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VENTURE CAPITAL REPORT
VENTURE CAPITAL REPORT
The following report presents Dow Jones VentureSource’s quarterly findings for Chinese venture capital fundraising, investment, valuation, and
liquidity. The included charts and graphs offer a comprehensive view of the trends currently affecting the venture capital market.
Highlights for 4Q 2018 include:
• Equity investment retreated from the second quarter’s high point, but 2018 ended with the greatest annual total seen in any country on record.
• While U.S. investment jumped ahead of China in 4Q, on an annual basis Chinese funding exceeded the U.S. for the third consecutive year.
• Median equity deal sizes in China hit a new record at $12.3 million.
• VC fundraising was a mixed picture – activity surged from the previous quarter, but not enough to prevent a 13% year-over-year decline.
• Liquidity markets endured wild fluctuations, with both M&As and IPOs down sharply in 4Q. However, on an annual basis in terms of both capital
collected and deal flow, M&As had their best year ever; and IPOs experienced the best since 2010 in terms of amount raised.
• VC investment remained tightly concentrated in Beijing (38.8%) and Shanghai (17.4%) in amount raised.
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VENTURE CAPITAL REPORT
EQUITY FINANCING IN CHINA DIPS IN 4Q, BUT ENDS 2018 WITH RECORD-BREAKING HAUL
Equity investment in 4Q retreated significantly from the
record-breaking second quarter, but still contributed to a year
that ended as the best ever for Chinese companies. In fact,
the $139.72 billion raised across 3,725 deals in 2018 ranks as
the largest annual total seen in any country, exceeding U.S.
investment for the third consecutive year.
Median round amounts set a new record in 4Q, hitting $12.3
million. This is nearly four times the annual median from 2016,
indicating that the surge of investment is broad-based.
The top deal of the quarter was a $3 billion round for
Beijing-based Bytedance, the owner of Jinri Toutiao and Tik
Tok, is currently valued at $78 billion.
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FINANCING
Equity Financings into China-Based, VC-Backed Companies (2015–2018)
VENTURE CAPITAL REPORT
Number of Deals
VC DEAL FLOW IN CHINA-BASED, VC-BACKED COMPANIES, BY ROUND CLASS (2015–2018]
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FINANCING
VENTURE CAPITAL REPORT
Amount Raised ($B)
VC INVESTMENT IN CHINA-BASED, VC-BACKED COMPANIES, BY ROUND CLASS (2015–2018)
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FINANCING
VENTURE CAPITAL REPORT
MEDIAN DEAL SIZE FOR CHINESE COMPANIES HITS NEW RECORD IN 4Q
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FINANCINGMedian Equity Deal Size ($M)
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MAJOR SHIFT TOWARD BUSINESS & FINANCIAL SERVICES; HEALTHCARE SPARKS NEW INTERESTCompanies in the Business and Financial Services sector grabbed the largest
share of funding in 4Q, confirming a major shift in industry focus in 2018. With
44% for the quarter and 41% for the year, it was the first time this group took
first place since 2012. The top deal of the quarter in this space was a $1.44
billion growth equity round for Nanjing-based Financesn, a
payment/transactional processing company.
Consumer Services came in second place in 4Q in terms of funding, but took
the premier spot for deal flow. Bytedance had the largest round of the quarter
in this sector (and the top deal for Chinese companies overall).
Perhaps the most intriguing industry to watch is Healthcare, which soared
109% in funding and 33% in deal flow during 2018 compared to the previous
year. While companies in this space still comprise a relatively small portion of
overall VC activity, at 8.5%, there is a clear trend beginning in 3Q 2017 of
heightened investor interest.
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FINANCING4Q 2018 Industry BreakdownBy Number of Deals
4Q 2018 Industry BreakdownBy Amount Raised
VENTURE CAPITAL REPORT
TOP EQUITY DEALS FOR CHINA-BASED, VC-BACKED COMPANIES (4Q 2018)
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Company Formal Name Company Familiar Name
Location Industry Code Industry Group Brief Description Close Date Round Type Raised ($M) Round Investors
(* denotes lead)
Beijing Byte Dance Telecommunications Co.
Ltd.Bytedance Beijing General
Media/ContentConsumer Services
Provider of a personalized news aggregation and recommendation
application.
10/25/2018 VC 6th $3,000.00Technology Crossover Ventures, Softbank Group Corp.*, Primavera Capital Group*, Kohlberg Kravis Roberts & Co.
LP*, General Atlantic LLC*
Suning Finance Service (Shanghai) Co. Ltd. Financesn Nanjing Payment/Transacti
onal Processing
Business and Financial Services
Provider of financial services. 12/28/2018 Growth
Equity $1,436.99
Zhongjin Zhida, Yunfeng Qitai, Suning Holdings Group Co. Ltd., Shenzhen Capital Group Co. Ltd., Qingdao Sishiren
Investment Management LP, Qiaogeli Investment, Macrolink Group, Jiaxing Kunjia, Guangji Minghe, GP
Capital Co. Ltd., Fujian Huaxing Venture Capital
Shanghai Lujiazui International
Financial Asset Exchange Co. Ltd.
Lufax Shanghai LendingBusiness and
Financial Services
Provider of an online platform for financial
asset exchange.12/3/2018 VC 4th $1,330.00
United Overseas Bank Ltd., UBS AG, SBI Holdings Inc., Qatar Investment Authority*, Primavera Capital Group*,
Macquarie Group Ltd, LionRock Capital, JPMorgan Chase & Co., Hermitage Asia Capital Ltd., Hedosophia, Goldman
Sachs Group Inc., All-Stars Investment Ltd.
Beijing Yunshan Information Technology
Co. Ltd.Meicai Beijing
Business to Business
Marketplaces
Business and Financial Services
Operator of an agricultural products business-to-business (B2B) e-commerce
platform.
10/8/2018 VC 6th $800.00 Tiger Global Management LLC*, Shunwei Capital Partners, Hillhouse Capital Management Ltd.*
Hangzhou Netease Music Technology Co.
Ltd.
NetEase Cloud Music
HangzhouMovie/Music
Producers and Distributors
Consumer Services
Provider of online digital music
services.10/12/2018 VC 2nd $600.00
General Atlantic LLC, China Everbright Ltd., Boyu Capital Advisory Co. Ltd., Bertelsmann Asia Investment, Baidu
Inc.*
VENTURE CAPITAL REPORT
MOST ACTIVE INVESTORS IN CHINA-BASED, VC-BACKED COMPANIES (4Q 2018)
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FINANCING
Number of Deals
VENTURE CAPITAL REPORT
STRONG FINISH FOR CHINESE VC FUNDRAISING IN 4Q, BUT STILL DOWN FOR THE YEAR
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FUNDRAISING
Chinese VC Fundraising (2015–2018)Based on multiple closings
Chinese fundraising presented a mixed picture in 2018.
After starting the year with the weakest quarter since
2Q 2013, VCs achieved a powerful finish in 4Q, raising
$4.57 billion across 19 funds. Despite this, overall
fundraising ended the year down 13% compared to
2017.
Strikingly, 2018 saw a continuation of the trend toward
dramatically larger average fund sizes. In 2011, the
average fund was around $97 million; by 2018, that
figure jumped to $240 million – an increase of nearly
150% in just 7 years.
The top fund of the quarter was Hong Kong-based
DCP Capital Partners LP, securing $1.56 billion in its
first close.
VENTURE CAPITAL REPORT
TOP CHINESE VC FUND CLOSINGS IN 4Q 2018
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FUNDRAISING
Firm Name Fund Name
Amount ($M)
Closed in 4Q
Location Offering Status Fund Type Closing Type
DCP Capital Partners LP DCP Capital Partners LP $1,557.05 Hong Kong Open Early-Stage Venture Capital First
Morningside Group (Holdings) Ltd.
Morningside USD Technology Fund $1,000.00 Hong Kong Closed Early-Stage
Venture Capital Final
Gaorong Capital Gaorong Partners Fund IV LP $500.00 Beijing Closed Multi-Stage Venture Capital Final
Fortune Venture Capital Co. Ltd.
Shenzhen Fortune Chuangtong Equity Investment $471.84 Shenzhen Closed Multi-Stage
Venture Capital Final
Legend Capital Co. Ltd. Legend Information Technology Fund $256.64 Beijing Open Multi-Stage
Venture Capital First
VENTURE CAPITAL REPORT
M&A MARKET PLUNGES IN 4Q, BUT 2018 OVERALL SETS ALL-TIME RECORDS
Following the overheated second and third quarters,
M&A activity swiftly fell back to earth in 4Q with
$3.44 billion paid in 18 deals. While the amount was
26% below the 5-year quarterly average, the number
of transactions was still quite high by historical
standards – the third-largest on record, in fact.
Despite the wild quarterly gyrations, 2018 as a whole
set new records for both the number of M&A’s and
the total amount paid on an annual basis.
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LIQUIDITY
China VC-Backed M&A Activity (2015 - 2018)
VENTURE CAPITAL REPORT
TOP CHINA M&As (4Q 2018)
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LIQUIDITY
Company Name Location Brief Description Industry Code Industry Segment Industry Group Acquirer Close Date Round Type Amount Paid
($M)
Beijing InMyShow Technology Co. Ltd. Beijing Operator of a new media
platform.General Media /
Content Media and Content Consumer Services
Guangxi Fortune
Technology Co. Ltd.
12/3/2018 Reverse Merger $653.61
Inner Mongolia Mining Asset
Management Co. Ltd.
Hohhot
Provider of a mineral resources exploration and development platform for
non-ferrous metals.
Mining (Non-Energy)
Materials and Chemicals
Industrial Goods and Materials
Zhongjin Gold Co. Ltd. 11/23/2018 Acquisition $653.04
1More Acoustics Technology Co. Ltd. Shenzhen
Manufacturer of accessories for digital
equipment.
Electronic Components /
Devices
Electronics and Computer Hardware
Information Technology
Gettop Acoustic Co.
Ltd.12/4/2018 Acquisition $488.58
VENTURE CAPITAL REPORT
VOLATILE IPO MARKET SWINGS BACK DOWN IN 4Q, BUT STILL ACHIEVES BEST YEAR SINCE 2010
After vaulting into the stratosphere the previous quarter,
the Chinese IPO market fell hard in 4Q, raising just $2.97
billion across 21 offerings. While this was the lowest
quarterly amount raised in almost two years, on an
annual basis it was the most raised for VC-backed
companies since 2010, with a total of $26.74 billion. On
the flip side, the number of IPOs completed in 2018 was
the lowest figure in five years.
Shenzhen Mindray Bio-Medical Electronics (dba Mairui
Biomedical) had 4Q’s top IPO, raising $863.91 million
with a valuation of $8.64 billion.
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LIQUIDITY
Chinese VC-Backed IPO Activity (2015-2018)
VENTURE CAPITAL REPORT
TOP CHINA IPOs (4Q 2018)
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LIQUIDITY
Company Name Location Brief Description Industry Code Industry Segment Industry Group Close DateRaised
through IPO ($M)
Exchange
Shenzhen Mindray Bio-Medical
Electronics Co. Ltd. (dba Mairui Biomedical)
Shenzhen Provider of medical instruments. Surgical Devices Medical Devices and
Equipment Healthcare 10/16/2018 $863.91 SZSE: 300760
Innovent Biologics Inc. Suzhou Provider of monoclonal
antibodies.Biotechnology Therapeutics Biopharmaceuticals Healthcare 10/30/2018 $421.82 HKEX: 1801
China Great Wall Securities Co. Ltd. Shenzhen
Provider of security brokerage, trading, and
financial advisory services.
Retail Investment Services /
Brokerages
Financial Institutions and Services
Business and Financial Services 10/26/2018 $285.09 SZSE:
002939
VENTURE CAPITAL REPORT
ABOUT US
Dow Jones VentureSource helps venture capitalists, corporate development executives, investment bankers and service providers find deal and
partnership opportunities, perform comprehensive due diligence and examine trends in venture capital investment, fund-raising and liquidity. It
provides accurate, comprehensive data on venture-backed companies – including their investors and executives – in every region, industry and
stage of development throughout the world.
The investment figures included in this release are based on aggregate findings of Dow Jones' proprietary research and are contained in
VentureSource. This data was collected through surveys of professional firms, interviews with company executives, and from secondary sources.
These venture capital statistics cover equity investments into early stage, innovative companies, and do not include companies receiving funding
solely from corporate, individual, and/or government investors. Figures contained throughout the report current at time of editorial but are subject
to change without notice.
No statement herein is to be construed as a recommendation to buy or sell securities or to provide investment advice.
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VENTURE CAPITAL REPORT
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