Venture capitalists opened the spigot on China in the fourth quarter of 2014, ousting the previous record of total annual investment.
Investors poured $ 15.5 billion in deals during the year, more than double the previous record of $ 7.3 billion set in 2011 and the highest amount since VentureSource began collecting data on China in 2006. Dow Jones VentureSource is a base data from Dow Jones & Co., which is owned by News Corp.
Underlying the increase is a boom in the use of mobile devices. For the first time, more Chinese access the Internet through mobile devices than through PCs last year, the Information Center of China Internet Network in July. The panel of state participation estimated the number of mobile shoppers 205 million in June 2014, an increase of 42% from December 2013.
Hans Tung, managing partner of GGV Capital, a venture firm focused on China and the US, said the increasing spread of smartphones and mobile devices in China spurred innovation in 2014, attracting more than venture capital. "We have to be born a lot of new products, new applications and hardware developed," he said. "There is a lot of demand for new services."
Consumer-focused companies dominated raising capital in the fourth quarter, accounting for all five best bid. The largest transaction was $ 1,100 million for financing Xiaomi, a manufacturer of smart phones and electronic devices. Xiaomi After the next two rounds were most important for companies that provide taxi-booking service. Xiaoju Beijing Technology Co. raised $ 700 million and Hangzhou KuaiZhi Technology Co. raised $ 600 million.
For the quarter, investors injected $ 6.8 billion in venture-backed companies in China, an increase of almost five times from the $ 1.4 billion invested in the same period last year, according to VentureSource. The number of closed transactions increased 79% to 243 from 136 in the same period of 2013.
Mr Tung, who was an early investor in Xiaomi, said he hoped that the focus on mobile services to continue next year. "More traditional industries such as retail trade will be affected," he said. "The figures do not grow until next year, but there will be a continuing shift from offline to online."
He said, however, that many in the industry see the reviews to be too high. "What if the bubble bursts in 2015? My guess is that winners of each category will still be able to raise funds, even for a lower valuation," he said.
Despite the large round raised by consumer companies such as Xiaomi as large tablespoons of capital did not influence both the total US market, where investments in the likes of walk-service company Uber Technologies Inc. company room rental Inc Airbnb. have meant increasing the level of investment spread over fewer deals.
In China, the median round size $ 9,800,000 for the year was much higher than the number of the previous two years, but found a figure of $ 10 million for 2011.
Increased risk investment came as IPOs resumed after the market close for over a year while it was overhauled, offering better prospects for investors cashing out successful companies.
"Part of the reason 2014 was significantly stronger than the 2013 is that the government relaxed its control over OPI" said Benjamin lavender, director of China Market Research Group in Shanghai.
There are 61 IPOs backed venture in 2014, a jump of 15 in 2013, but still well below 100 in 2011 and 141 in 2010. The value of these IPOs last year was $ 7.2 billion, the highest in three years, but still well below between 2011 and 2010, when markets were flooded with ads, sometimes companies with weak finances and governance.
The largest IPO in the fourth quarter was Huadian Heavy Industries Co., a supplier of material handling equipment in November. The company raised $ 244.65 million in its listing in Shanghai.
Based venture companies in China raised $ 4,200 million during the year, according to VentureSource, the highest amount in three years. In general, raising private equity funds reached a record $ 47,000,000,000, beating a previous record of $ 46 billion recorded in 2011.