As the A-share Growth Market becomes a hot listing place for high valuation IPO (many new listings can fetch a price of 40-50 times earning), more RMB funds are starting.
We heard that, venture capital veteran, Robert Chau, has left Northern Light to start his own firm. The new company will run a 6 billion RMB fund. While he was at Northern Light Venture Capital, he has invested into budget hotel chain, Hanting Hotels, online community, Kaixin001, and energy storage developer, Prudent Energy, etc.
Apart from the attractiveness of A-share market, another reason VC want to have RMB fund is that there is less restrictions in investing into domestic companies, especially those concerning government projects or nature resources. There are tight regulation in sectors, such as water supply and water treatment. US dollar funds, treated as foreign investors, could find it hard to invest, whereas, RMB fund, treated as a domestic investor, can get involve more easily.
We expected to see more and more RMB funds in China’s venture capital industry.