Investment in China’s mobile-Internet industry reached a record $378 million in the first six months of the year, a year-on-year increase of 18 percent, according to a leading consultancy in the venture capital and private equity industry.
“Although the total investment volume of VC and PE in the first half of the year has declined about 60 percent year-on-year, the investment in the mobile- Internet industry has risen and the momentum is expected to continue,” said Gavin Ni, founder and chief executive officer of Zero2IPO Group. There will be at least five companies in mobile-Internet industry to be listed in the next three to five years in China, he added, and the market revenue of mobile Internet will rise to about 130 billion RMB ($20.5 billion) from last year’s 102 billion RMB.
According to the report, the major incentive for the increased investment was the fast development of the mobile-Internet market. There has been an increasing number of mobile-Internet users in recent years, and it is expected that by the end of this year the figure will rise to 520 million from last year’s 429 million. By 2013, the number of mobile-Internet users will outweigh that of Internet, the report said.
Joe Chen, chief executive officer of Chinese social networking company Renren Inc, said the shift to mobility is the major trend in the domestic technology industry. “The mobile-Internet market has great potential, representing the biggest trend in the information technology industry in the next 10 years,”
Mobile e-commerce, wireless value-added services and mobile gaming services have attracted the most investment this year. Mobile e-commerce will become one of the major investment areas in the industry, said the report. VC and PE companies made five investments in mobile e-commerce industry in the first half of this year. The investment in mobile Internet was $665 million in 2011, and market revenue was 102 billion yuan, a year-on-year increase of 36.84 percent, the report said.
Zhou Kui, partner of Sequoia Capital China, said despite global economic uncertainty, he is optimistic about investment in the mobile-Internet industry. “We attach great importance to the development of the mobile- Internet industry, since it is of great potential,” Zhou said.
Xu Shengyuan, managing director of Intel Capital China, the investment arm of US-based chip giant Intel Corp, said every sector related to mobile Internet could attract Intel Capital’s attention. “The mobile-Internet industry provides much convenience to consumers and constitutes a huge vertical market,” Xu said. “There will definitely be some new large-scale companies coming out of this industry.”