Reuters - U.S. venture capital fund Revolution Ventures plans to open a Beijing office soon to boost Asian deals, with a focus on the education and learning sectors in China and India, a partner of the fund said.
Revolution Ventures, which has tie-ups to co-invest with U.S. technology giants such as Intel Corp and Cisco Systems Inc will also focus on entertainment, gaming, digital advertising and wireless sectors in the region, said Robert Hutter, a partner of the fund.
“The education space is driven by peoples’ drive to improve themselves, and families particularly tend to focus on education for their children in times of economic worry,” Hutter said in an interview for the Reuters Global Finance Summit.
Last month, British private equity firm Actis led a consortium investing $103 million in China’s Ambow Education, which targets middle-school students who aspire to a coveted place at a Chinese university.
Private capital investors, betting that Asia’s obsession with childhood education is recession-proof, are increasingly investing in the fast-growing private learning sector.
Revolution Ventures, based in California, manages three venture capital funds, and began to invest in Chinese companies starting with its second fund in 2004.
The firm targets early-stage companies or entrepreneurs with innovative ideas, and the fund usually invests between $500,000 and $10 million for a single investment case, said Hutter.
Hutter is traveling in China this week to meet Chinese entrepreneurs and visit its local investment portfolio, including InGame Ad Interactive Technology Ltd, which helps companies to use online games as a medium to deliver advertising.
While China’s economic growth has cooled amid the worst U.S. financial crisis since the Great Depression, it is still growing faster than any other big country, with plenty of capital-hungry entrepreneurs looking to fund their projects.
“(The financial crisis) can make a challenge but this is also the best time to go shopping for opportunities,” said Hutter, who is a board member of many of the fund’s portfolio companies, including Smartdrive Systems and Quantcast.
“If you have good product, you can still grow. When the market recovers, it will be fantastically great,” he said, adding education can be a “recession neutral” area for investments.
In September, Revolution Ventures and WPP, the world’s second-biggest advertising and marketing group, made a joint investment for Shanghai-based InGame Ad.
Hutter said the fund is keen to invest in the digital advertising sector for the next few years as the economic crisis will further hurt the growth of traditional media, for instance, newspaper and television, but may bring new customers to firms which offer more cost-effective solutions like InGame Ad.
Revolution Ventures U.S. portfolio includes online dating services provider Engage.com and Entropic Communications Inc, in which Time Warner Inc also has a stake.
