Medicine or Poison?
After Yellow Mobile, which was formed by 60 venture firms, another consortium has been created by 12 start-ups. As a result, the industry is paying a lot of attention to whether or not consortia will become the new model ecosystem for venture businesses.
It was announced on Feb. 10 that 500V was established by online and offline venture firms.
A total of 12 start-ups and small and medium-sized enterprises involved in investment advising, marketing, ad platforms, financial consulting, ICT solutions, mobile shopping, e-learning, and educational consulting forged partnerships through M&A deals.
So far, Yellow Mobile has been the only case where several venture firms formed a consortium. Currently, the consortium consists of 66 venture businesses. The number was only 30 in the first half of last year, but it has doubled in 6 months.
500V is a consortium composed of venture firms. It expressed its willingness to acquire 500 venture businesses in the end with 50 M&A transactions a year.
Some in the industry argue that venture firms' efforts to form a consortium are positive, calling for governmental support. On the other hand, others are worried about the entity. An official at a venture capital firm said, “Some people are still concerned about Yellow Mobile.” The official added, “If 500V cannot develop businesses of each company or close its operations after receiving investment, it won't be free from the so-called cut and run controversy.”