The Street.com just ran an interesting interview with Cadol Cheung, managing director of Asia Pacific for Intel Capital. The article is entitled “All The Tech in China” and it is definitely worth a read for those interested in Chinese technology companies or Chinese venture capital investments. I found the following from the interview to be the most interesting:
- Cheung is seeing increased innovation from Chinese companies.
- Valuation of Chinese technology companies is high.
- Intel invests only $1 to $5 million in each company.
- Korea’s technology strength is in mobile communication. Taiwan’s strength is in supply chains. “In China, consumption is the theme of the day, so you have companies that provide products to the consumer — like [wireless services provider] Tom.com or [online and mobile instant-message provider] Tencent — that are especially interesting.”
- India is strong on the service side; China is strong on the product side.
- The typical profile of a manager of a company in which Intel invests is an entrepreneur who “studied overseas [and returned], and also local entrepreneurs. They’re typically in their 30s or 40s with some working experience.”
- Most of the companies in which Intel has invested are in Beijing or Shanghai.
- Intel has already invested in ten Chinese companies that have gone public, including PCCW, Asiainfo Holdings, and Sohu.com.
- China’s regulatory environment for VC firms “is getting more and more friendly.”
Just a few days earlier, however, Cheung was quoted in a Reuters News article, as becoming increasingly “cautious” on China technology investment:
“I’m more cautious now than a year ago,” he said. “But we are long-term investors.”
A three-year run-up on technology companies, a continuous flow of new money into China, and a rash of initial public offerings indicated the end of the current cycle was near.
“I’ve seen these cycles before and we won’t be affected by short-term changes in the economy, but when everyone is so bullish I tend to be more cautious,” he said.
Cheung nonetheless says “China is still one of the growth engines of the world economy.”