China Arbitrage No More
Last year in march, Celsius Capital was formed to arbitrage innovation diffusion between U.S. and China. At the time it made somewhat of a sense. eBay was started in 1996 and EachNet was founded 3 years later in 1999 (I could be off a little bit) with almost exactly the same look and feel/functionality. Carlos Bhola of Celsius was an investor in EachNet so he obviously have a lot of experience with these type of investments.
However, like all arbitrage opportunities, this particular gap is closing in fast. Celsius has given up the arbitrage play (I assume atleast from China to the U.S.) with Burnham departing and is focusing exclusively on China. Private Equity Week has more. (wish them luck as I know one of the guys personally and worked with others)
The technology diffusion cycle between the U.S. and China is getting faster and faster. Almost any of the web2.0 plays have a equivalent “sister” company in China. Nothing was more clear to me than when I saw China Web2.0 Review’s coverage of OPML.CN in december. It used to be that people in China would wait until an IPO (eachNet) or series A (facebook/Xiaonei.com) to start producing similar plays but an OPML manager!!!! I haven’t even started using one and there is one in China already... my god... is this good or bad? I dont know...