Chinese investors’ interest in European technology firms has grown over the past three years because the continent is home to entrepreneurs with potential but has so far lacked the capital seen in other markets, commentators said.
Mattias Ljungman, a partner at a venture capital firm said interest from Chinese investors had accelerated over the past twelve months because they see Europe as being on a different cycle to China or the United States.
“There’s an increasing appetite by the Chinese to look at Europe because they have recognised the opportunities of Europe, which is a huge market in itself.” Ljungman said. “And plus it has this more attractive profile in terms of being a good opportunity in seeing strong growth while actually not being overheated as we have seen in other markets.”
Chinese foreign direct investment in Europe rose to a record US$23 billion in 2015, according to law firm Baker and Mckenzie, with 73 per cent of investments focused on four industries, including technology.
Investments made in Europe under US$100 million from Chinese investors rose to US$2.6 billion in 2015, with private investors representing 80 per cent of investments.
Total venture capital investment in Europe rose 5 per cent to US$4.3 billion in 2015, according to an association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors.
In January, Chinese technology investment group Cocoon Networks, backed by China Equity Group, announced a US$721 million London-based venture capital fund to invest in technology start-ups in Europe.
A London-based peer-to-peer mortgage lender received US$32 million in funding from Chinese technology firm Beijing Kunlun in June 2015.
European companies are more flexible and more willing to enter new markets with different languages and cultures as they have experienced this close to home and want expand to neighbouring countries, unlike start-ups in the U.S., Ljungman said.
South China Morning Post
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