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ChinaCache, a Beijing-based Internet content delivery network (CDN) operator, has secured US$31.5 million from overseas investors such as Intel Capital and Ignition Partners, thanks to the rapid development of China's Internet industry.

Shanghai-based venture capital firm Qiming Venture Partners led the investment in ChinaCache. Six other investors such as Intel Capital, the investment arm of the world's leading chipmaker, also bought stakes.

Established in 1998, ChinaCache had secured US$8.5 million in 2005 from venture investors to fund its growth.

"The rapid growth of video and audio contents on the Internet creates a huge demand for content delivery services in China," said Wang Song, ChinaCache's CEO.

The Beijing-based company stores media contents such as audio and video clips on its network, allowing Internet users to access them quicker. It runs a network covering over 50 cities across the nation and provides services to some of the largest websites in China such as Sohu.com and Xinhua.com.

The company will use the new funding to finance its network expansion. It also looks to acquire competitors to maintain its lead in the market, said Wang.

ChinaCache raked in $10 million in revenue in 2006, double that of 2005. It now claims to be the only national CDN service provider and holds more than 75 percent of the fast-growing market.

"We'll be able to keep that growth momentum for a few years, and at least quadruple our revenue before 2008," said Wang, adding that only 1 percent of Chinese websites have adopted content delivery services.

China had over 843,000 websites by the end of 2006, attracting 137 million users, said China Internet Networks Information Center (CNNIC), a quasi-government organization. The nation is also expected to overtake the United States to have the world's largest Internet population within two years.

Since 2006, several video-sharing websites have mushroomed in China, inspired by YouTube's success. Attractive to young Internet users, such websites often generate heavier traffic.

"We will try to launch an initial public offering in the US next year," said Richard Xu, the company's chief operating officer.

Limelight Networks Inc, a US-based CDN service provider, staged its debut on the NASDAQ on June 7 and its shares rose 48 percent on the first trading day.

(China Daily June 13, 2007)