The Next Chinese Start-up

11Dec2015

With the big groups on the scenes such as Taobao, Xiaomi, Baidu etc. It is easy to forget that several Chinese Giant Companies started from scratch.

The Background of the Chinese Start-up

With the development of Chinese economy, venture investment industry has ushered in the boom. Over the past decade, especially in the nearly five years, China has so many PE and VC institutions such as the production of spring, especially in the IPO stage, looking forward to living the myth of the rich overnight. Venture capital industry is impetuous, all kinds of projects can easily get the capacity of doing so. More than 1,000 investment agencies fund entrepreneurs in China, holding a capital sum of over 56.8 billion USD. The three main sources of funding are the following one:

State-backed venture capital funds
Dominants player funds: BAT in technology area
Angel investment funds

And the Zhen Fund (Funder: Bob Xu, founded in 2011), K2VC (In Chinese 险峰华兴） (Funder: Chen Keyi, founded in 2010) and Legend star (Chinese Academy of Sciences & Legend Holding) are the three typical Angel investment funds in China. The Zhen Fund invested Jumei.com, jiayuan.com and Lightinthebox.com are the top popular investment projects. The K2VC group invested on Jumei.com 聚美, he also invested on Youyuan.com (In Chinese 有缘网) and Zhaogang.com (In Chinese 找钢网). The common factors among these investment projects are that these projects are very fit Chinese cultural and social development requirements. So, entrepreneurial opportunities exist forever, but we must be good at finding it.

The market demand

Return to a value level, looking for the next Chinese start-up, in fact, this is an eternal topic because the value investment of financial investment has always been a claim. There are two aspects need to consider about, one is entrepreneurship business point of view, and another is an investment. It is very important for entrepreneurship to have a better beginning, technology, business model and technical mode have a long-time influence to a company. For investment, venture capital in order to continue to develop is not money blindly, which also seek for returns, rewarding will give entrepreneurial enterprises support. So, only find the actual market demand, and apply right business model can develop a good venture case.

New typical cases in China

The development of the Internet and IT technology, as well as the stimulation of the rise of start-ups, which gave rise to the great demand for the joint office space.Iresearch’sdata show that China mobile Internet market scale reached 185.7 billion yuan in 2014, and the size of the market will grow by about 4.5 times that of nearly 600 billion yuan in 2017. DayDayUp launched the first office space in Sanlitun on Oct. 27, 2015, with more than 60% registers. The target market of DayDayUp is startups with an international vision. The competitive advantage of DayDayUp is that it supported by GWC network, where the founder from, with a global connection, over 600 members including famous industry key players, gathered 75,000 professionals from over 40 countries.

From the perspective of industry analysis

Manufacturing is the foundation of the Chinese economy. It is necessary for China to transformation and upgrading of manufacturing, as China is still a middle-income country and want to become a real globally competitive country.The Internet has become a traditional industry, the future is high-end manufacturing.China’s manufacturing industry decline very quickly, living hard, must be eliminated or consolidation.China has such a large population base, only the manufacturing industry in the industrial division of the great value can solve the problem of employment.Internet + medical treatment in the past year is quite popular with the capital market.Concrete in the medical field, China is enjoying a very high-speed growth, and there are so many investment opportunities. For the third industry, the Chinese economy’s biggest bright spot is consumption in 2015. In the case of weak investment, export downturn, consumption upgrade has become China’s economy power to maintain strong growth.

I hope you enjoy reading this article and have more insight about the Next Chinese Startup. If you want to learn more about the topic click here, we, Daxue Consulting Team, will give you more insights of whatever you want to know about China.

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