The following report presents Dow Jones VentureSource’s quarterly findings for Chinese
venture capital fundraising, investment, and liquidity. The included charts and graphs
offer a comprehensive view of the trends currently affecting the venture capital market.
Highlights for 3Q 2014 include:
Chinese venture capital fundraising sees substantial decline, falling to its lowest dollars raised level since 2Q 2013;
Quarterly venture investment takes dip from 2Q 2014; however, deal flow continues upward trend to reach record high;
Venture exit activity declines as number of mergers and acquisitions (M&As) and initial public offerings (IPOs) fall from 2Q 2014. Exit activity still surpasses that of the year-ago period, however.
Highlights for 3Q 2014 include:
Chinese venture capital fundraising sees substantial decline, falling to its lowest dollars raised level since 2Q 2013;
Quarterly venture investment takes dip from 2Q 2014; however, deal flow continues upward trend to reach record high;
Venture exit activity declines as number of mergers and acquisitions (M&As) and initial public offerings (IPOs) fall from 2Q 2014. Exit activity still surpasses that of the year-ago period, however.
FUNDRAISING
Chinese Venture Capital Fundraising Experiences Substantial Decline in 3Q 2014
Chinese venture fundraising declined significantly to $403 million across 9 funds during 3Q 2014. The quarter
represents the lowest fundraising accumulation since 2Q 2013 when six funds raised just $136 million.
In comparison with the same period last year, dollars raised fell by 54% while the number of venture funds completing closings declined by 18%.
Olympus Capital Holding Asia’s Environmental Partners II fund was the largest of 3Q 2014, raising $152.85 million, accounting for 38% of the total amount for the quarter.
In comparison with the same period last year, dollars raised fell by 54% while the number of venture funds completing closings declined by 18%.
Olympus Capital Holding Asia’s Environmental Partners II fund was the largest of 3Q 2014, raising $152.85 million, accounting for 38% of the total amount for the quarter.
FINANCING
Venture Capital Investment in China - 3Q 2014
Chinese venture-backed companies raised $2.8 billion in 195 deals during 3Q 2014, a 5% decline in capital
invested from 2Q 2014 despite a 50% increase in the number of deals completed.
Compared with 3Q 2013, however, dollars invested rose by 88% while deal flow increased by 61%.
Investment for the nine-month period dwarfs that of the equivalent 2013 timeframe, with $8.1 billion raised compared with $3.2 billion. Similarly, deal flow has also risen, from 282 to 442, equating to an increase of 57%.
Compared with 3Q 2013, however, dollars invested rose by 88% while deal flow increased by 61%.
Investment for the nine-month period dwarfs that of the equivalent 2013 timeframe, with $8.1 billion raised compared with $3.2 billion. Similarly, deal flow has also risen, from 282 to 442, equating to an increase of 57%.
Equity Financings into China-based, VC-backed Companies, by Industry Group
(3Q 2014)
Consumer Services companies took $1.8 billion through 91 deals during 3Q 2014, an increase of 40% in deal flow but a dip of 1% in dollars invested from 2Q 2014. The sector attracted 48% of all deals completed for the quarter and a 66% share of total amount invested.
The Business and Financial Services sector placed second for investment, receiving $414 million across 35 deals. Sector investment declined by 18% compared with 2Q 2014 despite deal flow improving by 46%. The investment figure represents a 15% share of total equity financing into China-based VC-backed companies for 3Q 2014.
The Information Technology sector raised the third highest proportion of investment during 3Q 2014. IT companies garnered $377 million across 48 deals; a 9% rise in dollars invested from the prior quarter and a 66% increase in the number of deals completed.
Consumer Services companies took $1.8 billion through 91 deals during 3Q 2014, an increase of 40% in deal flow but a dip of 1% in dollars invested from 2Q 2014. The sector attracted 48% of all deals completed for the quarter and a 66% share of total amount invested.
The Business and Financial Services sector placed second for investment, receiving $414 million across 35 deals. Sector investment declined by 18% compared with 2Q 2014 despite deal flow improving by 46%. The investment figure represents a 15% share of total equity financing into China-based VC-backed companies for 3Q 2014.
The Information Technology sector raised the third highest proportion of investment during 3Q 2014. IT companies garnered $377 million across 48 deals; a 9% rise in dollars invested from the prior quarter and a 66% increase in the number of deals completed.
LIQUIDITY
Venture M&A and IPO Market Activity in China (3Q 2014)
M&A activity for venture-backed companies in China fell in 3Q 2014 to six from seven completed during the
previous quarter, but stayed flat compared with 3Q 2013. A total of 17 M&As have been completed in the first
nine months of 2014, one up from the equivalent 2013 period.
The largest M&A of the quarter was Chinese Universe Publishing & Media’s acquisition of mobile games platform developer Beijing Elex Technology Co. Ltd. in July for $429 billion.
Nine VC-backed companies went public during 3Q 2014 in China, a decline of 18% from the previous quarter. Total dollars raised in VC-backed IPOs fell substantially from 2Q 2014, by 61% to $1.06 billion.
The largest M&A of the quarter was Chinese Universe Publishing & Media’s acquisition of mobile games platform developer Beijing Elex Technology Co. Ltd. in July for $429 billion.
Nine VC-backed companies went public during 3Q 2014 in China, a decline of 18% from the previous quarter. Total dollars raised in VC-backed IPOs fell substantially from 2Q 2014, by 61% to $1.06 billion.
Nine VC-backed companies went public during 3Q 2014 in China, two fewer than in 2Q 2014 but eight more
than the single listing completed during the third quarter of 2013.
A total of $1.06 billion were raised through Chinese VC-backed IPOs in 3Q 2014, representing a decrease of 61% from the previous quarter. A total of $5.9 billion have been raised in IPOs during the first nine months of this year, the most since the equivalent period of 2011 when $13.9 billion were raised.
Guangdong Ellington Electronics Technology Co. Ltd. had the largest IPO of the quarter, raising $222 million for its July listing on the Shanghai Stock Exchange. The printed circuit board manufacturer’s IPO represents 21% of the total raised through VC-backed IPOs in China during 3Q 2014.
A total of $1.06 billion were raised through Chinese VC-backed IPOs in 3Q 2014, representing a decrease of 61% from the previous quarter. A total of $5.9 billion have been raised in IPOs during the first nine months of this year, the most since the equivalent period of 2011 when $13.9 billion were raised.
Guangdong Ellington Electronics Technology Co. Ltd. had the largest IPO of the quarter, raising $222 million for its July listing on the Shanghai Stock Exchange. The printed circuit board manufacturer’s IPO represents 21% of the total raised through VC-backed IPOs in China during 3Q 2014.
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