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  • V E N T U R E C A P I T A L R E P O R T

    Venture Capital Report C h i n a | 4 Q | 2 0 1 6

  • V E N T U R E C A P I T A L R E P O R T

    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 2016 include:

    • Both the venture capital fundraising amount and the number of funds in China dropped from the previous quarter;

    • Venture capital investment into Chinese companies climbed slightly from 3Q 2016, while the number of deals declined;

    • Amount raised through mergers and acquisitions (M&As) experienced a significant decrease from last quarter, while capital raised via initial public offerings (IPOs) increased dramatically.

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  • V E N T U R E C A P I T A L R E P O R T

    CHINESE VENTURE CAPITAL FUNDRAISING DECREASES IN 4Q 2016

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    FUNDRAISING

    Chinese VC Fundraising (2013–2016) Based on multiple closings

    Chinese venture fundraising reached $0.59 billion across 6 funds in 4Q 2016. Compared with 3Q 2016, total capital raised dropped significantly by 69%, while the number of fund closings declined by 25%.

    • In comparison with the same period last year, dollars raised dropped by 47%, the number of funds closed declined by 50%. This quarter reached the lowest amount in 2016 for Chinese VC Fundraising.

    • Qiming RMB Fund IV LP was the largest China-based venture fund of 4Q 2016, raising $217.56 million and accounting for 37% of the total amount raised in funds during the quarter.

    4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 Amount Raised ($B) $1.22 $0.79 $4.07 $0.84 $1.21 $2.78 $1.66 $1.80 $1.10 $1.92 $1.46 $1.92 $0.59

    Number of Funds 16 10 19 12 17 18 23 14 12 9 12 8 6

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  • V E N T U R E C A P I T A L R E P O R T

    LARGEST VC FUNDS RAISED IN 4Q 2016

    4

    FUNDRAISING

    Firm Name Fund Name Amount ($M) Closed in 3Q Location Offering Status Fund Type Fund Category Closing Type

    Qiming Venture Partners Qiming RMB Fund IV LP $217.56 Shanghai Closed Multi-stage venture capital Venture Capital Final

    CMC Capital Partners CMC Capital Partners II $182 Beijing Open Multi-stage venture capital Venture Capital First

    Long Hill Capital Management Long Hill Capital Venture Partners 1 LP $125 Shanghai Closed Early-stage venture capital Venture Capital Final

    CanWell Fund CanWell Fund $29.98 Beijing Open Multi-stage venture capital Venture Capital First

    Huiyin Blockchain Ventures Huiyin Blockchain Venture Capital Fund $20 Shanghai Closed Multi-stage venture capital Venture Capital Final

    Wuhu Iflytek Investment Management LLP Anhui Iflytek Venture Capital LLP $13.08 Hefei, Anhui Open

    Multi-stage venture capital

    Venture Capital First

  • V E N T U R E C A P I T A L R E P O R T

    VENTURE CAPITAL INVESTMENT INCREASES IN CHINA DURING 4Q 2016

    In 4Q 2016, equity financings into China-based companies raised more than $7 billion across 464 deals. Compared to 3Q 2016, the capital raised climbed by 1%, while the number of deals decreased by 4%.

    • Compared with the same period last year, both dollars invested and the number of deals went down, 33% and 16% respectively.

    • Consumer Services remained the strongest sector in terms of attracting investment and deal flow.

    5

    FINANCING

    Equity Financings into China-based, VC-backed Companies (2013–2016)

    4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 Amount Raised ($B) 1.69 2.73 5.04 4.20 7.54 9.24 11.24 16.43 11.24 12.32 12.97 7.42 7.50

    Number of Deals 189 202 248 365 441 409 544 583 554 439 500 481 464

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  • V E N T U R E C A P I T A L R E P O R T

    Number of Deals

    EQUITY FINANCINGS INTO CHINA-BASED, VC- BACKED COMPANIES, BY ROUND CLASS (2013– 2016)

    6

    FINANCING

    4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 Seed 20 38 39 49 59 70 52 75 57 43 42 76 46

    First 110 108 118 207 235 202 289 288 272 204 224 209 209

    Second 21 29 53 60 77 67 105 130 125 101 119 93 84

    Later 31 20 23 40 44 48 64 56 63 68 85 64 65

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    4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 Seed 19 26 52 44 55 75 52 79 41 55 37 84 40

    First 568 574 788 954 1,439 1,538 1,656 3,774 2,283 1,391 1,326 1,516 1,667

    Second 229 632 998 1,200 1,781 1,843 4,047 3,355 1,723 1,580 1,519 1,950 1,297

    Later 854 539 2,132 1,925 3,801 5,529 4,347 8,665 5,111 8,700 9,622 3,219 3,088

    Restart 20 2 58

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    EQUITY FINANCINGS INTO CHINA-BASED, VC- BACKED COMPANIES, BY ROUND CLASS (2013– 2016)

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    FINANCING

  • V E N T U R E C A P I T A L R E P O R T

    EQUITY FINANCINGS INTO CHINA-BASED, VC-BACKED COMPANIES, MEDIAN DEAL SIZE [$M] (2013–2016)

    8

    FINANCING

    Median Equity Deal Size ($M)

    4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 Median Equity Deal Size ($M) $3.75 $4.00 $5.94 $4.51 $5.00 $5.00 $4.99 $5.00 $5.50 $6.29 $4.84 $4.52 $5.00

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  • V E N T U R E C A P I T A L R E P O R T

    EQUITY FINANCINGS INTO CHINA-BASED, VC- BACKED COMPANIES, BY INDUSTRY GROUP (4Q 2016)

    Consumer Services companies remained the strongest sector during 4Q 2016. It attracted $2.5 billion via 194 deals. Compared to last quarter, amount raised is down by 10% while the number of deals dropped by 6%. The sector attracted a 33% share of total deals invested for the quarter.

    Business and Financial Services ranked second. The sector garnered $2.3 billion across 122 deals, a 6% increase in dollars raised and a 5% increase in deal flow compared to the prior quarter.

    Information Technology placed third, receiving nearly $1.9 billion across 96 deals. Sector investment climbed from 3Q 2016 by 7%, while the number of deals increased by 1%.

    9

    FINANCING 4Q'16 Industry Breakdown By Number of Deals

    4Q’16 Industry Breakdown By Amount Raised

    26%

    3%

    42%

    0% 6%

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    21%

    Business and Financial Services

    Consumer Goods

    Consumer Services

    Energy & Utilities

    Healthcare

    Industrial Goods & Materials

    Information Technology

    31%

    1%

    33%

    0%9%

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    25%

    Business and Financial Services

    Consumer Goods

    Consumer Services

    Energy & Utilities

    Healthcare

    Industrial Goods & Materials

    Information Technology

  • V E N T U R E C A P I T A L R E P O R T

    TOP 5 DEALS INTO CHINA-BASED VC-BACKED COMPANIES (4Q 2016)

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    FINANCING

    Co. Name Location Industry Code Industry Segment Industry Group Brief Description Close Date Round Type Raised ($M)

    Round Investors (* denotes lead)

    Xuanyixia (Beijing) Technology Co. Ltd.

    (Miaopai) Beijing Communications Software Software Information Technology

    Provider of video playing and sharing software for mobile phones. 11/21/2016 5th 500.00

    Advantech Capital Partners Ltd., Axiom Asia Private Capital Pte Ltd., Beijing Weiyingshidai Technology Co. Ltd., China Everbright Ltd., Fenghuang Investment, iDreamSky Capital, Shanghai Media Group Broadband, Shanghai Television, Sina Weibo Fund*

    Zhuhai Yinlong New Energy Ltd. (Yinlong

    Group) Zhuhai Power Supplies Electronics and Computer Hardware Information Technology

    Manufacturer of lithium-ion batteries. 12/15/2016 Corporate 435.98

    Beijing Yanzhao Huijin International Investment Co. Ltd., China International Marine Containers Co. Ltd., Individual Investor(s), JD.com Inc., Wanda Group

    Shouqi Rental Co. Ltd. (Izuche) Beijing

    Transportation Services Travel and Leisure Consumer Services

    Provider of online-to-offline (O2O) car rental services. 12/27/2016 Later 312.45

    CCB International Holdings Ltd., Taiping Asset Management Co. Ltd.*, Tianan Property Insurance Co. Ltd., Zimu (Beijing) Fund Management Co. Ltd.

    Yisheng Financial Service Holding Group Co. Ltd.

    (Easylife Financial Services; Easypay)

    Beijing Personal /

    Commercial Banking

    Financial Institutions and Services

    Business and Financial Services Provider of travel financial services. 12/29/2016 3rd 276.12

    CapitaLand Fund Investment, Chongqing Aviation Investment Tourism Development Fund, H Capital Online, Jining Culture &am

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