Published on : Jul 13, 2015
Apus Group, a mobile software firm based in China is relatively unknown in Silicon Valley. But that has not affected the company’s rise to a valuation of US$1 billion within a year. It has been observed by industry analysts that the technology startups across Asia are quietly attracting the investors and within the first half of this year, around 46 Asian startup firms have raised funds worth US$100 million and above. This reflects the shift in the global technology investment scenario which was earlier dominated by North America. In Asia, startups especially in countries such as India and China are being increasingly looked at by the private equity firms, venture capital firms, and banks as lucrative avenues to invest. Apart from the domestic investors, these startup firms are also enjoying the attention of the U.S. investors as well, who are willing to back the Asian players and gain advantages in their home markets.
However, the recent turmoil in the stock market in China raises doubt over the continuity of the investments. With the valuation of the startup firms plunging low due to the stock market crash, investors and private equity firms are keeping away from the big rounds of fundraising. Experts point out that with many of China’s big tech firms such as Alibaba listed on the U.S. stock exchange, the companies would continue to get the support of the U.S. investors.
China and India are the largest global smartphone manufacturers and the investors are willing to put their money into these firms to reap gains. In China, companies such as Baidu, Alibaba, and Tencent have invested in acquiring smaller Chinese companies to strengthen their business. Venture capital firms such as Sequoia Capital China, SOSVentures and Chinaccelator have invested in small mobile software companies such as Apus Group, which reflect their faith in performance of these small enterprises to generate large profit. In India, Alibaba’s financial affiliate Ant Financial and the U.S. hedge fund Tiger Global Management have each invested more than US$500 million in the Indian companies. Analysts have mentioned that the trend will continue irrespective of the economic situation.