Why is VC Funding for IT in China Going Away?
Filed in archive Internet on December 10, 2007
The Shanghai Daily recently reported that venture capital investment in Internet technology was "fading." The winner? More traditional industries like energy, healthcare, education, and consumer services.
The Shanghai Daily article was based in part on a Zero2IPO report that shows record high venture capital and private equity investment in China during the first 11 months of the year.
Why is VC funding for IT in China going away? The China Law Blog had a post in November that looked at changes in the new Catalog for the Guidance of Foreign Invested Enterprises. Among the changes in the new Catalog, some types of Internet businesses have been added to the "prohibited" category for foreign investment.
It's not like VC investment in the Internet technology sector has just gone away, though. As recently as yesterday we reported on foreign private equity investment in the Chinese website 56.com. But IT deals fell from about 60% of VC funding a year ago to just over 45% now.
Tags: Venture capital IT information services China china venture+capital
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