, in­vest­ment and en­trepreneur­ship would see their best chances amid some big chal­lenges,” said Kaifu Lee, founder and CEO of the tech ven­ture cap­i­tal firm Si­no­va­tion Ven­tures. “Only those who have ideas, pas­sion and abil­ity will start a busi­ness.”

His words came as China has seen a slow­down in fundrais­ing for ven­ture cap­i­tal and pri­vate eq­uity firms. In the first 11 months of this year, to­tal fundrais­ing was 1.15 tril­lion yuan ($167 bil­lion; 147 bil­lion eu­ros; £133 bil­lion), down 28.7 per­cent year-onyear, ac­cord­ing to the lat­est re­port by Zero2IPO Re­search, a lead­ing ven­ture cap­i­tal and pri­vate eq­uity re­search in­sti­tu­tion.

De­spite the drop, Lee, the for­mer head of Google in China, said he re­mained up­beat, say­ing the firm’s fourth round of US dol­lar-de­nom­i­nated fund­ing and third round of yuan-de­nom­i­nated fund­ing had al­ready flowed to nearly 20 projects.

“We are very op­ti­mistic about the fu­ture. Ven­ture cap­i­tal will show its ad­van­tages dur­ing such a win­ter, es­pe­cially in how it can use tech­nolo­gies to en­able tra­di­tional in­dus­tries in the cur­rent tech­nol­ogy-driven era,” he said.

Lee made the com­ments at Si­no­va­tion Ven­tures, where its top ex­ec­u­tives shared their views about po­ten­tial in­vest­ment trends in China next year.

“The Chi­nese econ­omy, un­like many oth­ers in the world, is di­ver­si­fied, as epit­o­mized by the top-tier cities en­coun­ter­ing some chal­lenges, while sec­ond- and third-tier cities gain growth mo­men­tum,” said Wang Hua, man­ag­ing part­ner of Si­no­va­tion Ven­tures.

For in­stance, he noted, mo­bile pay­ments have al­ready been pop­u­lar for more than three years in top­tier cities such as Bei­jing, Shang­hai and Guangzhou, while in fourt­hand fifth-tier cities, many older peo­ple are only just now be­gin­ning to adopt tech­nol­ogy and shop on­line.

“It is part of the rea­son that Chi­nese on­line group dis­counter Pin­duo­duo can still gain pop­u­lar­ity, even though Alibaba’s Taobao and JD were launched quite a long time ago,” Wang said. “It is like a magic cube. Dif­fer­ent phases will bring dif­fer­ent chances. Epoch-mak­ing op­por­tu­ni­ties will con­tinue to burst out in the Chi­nese mar­ket.”

Ar­ti­fi­cial in­tel­li­gence au­to­ma­tion, con­sump­tion up­grades in smaller cities, as well as in the over­seas mar­ket, will be the next in­vest­ment hot­beds, he pre­dicted.

Wang noted that ar­ti­fi­cial in­tel­li­gence, on the other side, has moved from tech­nol­ogy to ap­pli­ca­tion in the coun­try, and all kinds of in­dus­tries are ac­cel­er­at­ing AI ap­pli­ca­tions.

Kaifu Lee, founder and CEO of Si­no­va­tion Ven­tures

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