Chinese tech firms take on the world

Chinese tech firms going public almost doubled from 19 to 35 last year, and the value of the listings grew from US$1.1 billion to almost US$4.4 billion.

"Chinese technology start-ups in particular have received significant investment from global venture capital firms over the past few years," said John Hughman, senior technology analyst at Ernst & Young.

"Many of these companies have now reached commercial maturity and are ready to come to market."

In sharp contrast, the value of UK technology IPOs dropped by 80 per cent over the same period from US$2 billion to US$400 million, falling from 14 listings in 2006 to just nine in 2007.

The value of technology IPOs across Europe fell by 40.6 percent, as European companies' share of the global IPO market slipped to 18.8 percent from 24 percent in 2006.

Meanwhile, the US has continued to consolidate its leading position in the technology sector. IPOs at US based companies grew from 29 in 2006 to 41 in 2007 seeing a 40 percent increase in value to US$5.8 billion.

"The spectre of recession seems to have had little effect on the US appetite for technology investment, or its ability to commercialise its strong pipeline of innovation," said Hughman.

Emerging markets were a critical driver of the market in 2007. India saw a significant increase in the number of IPOs in 2007 from four to 11 at an aggregate value of $288m, nearly twice the amount raised in 2006.

"The deep talent pools and growth opportunities within these countries suggests that this could be the start of a longer-term trend," said Hughman.

Despite the growth in new financial centres, many technology companies in emerging markets chose to launch IPOs overseas.

"The US is an attractive place for companies to come to market. Its bourses offer good liquidity and access to investors looking to participate in the Chinese growth story who are prepared to stomach the additional risk," said Hughman.

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