This time last year, I was just returning from my first LeWeb 3 Conference in Paris, having enjoyed impromptu appearances by Shimon Peres and Nicholas Sarkozy, which made the event really memorable for me. This year however, I spent the same week in Shanghai, China attending the China Venture Capital Annual Forum. While this Conference was short on celebrity appearances by former or current Presidents, it was rich in terms of news from an impressive year in Chinese venture capital based on the first 11 months so far: 98 IPOs, $5.4B raised (55 new funds started this year), $3.2B invested in 428 deals according to the keynote address of Gavin Ni, CEO of Zero2Ipo Group. $3.2B invested reflects a six-fold growth in six years.
To get an idea of scale, I wanted to compare the numbers
from China with US, India and Europe. Estimated annualized figures are as follows (based on first 3 quarters from
Europe & India, first 2 quarters
in the US):
These numbers of course only tell part of the story. Following the conference, I visited Chinese cities like Xi’an in the middle of the country whose population exceeded 7.5M, one of 100 cities in China with a population of more than 1M. The massive scale of growth is not without its cost however. In cities with a large industrial base like Xi’an, even on a sunny day, the weather looked foggy due to an intense haze. It’s not unusual for people to wait over an hour in lines at local banks.
The most eye opening experience for me was shopping at Gome, one of China’s most popular retail chain stores, focusing mostly on electronics. I could buy an iPod clone called She for less than $40 and was shocked to find a ski jacket in an attractive color with synthetic fur for a whopping $23. It wasn’t unusual to encounter restaurants with multiple floors with rows of private rooms (people dine out and entertain quite frequently here in China). Not surprisingly, at least one third of the total VC investment in China in 2007 was directed at the Traditional / Service industries. This is one of the few places in the world, Sequoia Capital invested in a fast food retail chain according to Fan Zhang, Founding Managing Partner of Sequoia Capital China.
All in all, it has been an amazing experience to meet first hand with great entrepreneurs, bloggers, investors, VCs and angels in China. More on that to follow in the next few blogposts…
