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Japanese Venture Capitalist Looks for More Opportunities
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Japan's largest venture capitalist JAFCO will invest in up to five more mainland companies this and next month after its latest deal with video-sharing website Tootou.com, a senior executive said.

"We plan to make seven or eight investments in the first half of the year, involving a total of US$30 million," Vincent Chan, managing director of JAFCO Asia, who is in charge of the firm's North Asia business, told China Daily.

JAFCO's most recent investment was earlier this month when it teamed up with venture capitalist (VC) Granite Global Ventures to invest a combined US$8.5 million in Tootou.com. Before that, it acquired mobile advertising agent Madhouse and TV advertising firm Cgen Digital Media Network.

The flurry of investments reflects the increasing interest of foreign venture capital firms in accessing the mainland's thriving economy ahead of the first batch of third-generation (3G) licences being issued.

Venture capital going to the mainland is on the rise after a lull in 2004 and is expected to reach US$1.5 billion this year, an increase of nearly 50 percent year-on-year.

In March, Chan said he now spends 90 percent of his time traveling on the mainland seeking business opportunities and this year is likely to invest in more than 10 projects on the mainland.

JAFCO invested between US$2 million and US$8 million in each project.

As the mainland drives its economy by boosting consumption, opportunities crop up within the consumer sector, Chan said, adding that he plans to invest in those markets with part of the US$168 million in funds JAFCO raised in March.

"Half of the mainlanders' income will go to consumer sectors. We hope to ride the spending wave," he said.

Previously, the company largely invested in tech players. Its successful investments on the mainland include search website 3721.com and wireless solution provider China Wireless.

Commenting on the exit mechanism, Chan said he hoped the mainland's authorities would do more to diversify exit channels for foreign VCs.

(China Daily May 19, 2006)

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