Asian companies launch enthusiasm for American start-ups

Alibaba Group, China's largest e-commerce company, recently spent 200 million of billions of dollars investing in Snapchat, a mobile messaging company based in California State Venice (Venice), people familiar with the matter said. The investment was valued at $15 billion trillion for Snapchat, one person familiar with the matter said. This week, Japan's Rakuten, a car-shopping start-up Lyft Inc. in San Francisco, led the company. A 530 million-dollar round of financing was carried out, valuing the latter at $2.5 billion trillion.
An investment strategy increasingly adopted by internet giants in China, Japan and South Korea has contributed to these high-priced deals. The Asian technology companies are willing to invest heavily in some of the most promising technologies, as they feel the pressure of increased competition and huge amounts of cash, investors say.
The rebound in Asian investment has prompted a surge in capital inflows into US tech start-ups. Various investors, from hedge funds to mutual funds, are scrambling to buy start-ups that have a long time to go public. The scramble for trading opportunities is driving up the valuations of untested start-ups and increasing the risk for investors.
SoftBank, Alibaba and Tencent both set up investment offices in the United States and hired investors in the U.S. to acquire stakes in companies such as Mobile software, gaming, digital media, electricity and payment technology.
These companies are increasingly competing with venture capital firms for such investment opportunities, but unlike the latter, they are motivated not to reap economic benefits, but to explore the technology industry's future stars and eventually bring important technologies back to their home countries with the world's largest Internet users.
Alibaba's investment Snapchat reflects a 50% higher valuation than the valuations reflected by other investor Snapchat last December. The deal gave Alibaba a stake in an emerging leader in mobile messaging services with more than 100 million users. Last year, Alibaba also led a 280 million dollar investment in Tango, another mobile messaging application provider, which valued more than $1 billion in tango.
In addition to high prices for start-ups, Asian tech giants are able to make deals because they promise to help us start-ups find new clients overseas.
A stake in a high valuation means that Asian companies often have to take on greater financial risk. 2013, Tencent led the network retailer Fab Inc. Investment of 165 million dollars, the deal for the start-up of the valuation of nearly 1 billion U.S. dollars. But as marketing spending is too big and business has expanded too fast, Fab was forced to sell assets at a much lower price than the above investment last month.