FIL Capital Management Ltd, the venture capital arm of the biggest US mutual fund Fidelity Investment, invested US$13 million in a Chinese software firm Wednesday and is likely to open an office in Beijing to seek out more opportunities in China.

FIL injected US$13 million together with some other branches of Fidelity Investment into Beijing Dianji Technologies Ltd.

The company declined to reveal how much stakes of Dianji FIL took in the deal, but a company executive said it is the second biggest shareholder.

Some industrial insiders said that FIL holds about one-quarter of Dianji's stakes.

Benson Tam, executive director and principal of FIL, said China will be the focus of investment for his company.

"We also want to get rich, while China and the Chinese people are getting richer and richer," said Tam.

He added that China is the only country in Asia where his company conducts venture capital (VC) activities.

The firm is likely to open an office in Beijing in coming months to better conduct business in China.

FIL was also among a four-member consortium, which invested US$82 million into Chinese business-to-business Internet firm Alibaba.com on Tuesday.

Tam said his firm has invested in eight Chinese companies in the past years including NASDAQ-listed telecom solution provider AsiaInfo, Alibaba, Linktone.com and Dianji.

The focus of FIL in China will be on telecommunications and software.

He said some of the companies which FIL has invested in are working out initial public offerings, but it will act as a long-term investor of Dianji.

It is reported that Dianji Technologies aims to make an overseas IPO in the next year.

Dianji President Wang Zhidong said it was the right time for FIL to invest in the company, as it will be very helpful for his company's growth.

"After three years of product planning, development and marketing, we have entered a new stage to seek faster growth in larger areas," said Wang, former chief executive officer of Sina Corp and one of the most famous software developers in China.

He said his company will spend as much as 200 million yuan (US$24 million) in three years to work on the development of new products, sales and after-sales services.

The company, mainly engaged in business collaboration software, workflow management systems and e-mail software, will take on 200 new employees this year, bringing the total number to 300.

It also aims to sell more than 100,000 copies of its GK Star line in the first half of this year.

GK Star, similar to IBM Lotus Notes and Microsoft Office, allows integration of functions of e-mail software, instant messaging, online work collaboration and file management.

But Wang said the target customers will be mainly Chinese companies, where Dianji knows how best to serve them.

(China Daily February 19, 2004)