Liu Minxia

MORE than 300 venture capitalists looking to invest a total of US$20 billion gathered at an annual forum in Shenzhen at the weekend, giving prominence to the city as a magnet for venture capital funds.

“The upcoming NASDAQ-like growth board will give an even harder push to the growth of venture capital in Shenzhen,” Cheng Siwei, former vice chairman of the Standing Committee of the Chinese National People’s Congress, told more than 1,500 people attending the 10th (2008) China Venture Capital and Private Equity Forum in Shenzhen on Friday.

The two-day forum, which has been held for five consecutives years in Shenzhen since 2004, hailed the strong venture capital growth in Shenzhen amid an industry boom in recent years.

By the end of last year, venture capital funds managed by Shenzhen firms had reached 60 billion yuan (US$8.56 billion), a jump of more than 300 percent from three years earlier, Shenzhen Mayor Xu Zongheng told the forum’s opening ceremony.

He said Shenzhen venture capital companies had invested more than 40 billion yuan in more than 1,000 projects in sectors such as new energy, new materials and biopharmacy, playing a bigger role in the growth of startups.

“Among the 18 Shenzhen companies listed on the SME (small and medium-sized enterprises) board, 13 had venture capital investment,” Xu said.

The forum, which closed Saturday, for the first time received a group of more than 30 venture capitalists from Taiwan, who previously focused their attention only on high-tech companies in the island province and the United States.

These venture capitalists, together with about 300 others from 10 countries, met with more than 500 Chinese companies seeking investment during the forum.

“We’re looking for US$8 million of investment to help us expand,” said Zhou Gaofeng, an employee with Shenzhen South Heaven Gate Network Info-Tech Co., a Shenzhen-based company developing software to help children acquire English. He said several international investors consulted their project at the forum.

Foreign entrepreneurs also came to try their luck. Frenchman Hakim Mamoni started his company, WorldBridger Ltd., in China about two years ago, and he envisaged being able to provide telecom services, including maps and directions and information about local events, to expatriates in major Chinese cities such as Beijing, Shanghai and Shenzhen.

“I will start it with Shanghai and both Chinese and foreign investors are welcome,” said Mamoni.

Venture capital investments started to take off in China in the past two years thanks to a worldwide recovery from an industry slump starting 2000.

China attracted US$39.84 billion in venture capital last year, an increase of about 300 percent from a year earlier. A total of 893 million yuan was raised last year, up 200 percent from a year ago.