China Science and technology start up companies overvalued Foreign venture capital questioned

[Abstract] some venture capitalists say they will slow down investment in unlisted Chinese technology companies this year because their prices are too high.


Tencent science and technology news March 13th, foreign media reported that China’s technology start-ups are raising a lot of money from private investors at a record rate, which caused a high valuation concerns.

is the latest round of public comment is about to complete the $800 million financing, sources said the strong demand for new investors increased the amount of financing, making the valuation of public comment reached about $4 billion. This is equivalent to two times the valuation of the company a year ago, even higher than the market value of the United States after the listing of similar sites Yelp $3 billion 400 million. Prior to this, the United States, one of the main competitors of the public comment in January, just $700 million financing.

skeptics have pointed out that the valuation of Chinese technology companies are too high, because they have not yet found how to continue to generate revenue channels, but also to talk about earnings. Investors and Internet entrepreneurs are more concerned about the number of users, the total amount of commodity trading and other indicators, rather than revenue and profit. Some venture capitalists say they will slow down investment in unlisted Chinese technology companies this year because their prices are too high.

"(Chinese Technology) one of the reasons for the valuation of the Private Companies is soaring missed opportunity concerns," Hongkong hedge fund OTS Capital Management chief investment officer Tony Hsu said, "many investors stubbornly put them on a par with the big companies, regardless of their need to pay the price."

is headquartered in Hongkong, the Asian private equity fund Research Center released data show that in the second half of last year, Chinese technology companies through private financing transactions of $5 billion, far higher than the amount of financing of $700 million during the first half of 2013. One of the biggest round of financing in December last year, millet was voted $1 billion 100 million, making the mobile phone manufacturer’s valuation of up to $46 billion, becoming the world’s highest valuation of technology start-ups. This is equivalent to more than four times the valuation of millet in August 2013 $10 billion.

U.S. technology start-ups and listed technology stocks are also facing the valuation is too high doubt. After the China electricity supplier giant Alibaba to invest $200 million, "burn after reading" the current valuation of $15 billion Snapchat. "Can not say that the United States and China’s science and technology industry is a twin brother, but the two are closely related." Venture capital firm DCM China co-founder Lin Xinhe said.

investors often compare companies in China and the United States, sometimes because of the high valuation. In December last year, the United States called car service company Uber valuation reached $41 billion, which makes China’s two largest taxi service company, drops taxi and fast taxi, valuations will also increase. The two China company after the latest round of financing $1 billion 300 million, agreed to swap to be made one. >

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