Are the Chinese making prescient bets on future consumer tech giants or overpaying for companies that US venture capitalists are not keen to continue invest in?

From Alibaba to RenRen to Tencent, Chinese investments into private US-based tech companies are intensifying and are already at record pace in 2013, and it looks like the activity is not going to slow. The most recent rumors have circulated around Tencent potentially investing in Snapchat which is currently backed by Benchmark Capital, Lightspeed Venture Partners and Institutional Venture Partners among others.

Between 2007 and 2013 year-to date, China and Taiwan-based investors participated in over 150 deals totaling $2.6 billion. And as can be seen below, tech deals with participation by China and Taiwan-based investors in 2013 year to date have already topped those from all of last year.

Among the recent tech investments involving big money from China-based investors are Fab.com’s $150M Series D in June (Tencent), Quixey’s $50M Series C (Alibaba Group), and JustFab’s $40M funding led by Hong Kong-based Shining Capital Management. With Alibaba forming a venture arm to exclusively invest in the U.S. market and Tencent already investing across the maturity spectrum from Fab’s round at a $1B valuation to seed deals, it appears that the rise of Chinese investors in U.S. startups is only getting going.

Interestingly, Chinese investors are also investing in consumer tech companies which US venture capital firms are increasingly shying away from in favor of enterprise.  Part of the allure of these investors according to the companies who’ve raised from them based on their public comments is their ability to offer companies access and expertise to penetrate the large Chinese and broader Asian markets.  But given Fab.com’s recent travails (layoffs, co-founder departures, numerous pivots) and the subscription eCommerce industry of JustFab doing poorly, are the bets of these Chinese investors prescient bets on future tech giants or will they be left holding the bag on companies that US venture investors decided weren’t worth continued significant investment?

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