Destination China

We no longer seem to be amazed by China’s growth story. But isn’t it truly remarkable? China has achieved double-digit growth for 5 consecutive years and has emerged as an economic superpower!

And now we wonder how the US slowdown will impact China’s growth. While the US is an important market, the most important market in the future will be… China. Consumerism has already accelerated here and should continue to do so, with China’s urban population expected to exceed the total population in the US by 2025, according to data from McKinsey & Co.

So, of course the offerings would be laid out for the Dragon. If you see where the funds are headed these days… it is to China. The country attracted $3.2 billion in venture capital funds last year, up from $1.8 billion in 2006. This figure is expected to skyrocket to between $4 billion and $5 billion this year, according to a report by Mercury News.

Permavest Investment has recently closed a private equity fund-of-funds with capital commitments totaling $63 million. Several high-net-worth clients (spread across the Asia Pacific region) have contributed to this. The aim of the private equity fund is to help investors access leveraged buyout and venture capital partnerships in China.

Global venture capital firm Lightspeed Venture Partners has recently announced $800 million in its own fresh funds. This fund is double the amount that had been raised previously, 2 years back. That’s because Lightspeed is now eyeing later-stage investments in China and India. Moreover, the fund was oversubscribed from a target of $675 million.

These are only a few examples of venture capital pouring into China. Everyone wants their share of the pie, now don’t they?