Venture Capitalists Pile Cash Onto Chinese Mobile Apps

While the debate about a technology bubble is gaining popularity in the U.S., Chinese venture capitalists haven’t the time for bubble talk. They are busy injecting money into the hottest tech companies at an unprecedented speed and making technology venture investments on track to set a new record by a large margin in 2014.

The aggregate venture investment in the Chinese technology sector totaled around US$3.27 billion during the first six months this year, compared with US$4.4 billion for the whole year of 2013 and US$2.6 for 2012, according to data tracker Dealogic.

If the current pace of capital deployment continues, technology venture investments in China could be around 50% higher than the previous record of US$4.6 billion set in 2011.

There is no data available for specific sub-categories, but mobile apps have been a favorite of venture investors. It feels like every week, another mobile app is announcing new financing rounds at sometimes astonishing valuations.

"The world is transitioning from PC to mobile, and we are still at a pretty early stage in the cycle," says Andrew Teoh, formerly head of corporate finance and treasury at Alibaba Group, and now founder of Ameba Capital, an early stage technology venture fund focused on Greater China. "Investors are paying because they see a lot of growth potential, and valuation can be justified if these growth potential are realized."

Ameba Capital itself has invested in Chinese mobile apps including female e-commerce platform Mogujie and personal finance bookkeeping and management app Wacai, both have announced new financing rounds this year.

Here we list some newly launched Chinese mobile apps that boast valuations of around US$100 million or more. Most are less than two years old.

We only list independent apps that started from scratch. Valuation numbers are reported in the media or are rough estimates based on financing rounds. The list is not comprehensive.

Investors Love Chinese Mobile Apps

Launched in May 2013, social chat app Inbilin raised US$15 million in series A financing led by Qiming Venture Partners and Morningside Ventures.

Launched in April 2013, menstruation management app Meet You, achieved US$15 million in series B financing led by Matrix Partners this January. It previously received undisclosed amount in series A financing from K2 ventures (Xianfeng Huaxing Venture Capital Limited).

The valuation is estimated to be above US$100 million, based on the general rule of transferring 10% to 15% of shares in the second round of financing, according to Chinese media reports.

Launched in December 2012, file sharing app Zapya reportedly raised US$20 million in series B financing led by IDG Capitals with participation from Innovation Works and NLVC.

Launched in September 2012, free taxi-hailing app Didi Dache reportedly raised US$700 million in series D financing. It previously received US$3 million in series A financing led by GSR Ventures, US$15 million in series B financing led by Tencent, and nearly $100 million in series C financing led by CITIC Private Equity and Tencent.

Launched in August 2012, personalized news app Toutiao reportedly raised US$100 million in series C financing led by Sequoia Capital, with participation from Sina’s Weibo. It previously received an undisclosed amount of series A and series B financing from Yuri Milner, founder of DST Global, and SIG China in 2012.

Launched in August 2012, free taxi-hailing app Kuaidi Dache, is now preparing for its series C financing, according to Zhao Dong, COO of China’s self-claimed first taxi app. It previously received US$10 million in series A financing and an undisclosed amount in series B financing from Matrix Partners and Alibaba, according to Crunchbase.

Launched in May 2012, menstruation tracking app Dayima reportedly raised US$30 million in series C financing led by Ceyuan Ventures. It previously received US$5 million in series A financing from Bertelsmann and Zhen Fund, and US$10 million series B financing from Sequoia, Bertelsmann and Zhen Fund.

Launched in May 2012, free social karaoke app Changba reportedly received about US$10 million in series B financing, but more details were not disclosed.

Launched in August 2011, mobile social app Momo reportedly received an undisclosed amount in its newest round of financing with a valuation of around US$2 billion.

Launched in August 2011, online food ordering app Meican reportedly received an undisclosed amount of follow-on series B investment from Shanghai-based venture and private equity firm Trustbridge Partners. It previously received US$1o million in series B financing from Nokia Growth Partners and KPCB China, and an undisclosed amount in its series A financing from KPCB China.

Launched in February 2011, Chinese social shopping app Mogujie, reportedly raised US$200 million in Series D financing from Hopu Fund, TBP Capital, Qiming Venture Partners, IDG Capital Partners, and Banyan Fund. It previously received tens of millions of U.S. dollars in series B and series C financing from Qiming Venture Partners, BAI Fund, and IDG Capital partners in 2012.