http://www.globaltimes.cn TUESDAY JULY 30, 2019
BUSINESS
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Address: The Global Times English Edition, 2 Jintai Xilu, Chaoyang District, Beijing 100026By Chu DayeChinese venture capital (VC) funds are
focusing on Southeast Asian markets,
with investment in start-ups in the re-
gion up 350 percent year-on-year in the
first half of 2019.
Chinese funds invested $667 mil-
lion in Southeast Asian start-ups in the
first half, the China Fund newspaper
reported on Monday.
The surge came as protectionist
headwinds in the US dampened Chi-
nese VC investor sentiment.
Chinese VC investment has been
building up in Southeast Asia in the
past three years. According to indus-
try portal chinaventure.com.cn, out of
the $26.29 billion received by start-up
firms in the region, about half came
from Chinese VC funds.
“After China and India, Southeast
Asia has become the battlefield for Chi-
nese-led VC funds,” an employee from
an internet company who is familiar
with VC investment told the Global
Times.
“A higher per capita return on in-
vestment than India combined with ayoung demographic like India make up
the picture VC investors see in South-
east Asia,” said the person, who only
gave his name as Richard.
Chinese VC funds see the region’s
350 million online users in Singapore,
Malaysia, the Philippines, Indonesia,
Thailand and Vietnam as an attractive
market to be tapped, according to the
China Fund report. Sectors such as ar-
tificial intelligence, fintech, blockchain,
and healthcare and medical services are
seen as having the most potential.
Investment houses including Gobi
Partners, Vertex Ventures and Node
Capital are among the most enthusi-
astic. For example, Gobi invested in 18projects since the beginning of 2016.
“With no predominant apps in a
given scenario in countries in the re-
gion, it is like a free-for-all for Chinese
VC funds as they compete in hunting
down investment targets and selling
their stakes at a profit,” said Richard.Drop in the US
The boom in Southeast Asia has
been accompanied by a fast cooling in
Chinese VC investment in the US, in
part due to rising policy risks.
Regulatory tightening caused Chi-
nese VC funding for US biotechnology
start-ups to plunge from $1.65 billion
in the first half of 2018 to $725 million
in the first six months of this year, the
Financial Times reported on July 9, cit-
ing an industry report.
Biotechnology, medical services and
pharmaceuticals are priority targets for
Chinese VC funds, according to consul-
tancy firm Rhodium Group.
Last year, $1.5 billion went into these
sectors.
The plunge reflects the broader pow-
er of the Committee on Foreign Invest-
ment in the US, which reviews deals
involving stakes in start-ups.“Besides a collapse in confidence,
exploring the more saturated US mar-
ket is costlier for Chinese VC funds,”
Richard said.
Adrian Latortue, chief operating of-
ficer and cofounder of Singapore-reg-
istered AI-empowered financial infor-
mation provider Compliy, said that the
trade war had a limited impact on the
decisions of VC investments.
“It’s more about critical times to cap-
ture growth,” Latortue told the Global
Times on Monday.
“Technology IPOs in the past year
in the US didn’t do so well and the US
VC investment space is quite crowded.
Valuations are very high so it means
high capital requirements with the
same amount of potential growth,” said
Latortue, who has had extensive experi-
ence in VC in Southeast Asia.
On the other hand, the successes
of Southeast Asian start-ups and the
explosion in the number of start-ups
proved that the market is positioned for
continued growth, said Latortue.INVESTMENT
SE Asia start-ups lure Chinese VC
“After China and India,
Southeast Asia has
become the battlefield
for Chinese-led VC
funds.”
Richard
Internet industry insider Boom accompanied by cooling capital flows into US
Page Editor:
[email protected]Pedestrians walk past stores in
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