China’s tech groups are accumulating too much power
There is no Silicon Valley comparison to the dominance of Alibaba and Tencent
By Henny Sender
When scientist Wang Jun left BGI, among the largest genomics organisations in the world, to establish iCarbonX, his latest medtech venture, in Shenzhen well over a year ago, many early local investors vied to offer him capital.
They were led by Neil Shen of Sequoia Capital China, arguably the most impressive venture investor in China. But ultimately Mr Wang decided to take money from the social media and gaming company Tencent Holdings. He says he decided to take Tencent’s money in part because the $200m he received came with a valuation for the new company of $1bn, and in part because of the power of Tencent’s WeChat platform, which makes every one of its 900m users a potential client or source of data.
Not long ago, “princelings” such as former president Jiang Zemin’s grandson Alvin and premier Wen Jiabao’s son Winston, and other private equity investors, were the dominant players in China’s financial landscape. They had access to the best deals and garnered the highest returns. Then it was the turn of venture capital firms to accrue the big gains. But today they too are being eclipsed; nobody can compete against Tencent and its…
