As an outsider, I often picture VCs, mostly male, are a bunch of speculators, albeit scientifically, analytically and innovatively driven. And I also imagine VCs’ confidence is the key to their risky games and an indicator of next trends or bubbles. So here comes this global survey to check upon their confidence level, and I am quite struck by the results regarding China market for new media and SNS.

2013 Global venture capital confidence survey results” was just released this month, and conducted jointly by Deloitte & Touche LLP and the National Venture Capital Association, covering respondents in the following regions: the Americas, Europe, Middle East, and Asia Pacific.

It is a 75 pages long comprehensive report. And according to its results overall confidence level of investing in China is abating.

But what really caught my eyes is page 45,“Overall confidence in VC investing in the New Media/Social Networking sector”. The key finding is generally speaking, New Media/SNS still scored well, around 3.4, but saw an 8% decline year over year. (Bear in mind, the Confidence levels were measured on a scale of 1-to-5, with a score of 5 representing the most confidence)

And the most interesting part is while most revealed their declined confidence in New Media/SNS, China respondents for this sector still rose, 16% increase compared with last year, with the highest confidence score around 4. For a vivid contrast, respondents in India are the reverse situation, 16% decrease in confidence level with the score around 3.

The New Media/SNS industry is actually categorized into 7 sub-sectors along with their overall confidence scores:

  • Payments                                    3.48
  • E-commerce                                  3.34
  • Digital Content Provider                         3.32
  • Enabling Tools (including GPS/ Location Services)    3.32
  • Ad technology                                3.11
  • Search                                      2.78
  • Gaming                                     2.76

Among them, China VC confidence hit highest score in:

  • Gaming  4.0
  • Digital Content Providers 4.0
  • Ad technology 3.8

So how come when most countries are starting to show sign of disinterests in New Media/SNS, China VCs are still ready to up the ante? Is it because China is truly full of potentials in that sector or these China VC boys are blindly blowing this particular rosy bubble? Really intriguing to think about it, even for an outsider like me. Of course certain data might be skewed due to low number of respondents in the report.



By Cécilia Wu
English & Chinese Editorial Manager