Investments are flooding into China´s innovative industries. But investing in China is a completely different game from the traditional VC approach, tells William Bao Bean, Managing Director of Chinaccelerator, in VentureCon Japan, according to E27. China is providing more finance, and more competition.
(One) reason why Hong Kong is seen as a great environment to do business is its proximity to Mainland China and its often seen as a gateway to that giant market. William Bao Bean, Investment Partner of SOS Ventures … attempted to explain what’s been happening in China in a fireside chat.
… Bean paints a succinct picture: “40 billion was done from VCs in the US last year in China and last year, 20 billion was done on the angel side. Most of it was late stage but now there is a huge amount of activity going on in the early stage. Chinese investors want a quick return in two to three years — they’re not willing to wait ten,” he said.
Speed is clearly one China’s strong suites and Bean said that this is reflected in generations of successful entrepreneurs giving back to the ecosystem. “Things have gotten so competitive that second generation entrepreneurs are starting to get acquired by Alibaba and Tencent, and these entrepreneurs do not want to continue working past their earn out — so they’re funding the third generation of entrepreneurs. So you have a blossoming of the early stage and before there were hundreds of angels, but now there are tens of thousands of angels investing,” he said.
According to Bean, China has produced a whopping 16 unicorns and he said investors have been swapping their investment strategies. While traditional Series B investors are switching to A, those doing Series C are now focusing on the super early stage — and Bean said the valuations are coming up to meet them.
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