Venture Capital Funds Rush to China
Qiming Venture Partners is one of the many venture capital funds rushing to invest in the Chinese market with a new $450 million fund and plans to raise an additional $108 million fund. However, many analysts are warning that the China venture areas is getting overheated and is bound to bottom out again in a few years.
Even venture fund managers admit that some of the multiples being applied to ecommerce companies in particular will require the companies to grow significantly to justify them. In the social networking space there is an increasing awareness by investors that they need to pay close attention to the quality of revenue and operations at a given company, and not just their end user numbers. However, they always point to the long term value of being a leader in China to justify the sky-high valuations, although it may be a rocky road to get to their.