China Vanke created headlines when it said that it was 'considering an IPO.' Considered the biggest developer in China by sheer market capitalization, The Real Deal reported that the firm had already spoken with its advisers about hosting a 'share sale'. The company is eyeing raising as much as $1 billion for its IPO.
Vanke isn't the first to do this, as it joins other developers, like Country Garden Holding, in creating management units. In this business, the firm faces fewer challenges from fluctuations in policies and economic difficulties. Country Garden was initially listed, while China Aoyuan managed to raise $94 million in their Hong Kong-listed IPO.
Talks are still in the early stages so details have yet to be discussed and are not available to be revealed. The timeline and the fundraising rounds could also change as well. A representative for the prop management firm said that, as of the moment, they have no plans to put up a listing.
However, the trend in venture capital is that banks are starting to pull back. Crunchbase reported that VCs have been operating under two policies--one where founders sell their shares for deals into growing companies and one where the venture capitalists are the ones in charge, offering equity stakes into high-growth, private-listed companies.
The venture ecosystem works with money investors committing to their chosen venture. Investment also refers to money put in the investors' ventures. The trend this year, however, pointed to a lessening interest in creating venture projects. The amount invested this year was just somewhere around 8,100 funding round in the first quarter this year.
The culprit could be a weakening market in which Chinese startup equities aren't as attractive as they had been before. That doesn't mean, however, that the decline isn't felt elsewhere. The whole world shares this decline in attractive startup equities, as the North American companies have shown a weakening in contributor shares as well. Startup and new venture fundraising efforts were at a historical high, but have shown a significant slowdown in its growth.
It remains to be seen whether China Vanke has the right moves in creating an IPO for investments. What can be taken away from this, though, is those venture capitals should be taking the right time to create their IPOs, taking market environments into consideration before jumping into risky transactions.
