Beijing remains Asia's top spot for VC investment

Beijing is the most popular destination in Asia for venture capital investment, followed by Shanghai and Bombay, according to a report released by the Martin Prosperity Institute.

It said that venture capital investment totaled $42 billion globally in more than 150 cities in 2012, which is the latest year for which figures can be obtained in the sector. The US west and east coasts, China, India and Western Europe were the most active areas.

San Francisco, San Jose, Boston, New York, Los Angeles and San Diego ranked as the top six in the world by deal value, and their total investment funds received accounted for 45 percent of the global amount, it said.

Beijing financed venture capital funds totaling $758 million, ranking first in Asia and ninth in the world by investment value; Shanghai ranked second in Asia and 14th globally. Bombay and Bangalore ranked 15th and 17th globally, according to the report.

"Venture capital development in China and India is developing rapidly, which proves that the VC sector is undergoing globalization," the report said.

"Beijing has a mature ecosystem for entrepreneurship, which attracts venture capital investment," said Hu Boyu, founding partner of Beijing-based venture capital firm BlueLake Capital.

Hu explained that there are many top universities and Internet giants in Beijing, and it is a rich source of skilled IT workers. These talented staff may set up start-up companies or be hired by them.

"Influenced by Beijing, the entrepreneurship conditions in Shanghai and Hangzhou are also improving," said Hu.

BlueLake Capital has invested in 13 deals in the telecommunications, media and technology sectors, with investment totaling around $80 million in the past one-and-a-half years, and 70 percent of them were in Beijing.

The report also said that per capita venture capital investment in the US west and east coasts was large, while that in Asia and Europe was small. San Jose, San Francisco and Boston ranked as the top three cities by per capita investment, while Beijing ranked 55th and Shanghai was 74th.

"I remain confident in the venture capital development of China, especially Beijing, in the coming years because there are many innovative companies and the VC funds are ample," said Hu.

The report also showed there is a positive correlation between venture capital investment and economic size of a city, but these are not consistently related to each other. For instance, New York, the world's largest city by economic size, only ranked fourth globally by venture capital investment, and San Francisco, the world's largest venture capital venture center, ranked 23rd in the world by economic size.

caixiao@chinadaily.com.cn