After social, e-commerce, group-buying, and the like, venture capitalists had new categories of tech startups to chase in China in 2013.
The new hot verticals are online education, online finance, travel, among others. Mobile, of course, counts. But the businesses on mobile that have been funded are pretty similar those proven ones on desktop; for instance, gaming, advertising, and solutions for developers or enterprises.
While big Chinese Internet companies poured a ton of money into acquisitions and investments, this year was more about complementing their core businesses or strategies. Chinese venture capitalists are on the lookout for new markets or games changers.
There is a revolution in education underway in China — moving to private education and moving online. A wave of education startups raised fundings in the first half of 2013. Some of them, such as 51Talk raised big money in 2013. 51Talk’s take was a $12 million Series B round later in the year.
What’s perceived as good education in China, especially among Chinese young parents, is pretty much about good schools, from kindergarten to universities overseas. The business opportunities entrepreneurs see are in K-12 and preparing kids for studying abroad. Gong Haiyan, founder of dating site Jiayuan, decided to enter the education market starting with an online English-learning site but shifted to a K-12 e-learning platform.
Others that have been funded include education app developers and services with Western models in online education. As for online teaching platform, it seems this trend will continue to flourish in 2014.
Big names like Sequoia China and IDG Capital Partners laid eyes on Internet-based finance early on. In 2013, VCs showed interest in personal finance apps (Wacai, Tongbanjie), credit card management apps (Kaniu, 51zhangdan), online financial product aggregation & search (Rong360, 91jinrong), and financial social media (Snowball Finance), among others.
One example is Bitcoin Trading Platform BTC China, which raised $5 million this past year.
Developer-facing services pocketed a lot of funding in this year. That includes mobile data analysis (TalkingData raised a Series A round, while its direct competitor Umeng was acquired by Alibaba), mobile advertising (Youmi announced RMB100 million in new financing), mobile app security (Bangcle raised a Series B), SDK/API developers (social sharing SDK seveloper ShareSDK, voice recognition service Yunzhisheng, Face recognition solution Face++, indoor map Palmap+), and mobile payment (Mobile game payment service Mo9).
As game developers found that it wasn’t so hard to make money from mobile games, it’s no wonder there were so many acquisitions and investments in this sector. Mobile game developer Chukong raised $50 million in a Series D; Game publisher Yodo1 raised $11 million in a Series B; HTML5 game developer UZwan received a Series A; Ejoy secured 100 million Yuan financing; and mobile social game developer Hortor Soft raised a Series A.
Crazy buys in both mobile gaming and web-based gaming include Zhongqingbao, which acquired stakes in two mobile game companies for 440 million Yuan.
Also, Alpha Animation acquired 51 Pocket and 5agame for 692 million Yuan; Ourpalm acquired Playcrab and Shanggame for 2.55 billion yuan and web game developer Dovo.
It is believed that there’s still a big opportunity in travel markets in and outside China. Startups that have received funds in this year include B2B tourism service 8trip, outbound tourism service Shijiebang, social travel service Mafengwo, travel guide service Tuniu, and hotel app Economy Hotel Manager.
Online to offline lifestyle services
Funded startups in this category are working on housekeeping (Ayibang), online food ordering (Etaoshi, Ele.me), food delivery (Daojia), movie tickets and info (Gewara, Mtime), pet owners (Petta), weddings (591wed), and maternal needs (Spice Moms).
Yes, there are many investments in taxi apps and car rentals, thanks to Uber. Also Airbnb-style services are not dying in China but evolving with new fundings (Mayi, Tujia).
What will be hot in 2014? Some venture capitalists see enterprise-facing services will be and have taken hold in China (enterprise social service Mingdao, software provider Facishare)
This story originally appeared on TechNode. Copyright 2013