Intel Capital's New China Ventures Could See IPO's (INTC)

Intel Corp. (NASDAQ: INTC) has announced full details for its venture capital arm’s Intel Capital global venture investment activities in China with the launch of a second China investment fund.   The Intel Capital China Technology Fund II is a new US$500 million fund that will invest in wireless broadband, tech, media, telecom, and clean tech ventures that it believes will complement and expand Intel’s corporate initiatives and technology efforts in China.

Intel Capital has invested in more than 70 companies since 1998 acrossChina and Hong Kong.  Intel Capital’s first $200 million Intel CapitalChina Technology Fund (created in 2005) has been fully invested inlocal Chinese companies. The new fund has announced two new Chineseinvestments with the fund: Holdfast Online Technology Co. Ltd. andNewauto Video Technology Inc.

Some of the other investments include: Neusoft Group, Supcon Group, A8Music, Chinacache International, Chipsbank Microelectronics, DAC,HiSoft Technology International, Kingsoft, Legend Silicon, MontageTechnology, and Palm Commerce.

Notable liquidity events involving portfolio companies from the firstfund include Actions Semiconductor, Kingsoft, and Neusoft Group.  Whatmay be interesting is that Intel is considering a listing of thecompanies it has invested in on a growth enterprise share market.  Thatmay be in context and overall regardless of how well these investmentsdo it isn’t enough size to matter that much for Intel’s $123 Billionmarket cap.  But it would at least create a wave of potential hot IPO’sif Intel is in their back pockets, and it would create a rollingliquidity drawer that Intel could reuse over and over for its Chinainvestment activities.

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Jon C. Ogg
April 8, 2008

Jon Ogg produces the Special Situation Investing Newsletter.  He can be reached at [email protected] and he does not own securities in the companies he covers.