Our resident financial expert, Mr. G. O' Rilla, actually reckons that O2O investment figures reached just over "a gorillion dollars so far in 2011."
Stats put together by ChinaVenture show that Chinese web companies of the so-called online-to-offline (O2O) variety – such as group-buy sites and e-commerce travel services – have raised a total of 7 billion RMB (US$1.1 billion) in venture capital so far this year. That rebuts widespread fears of a huge squeeze on funding for web firms, at a time of tightened credit and concerns about the financial integrity of some recent Chinese IPOs.
Among the biggest recipients of VC largesse were Qunar – courtesy of $300+ million from Baidu (NASDAQ:BIDU) – and Lashou’s $110 million from Milestone Capital and numerous other sources. Here’s the table of major investments in this sector (which we took the liberty of remaking and prettifying):
A representative of Chinese investment consultants Asimu told ChinaVenture that these O2O-based services – despite operating in fiercely competitive markets – are bolstered by their offering “the basic necessities of life,” such as food and clothing. He also pointed out that, in such a vast market, “even if you have just a one percent market share […] it’s likely that you can go public.”
That’s borne out by upcoming IPOs for Lashou (though currently being delayed) and Vancl (on course for next month).
A total of 64 O2O-based services have snagged some amount of funding this year (only eight of the biggest names are shown in the above table), which is good news. The only issue we have is that “online-to-offline” is quite a silly phrase, which relates to pretty much everything we buy on the internet. Perhaps suffice to say that e-commerce sites are being viewed – and invested in – as tomorrow’s enterprise titans. And that’s not least because as much as half of China’s poorer urbanites are already using local online shopping sites.
[Source: ChinaVenture - article in Chinese]