VC Companies Have Invested 5 Billion Yuan in Agricultural Industry in Three Years
2009-09-24
New agriculture has become Chinese PE firms’ new buzzword. According to research institution’s statistics, VC companies have invested approximately 5 billion yuan in new agricultural companies in recent three years.
Jiuding Capital has invested 5 companies successively
Yesterday, Jiuding Capital disclosed to Securities Times that it invested 80 million yuan in an agricultural company. “We invested 80 million in Fuzhou Baiyang Seafood Co., Ltd., which will enter into fast expansion under the action of our capital,” said Xiaojie HUANG, President of Jiuding Capital.
As China’s large VC institution, Jiuding Capital has funds of over 3 billion yuan under management. It’s worth noting that it has invested in several agricultural companies recently. Before Baiyang, it invested in 4 agricultural companies with total amounts of 300 million yuan, including Tianyuan (80 million yuan), Sanchuan (30 million yuan), Huifeng (70 million yuan) and Gifore (40 million yuan).
If counting for the investment in Baiyang, Jiuding Capital’s total investment amount in new agriculture has reached almost 400 million yuan. Although it’s emphasized that it won’t only invest in agricultural companies, Jiuding Capital did not hide its favorites about the industry because of its huge development potential. It analyzes that the industry has a growth space of 23 times in China compared with Japanese market.
5 billion yuan of funds rush into
It’s reported that other VC companies have shown their interests in new agriculture besides Jiuding Capital. The well-known VC firm Fortune Capital announced to invest 36 million yuan in Jiangxi Huangshanghuang Group Food Co., Ltd. two months ago.
VC firms’ investment in new agricultural companies has been boomed from last year. Blue Ridge Capital and KPCB invested 30 million US dollars in Jiangxi Tianren Ecology last June; Beijing Tiantu Xingye Venture Capital Investment Co., Ltd. together with other two companies, invested 65.88 million yuan in Xinjiang Condy Agri-Genetics Co., Ltd. at the end of last year; Goldman Sachs invested more than 200 million US dollars to raise pigs last year, all of which have not only attracted people’s attentions, but also testified VC investors’ preference on agriculture.
According to Zero2IPO Group’s figures, there are 69 VC or PE investors invested in agricultural enterprises among 2002 and the first half of 2009, with 708 million US dollars (almost 5 billion yuan) involved; the number and amount have been increased since 2006 and the two figures have increased by 1.75 times and 4.15 times respectively among 2006-2008.
Since 2009, VC firms have increased their investments in agriculture with the investment amount exceeding 2006 despite of the impact of the financial crisis.
Meanwhile, VC investment has been expanded to new agricultural sectors including production and sale of agricultural machines, eco-friendly pesticides, planting of flowers, forests and organic agricultural products and deep-processing of farming, animal husbandry and fishery products, which was limited to traditional sectors like breeding, dairy, meat processing and fertilizer two years earlier.