2006ChinaVentureCapitalAnnualReport1（一）.pdfVIP

2006 China Venture Capital Annual Report Zero2IPO Group, a leading integrated service provider in China venture capital and private equity industry, announced that China VC investments created new record with US$1.78B in 2006. Notably, deals closed in the early stage exceeded that of the expansion-stage, accounting for about half of all deals in 2006. Figure 1 VC Investments from 2001 to 2006 The VC investments in 2006 created the historical high both in terms of deals volume and investment amount. The investment amount reached US$1.78B and is 51.5% higher than that in 2005. 324 deals increased by 42.1% year-on-year from 228 in 2005, reflecting that venture capitalists are still very confident of the China VC market. The newly enacted law “Provisions for Foreign Investors to Merge and Acquire Domestic Enterprises” seems not to have yet greatly impacted China venture capital investments in appearance. By industry, the weight of IT investment was down in 2006, though IT still commanded the lion’s share of VC investments in terms of deal number and investment amount. The trend was even more obvious in the second half. In the short run, IT investment will continue to account for the major proportion of China VC investments. In contrast, services shows significant growth , accounting for 14.5% of all the deals, increasing by 5.7% from 8.8% in 2005. The fast growth was contributed largely by new media investment. Figure 2 Industrial Distribution by Deal No. 1 China Venture Labs Ltd • Room 1102-1104, 11/F, Jinbao Tower, No. 89, Jinbao Street, Dongcheng District, Beijing 100005, China • Tfn: +8610• Fax: +8610 Figure 3 Industrial Distribution by Amt. Invested (US$M) Figure 4 Geographical Distribution by Deal Number and Amount Invested (US$M) Note: Shenzhen is isolated from the statistics on Guangdong. As for the geographical distribution, Beijing received the most VC investments in terms of both deal 2 China Venture