Beijing becomes new 'Silicon Valley'

(Agencies) Updated: 2014-10-28 07:26

Beijing is home to the most new software companies created outside the United States since 2003, and they are valued at more than $1 billion, Atomico, a venture capital investor, said on its website.

The city is the base for 17 of the companies, including Internet security provider Qihoo 360 Technology Co, said Atomico, led by Skype co-founder Niklas Zennstrom. Northern California's Silicon Valley area has the largest pool of big software companies, with the region accounting for 39 percent of all large software enterprises worldwide.

Beijing, including the Zhongguancun district that has been called China's Silicon Valley, is benefiting from a concentration of software developers that are helping the economy reduce its reliance on manufacturing. The city also hosts the most new software developers to start in the business since 2003, according to Atomico, a sign of the capital's power as a magnet for the growing global industry.

"Beijing has a large talent pool," said J. P. Gan, a Shanghai-based partner at Qiming Venture Partners, which manages four funds with more than $1.1 billion in assets. "The vibe for startups is also good - lots of gatherings, meetings, good for brainstorming and very convenient."

Weibo Corp, China's biggest micro-blog service, JD.com Inc and Cheetah Mobile Inc, all of which went public in the US this year, are based in Beijing.

The spread of the Internet, cloud computing and open-source software have removed many of the traditional barriers to competing with Silicon Valley, Atomico said.

Silicon Valley had 52 companies valued at $1 billion created since 2003, followed by Beijing, New York, Stockholm and Los Angeles, according to Atomico. The data include companies providing enterprise software, e-commerce, social communications and gaming.

Consumer-focused companies accounted for all of the 26 Chinese companies valued at more than $1 billion compared with 52 percent in the US and 82 percent in Europe, Atomico said.

About half of the companies on the list have had a "significant liquidity event", including 40 that held initial public offerings and 23 were involved in mergers and acquisitions, Atomico said.

JD.com raised $1.78 billion in a May IPO, the same month that Cheetah Mobile had its $168 million offering.