Shanghai ad firm gets US$45m in new funding
Digital Advertising Channels, an outdoor advertising company in Shanghai, has received US$45 million from a host of investors to replenish its operations nationwide, a sign that global venture capitalists remain optimistic about China's economy amid the global recession.
The company, which provides advertising sites in schools, airports, golf courses and cinemas, raised the cash from several investors, including existing shareholder IDC Technology Venture Investment, but will take a cautious stance on expansion, a company source said.
Venture-capital and private-equity funds are scaling back investments in China amid an economic slowdown and the global equity rout.
However, the mainland was still a bright spot worldwide as investors saw the potential of the world's most populous nation, fund managers said.
'Quite a few multimillion-dollar deals were sealed recently in China because the invested companies are hungry for fresh capital to keep their businesses afloat while cash-rich funds still want to help them,' said a venture-capital fund manager. 'It is believed that those who can survive the bad time will have their day in the sun again.'
Digital Advertising was founded at the end of 2004. Its investors include AsiaVest Partners, Intel and Australia's Seven Network.
The company has an advertising network covering 30 key mainland airports, 350 colleges and 200 golf areas.
Last month, United States venture capital firm Sequoia committed millions of US dollars to fund the expansion of Cernet Koncept Network, a mainland internet company targeting the country's 27 million college students.
Cernet will use part of the proceeds to buy outdoor advertising slots at colleges.
'Venture capital investments in China began to slow down as investors are more cautious,' said Zhu Yun, a researcher at fund consultancy Zero2IPO.
'However, some sectors such as catering and education still witnessed increasing fund inflow as investors believe they are unaffected and will generate stable returns.'
Ambow Education Group in Beijing recently raised US$103 million from a group of investors.
In the third quarter of this year, 99 mainland firms received a total of US$787.7 million in venture capital, according to Zero2IPO.
As the global stock markets dropped sharply, venture capitalists were in a good position to bargain the price, fund managers said.
