SHANGHAI, November 09,. 8, SinoCast -- Global ventures are speeding up venture capital investment in China led by IDG Ventures and Softbank International Ventures.

International Data Group, the limited partner of IDG Ventures, and Accel Partners have launched an USD 250 million venture capital fund for China. The IDG-Accel China Growth Fund will invest in IT, healthcare, consumer technologies and other emerging technologies.

IDG Technology Venture Investment (IDGVC), which has been managing IDG's VC funds in China since 1992, will manage the new fund. The fund will additionally raise capital from institutional investors worldwide.
Softbank International Ventures, through its three affiliates Softbank Corp., Softbank China Venture Capital and Softbank Asia Infrastructure Fund, is active in China's information technologies.

Many other VC investors including Accel Partners and Matrix Partner are seeking to mull a foothold in China market where the VC investment environment is improving and Chinese enterprises have unmet needs for VC.
Zero2IPO, a provider of advisory services based in Beijing, reported first-half new VC investments hit USD 1.651 billion, more than double the USD 699 million last year.

Of the ten most popular sectors for VC investment, electronics industry, which includes computer, Internet and communications, chip design and other IT related areas, is preferred. Since 1999, a substantial wave of VC has flowed into China's IT industry.

IDGVC has invested in more than 140 China-based high-tech companies since it is founded in 1992. Its portfolio companies include the largest Chinese search engine Baidu.com (BIDU. NASDAQ), Blogcn.com, Sohu.com (SOHU. NASDAQ) and tencent.com.

The fund investments in the past years have produced generous return of over 45 percent, showed an industry survey. The fund spent USD 1.2 million for a 4.6 percent stake in Baidu.com in 2000, and the return estimate is as high as 80 times based on the stock's current market value.

It used to participate in the growth enterprises at lower prices with investment falling between USD 500,000 to USD 5 million. The USD 8 million investment in HC International (8292.HK) is an exception so far.
It acquired 17.4 percent of the information services provider in 1999. HC International went public on the Growth Enterprises Market of Hong Kong Stock Exchange in December 2003.

VC Investments in China's high-tech sector have totaled around USD 300 million at present, compared with the planned USD 1 billion.

By contrast to IDG's modest investment philosophy, Softbank International Ventures seems prefer to make each investment in excess of USD 5 million.

Softbank Asia Infrastructure Fund established in February 2001 has already funded over 20 Chinese IT companies with single investment averaging more than USD 10 million. The Shanghai- headquartered VC investor targets at the mainland, Hong Kong, Macao and Taiwan.

VC investments in IT industry account for 63 percent of the total on average, of which the internet business is the favorite.

While internet companies just make up 30 percent to 35 percent of IDG's investments planned for 2005, as the company wants to widen business scope to some new areas like pharmaceutical.

It is responding to Zero2IPO's survey that VC injected in biopharmaceutical just accounts for 0.4 percent of the total.

Softbank Asia for the first time dabbled in property industry. The VC fund along with Carlyle Group, a leading private equity investor, injected USD 45 million in China Real Estate Network Limited for a combined 22.5 percent stake.

CRENL is the largest real estate broker focusing on second- handed houses and new commercial housing. It has opened more than 900 chain stores in 30 cities with over 6000 employees.

The Tianjin-based company plans to add chain stores to over 4,000 in 90 cities by end-2007 and go listing in NASDAQ in the year.