CRI听力:Angel Investment Enjoys Rapid Growth in China

Xiaolong Bus is a Shanghai-based ride-hailing startup company.

Since it started operation last May, the company has so far received Angel investment worth five million yuan.

Founder of Xiaolongbus, Xiong Guanghui, says such fund-raising is crucial for startups.

"I knew our venture capital investors. They trusted our team and were willing to take a chance to invest in our company."

In the past, Chinese startups struggled to find early investors who had the networks and expertise to help entrepreneurs develop products and nurture good ideas.

Recently, the success of homegrown angel investors have given Chinese start-ups breathing space to more easily polish their ideas and craft business plans that can cross borders.

Meanwhile, China's capital market has been cooling down since the stock market turmoil last year.

According to official statistics, only a quarter of startups, which received A-round financing in 2014, were able to get further financing by the end of last year.
Emerging company Xiaolong Bus has also faced this problem.

But Xiong Guanghui says he remains confident about the upcoming A-round of financing as there are few competitors in the bus-sharing market in China.

"We have a solid business model and an efficient operational team. We have the ability to generate good results at low costs. Therefore, investors are willing to invest in such projects."

Xiaolongbus's first round of capital raising was led by ZhongXi Capital Management.

He Yufa, investment manager of the company, believes a cooling capital market may also mean an opportunity, albeit a challenging one.

"The cooling capital market means investors will be more selective about projects, but it does not have a big impact on investment directions. Seed funding and venture capital do not need large-scale initial funding, so the impact is not very obvious. If it is hard for projects to get investments, then we wind up with more choices. That is good."

To deal with the problem, the Shanghai government says it will offer subsidies for angel investors who lose money investing in small technology startups.

For CRI, this is Huang Shan.