MoneyTree China TMT Report TM

PricewaterhouseCoopers Zhong Tian LLP
MoneyTreeTM
China TMT Report
Q1/Q2 2015
Data source: Zero2IPO Research
Technology Institute
This MoneyTreeTM China
Telecommunications, Media and Technology
(TMT) Report includes information on
private equity and venture capital (PE/VC)
investment in the TMT industry for Q1/
Q2 2015, as well as 2014, 2013 and Q3/Q4
2012.
www.pwccn.com
www.pwc.com/globalmoneytree
Table of contents
1. Overview
4
2. PE/VC investments in the TMT industry
5
TMT industry investments compared to all industries
5
Investments by quarter
7
Investments by sector
8
First-time funding compared with follow-on funding
11
Investments by stage of development
13
Investments by region
16
3. PE/VC exits in the TMT industry
17
Exits by quarter
17
Exits by type
18
Exits by sector
20
4. Sector focus: Technology, Internet, and
Telecommunications and Mobile
21
Investments in Technology
21
Investments in Internet
27
Investments in Telecommunications and Mobile
33
5. A close look at investments in Mobile
37
6. Methodology and definitions
40
7. Contacts
42
1. Overview
In the first half (H1) of 2015, the
Telecommunications, Media and
Technology (TMT) industry in China
continued the good momentum
developed in second half (H2) of 2014.
The “Internet +” theory gradually took
hold in various traditional industries,
prompting new business models to
emerge while developing enterprises
continued to expand, attracting capital
from institutional investors. The TMT
industry is now one of the fastestgrowing industries in China.
In H1 2015, overall private equity and
venture capital (PE/VC) investment
soared from its early lows, and an
investment spurt occurred in the
second quarter of the year (Q2). The
overall investments were far above
the full-year total of 2014 due to
the implementation of government
entrepreneurship and innovation
incentive policies. The overall
investments in H1 2015 slightly
decreased by 7% to US$25.40 billion
compared to H2 2014, but remained
high. In terms of the specific industry,
both deal volume and deal value in the
Medical, Finance and TMT industry in
H1 2015 increased significantly.
Investments in TMT companies in
H1 2015 were almost the same as
the full-year total of 2014, and the
number of investments increased by
44% compared to H2 2014. As the
hotspot of all industries, and under
the impact of wealth effect brought
about by booming stock markets and
the New Third Board, TMT industry
investments reached a historical high
since 2012 in both deal value and deal
volume.
In H1 2015, investments in both
the Technology industry and the
Entertainment and Media industry
were outstanding, and significantly
increased in both deal value and
volume. This was mainly due to
the occurrence of several large
investments.
It is worth noting that there were 32
TMT deals with values over US$100
million, three of which exceeded
US$1 billion with the largest single
Wilson Chow
PwC China & Hong Kong TMT
Leader
4
MoneyTree
TM
China TMT Report Q1/Q2 2015
deal of US$1.63 billion for the initial
investment in an electronic and optical
equipment enterprise mainly for the
manufacturing and development of
integrated circuits. These enterprises
attracted generous investments due
to their rapid development, many of
which were at expansion or PIPE stage.
In H1 2015, the exit volume of IPOs
reached 34, accounting for 69% of
all TMT industry exits and the main
method of exit. With respect to the
selection of listing areas, IPO in the US
is no longer as popular an exit strategy
just as we previously predicted. In H1
2015, the Chinese A-share (especially
Growth Entherprise Market [GEM])
market was hot; IPO volume was up to
28 deals, representing 82% of the total.
In H1 2015, both the IPOs of the TMT
industry and Chinese A-share reached
a historical high since 2012. However,
the exits through IPO have become
much more difficult due to fluctuations
in the capital markets.
While constantly changing people’s
way of life and work efficiency,
the TMT industry is also having
revolutionary impact on the operating
models of enterprises. With smart
terminals permeating our daily
life, various traditional ways of
life and working modes have been
fundamentally changed via Mobile,
and many traditional industries have
been closely linked to TMT at an
accelerated speed. Going forward,
thorough analyses of high-risk and
high-yielding TMT companies and
investment value will be critical to
effective and responsible investment
decision-making in the TMT
industry. This report endeavors to
provide a clear understanding of
PE/VC investment and exit strategy
in the TMT industry as a whole
and the Technology, Internet and
Telecommunications and Mobile
segments individually, as well as
to highlight potential trends in the
market.
If you would like to discuss your
thoughts and ideas about this report,
please contact us. We are looking
forward to hearing from you.
Jianbin Gao
PwC China Technology Industry
Leader
2. PE/VC investments in the TMT
industry
TMT industry investments compared with all industries
The overall industry investment in H1
2015 dropped compared to H2 2014,
but remained on an upward trend.
Total TMT deal value and volume
accounted for 61% and 45% of overall
industry investment, respectively.
In Q1, the deal value of overall PE/VC
dropped significantly while the deal
volume surged and single deal value
decreased significantly. The average
single deal value in the TMT industry
remained on an upward trend.
In Q2, the deal value and volume of
overall PE/VC investments surged
abruptly, and the overall trend was
optimistic. The gross investment and
average single investment in the TMT
industry rose greatly.
In Q1 2015, despite PE/VC deal value
seeing a 25% downturn quarter over
quarter (QoQ), the deal volume
increased by 52%, and the average
single deal size was only US$9 million,
a drop of 51% QoQ. TMT industry
remained the high speed development
trend of 2014, with the deal value
significantly increasing by 61% to
US$7.58 billion, and the deal volume
increasing from 371 deals in Q4 2014
to 635 deals in Q1 2015, up 71%. Both
the deal value and volume reached a
new high since 2012. The average
single deal value in the TMT industry
was US$18.08 million, up 19%
compared to Q1 2014.
In Q2 2015, PE/VC deal value
significantly increased by 101% and
deal volume increased by 80% QoQ to
1,623 deals, with an average single
deal value US$10 million, an increase
of 12% compared to Q1 2015. In Q2,
the deal volume in the TMT industry
was 491 deals. Despite a slight
decrease in deal volume, the deal value
and average single deal value still
increased significantly to US$7.98
billion and US$20.26 million,
respectively. Both overall PE/VC
investment and TMT industry
investment in H1 2015 were at a high
level and continued the strong
momentum of 2014. Deal value and
volume in the TMT industry reached a
historical high since 2012.
PwC Viewpoints
Overall investment in H1 2015 had the following characteristics:
1. In H1 2015, overall PE/VC investment soared from the early lows and an investment spurt occurred in Q2 2015.
2. In H1 2015, the volume of overall investment enterprises was far above the full-year total of 2014 due to the
implementation of entrepreneurship and innovation incentive policies encouraged by the government. The overall
investments in H1 2015 slightly decreased by 7% to US$25.4 billion compared to H2 2014, but remained high. In
terms of the specific industry, both deal volume and deal value in the Medical, Finance and TMT industries in H1
2015 increased significantly.
3. Investment enthusiasm was extremely high in H1 2015. As the hotspot of investment in all industries and under
the impact of the wealth effect brought about by booming stock markets and the New Third Board, TMT industry
investments reached their highest point since 2012 in both deal value and deal volume. In Q1, the deal value and
volume in the TMT industry accounted for 90% and 70% of the total, respectively; in Q2, the proportions declined
to 47% and 30% respectively. This was mainly due to the significant increase in Medical and Finance industry.
MoneyTree
TM
China TMT Report Q1/Q2 2015
5
Overall PE/VC investments
In Q1 2015, China saw a total of 902
PE/VC investments across all
industries totalling US$8.44 billion.
This was an increase of 52% by
volume, but a decline of 25% by value
compared to Q4 2014.
In Q2 2015, there were a total of 1,623
PE/VC investments, which represented
an increase of 80% compared to Q1
2015. The deal value of US$16.96
billion increased by 101% compared to
Q1 2015.
Figure 1: Comparison of PE/VC investments and TMT investments Q3
2012-Q2 2015 (Deal value)
US$m
18,000
$17,612
$16,084
16,000
$16,958
14,000
12,000
10,000
$11,230
$10,360
8,000
$6,675
6,000
$5,346
$3,535
$3,449
$1,281 $1,167
2,000
0
$5,868
$4,214
$3,448
$3,240
4,000
$8,438
$7,981
$7,575
$7,531 $7,284
$752
$1,908
$4,706
$2,304
Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14 Q3’14 Q4’14 Q1’15 Q2’15
PE/VC funding in all industries
PE/VC funding in TMT industry
PE/VC investments in TMT
In Q1 2015, there were 635 PE/VC
investments in the TMT industry,
accounting for 70% of total volume
across all industries. The deal value of
US$7.58 billion represented 90% of the
total PE/VC deal value in the
corresponding period.
In Q2 2015, the number of TMT
investments reached 491, accounting
for 30% of total PE/VC volume.
Meanwhile, deal value was US$7.98
billion, representing 47% of the total
PE/VC deal size PE/VC investments.
Figure 2 : Comparison of PE/VC investments and TMT investments Q3
2012-Q2 2015 (Deal volume)
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
1,623
902
618
496
476
314
255
192
257
157
463
336
259
190
230
269
635
411
245
593
412
371
491
214
Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14 Q3’14 Q4’14 Q1’15 Q2’15
PE/VC deal volume in all industries
6
MoneyTree
TM
China TMT Report Q1/Q2 2015
PE/VC deal volume in the TMT industry
Investments by quarter
In Q1 2015, there were 635 deals in the
TMT industry, a rise of 71% over Q4
2014. The deal value amounted to
US$7.58 billion, an increase of 61%
compared to Q4 2014.
In Q2 2015, there were 491 deals, a
drop of 23% compared to Q1 2015. The
deal value amounted to US$7.98
billion, up 5% compared to Q1 2015.
In Q1, the deal volume reached the
highest figure since 2012
In Q1, the deal value and volume in
TMT industry rose sharply by 61% and
71%, respectively, compared to Q4
2014, and the deal volume reached a
new record since 2012. There were 16
deals over US$100 million, and the
largest single deal was US$1.63 billion.
In Q2, the deal value reached almost
US$8 billion, a historical high since
2012.
In Q2, the deal value in TMT industry
increased by 5% to US$7.98 billion
compared to Q1, hitting a record high
since 2012, while deal volume
decreased by 23% compared to Q1.
Therefore, the average single deal
value increased by 12% compared to
Q1. In Q2, there were also 16 deals over
US$100 million, and the largest single
deal was US$1.28 billion.
Figure 3: TMT investments by quarter Q3 2012-Q2 2015 (Deal volume/Deal
value)
US$m
9,000
8,000
$7,575
7,000
$5,346 411
5,000
3,000
2,000
1,000
$7,981 600
500
6,000
4,000
700
635
$3,449
$3,448
255
230
192
157
$1,281 $1,167
190
$1,908
269
$3,535
245
491
$4,706
400
371
300
200
$2,304
214
100
$752
0
0
Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14 Q3’14 Q4’14 Q1’15 Q2’15
Deal value
Deal volume
PwC Viewpoints
In H1 2015, the high-speed development trends in the Chinese IT industry and
Internet companies from 2014 continued, and the overall TMT investment
increased rapidly, with the deal volume and value reaching the highest figure
since 2012. It was also noted that there were three deals with single deal value
exceeding US$1 billion in the Technology and Entertainment and Media sectors.
From the point of PE/VC, the TMT industry will continue to be a hotspot.
In Q1 2015, investments were mostly concentrated in the Semiconductor,
e-commerce and network marketing subsectors, while radio & television and
digital television took over first place in Q2. There were 32 TMT deals with
a single deal value of over US$100 million in H1 2015, a historical high since
2012. Therefore, the average single deal value in H1 2015 increased by 31%
compared with H2 2014.
MoneyTree
TM
China TMT Report Q1/Q2 2015
7
Investments by
sector
The TMT industry is divided into the
following sectors: Technology,
Internet, Telecommunications and
Mobile, and Entertainment and
Media.
The average single deal value in H1
2015 was approximately twice that of
H2 2014. The deal value in Q1 2015
was US$2.39 billion, second only to the
historical high value of US$2.81 billion
in Q2 2014. The deal value in Q2 2015
decreased by 32% compared to Q1;
however, the deal volume increased by
5% to 125 deals compared to Q1 2015,
a new record high since 2012.
The Internet sector has always been
the hottest investment area in the TMT
industry and was outstandingly
successful in H1 2015. There were 288
investments with a total investment
value of US$3.82 billion in Q1,
reaching a record high since 2012. The
deal volume and value in Q2 decreased
by 20% and 28%, respectively,
compared to Q1.
The Telecommunications and Mobile
sector posted average performance in
H1 2015. In Q1, average single
investment value decreased by 72%;
the deal value decreased by 48%
compared to Q4 2014 but the deal
volume increased by 84%. In Q2, the
deal value and volume declined by
34% and 50%, respectively, compared
to Q1 2015.
Figure 4: Deal value comparison in TMT sectors Q3 2012-Q2 2015
US$m
9,000
8,000
6,000
TM
$5,346
$4,706
5,000
4,000
$3,448
$3,449
3,000
2,000
$1,281
1,000
$2,304
$1,908
$1,167
$3,535
$752
0
Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14 Q3’14 Q4’14 Q1’15 Q2’15
Entertainment and Media
Internet
Technology
Telecommunications and Mobile
Figure 5: Deal volume comparison in TMT sectors Q3 2012-Q2 2015
350
288
300
230
250
190
200
150
100
In Q1 2015, among the 16 deals over
US$100 million, the Internet sector,
Technology sector, and the
Telecommunications and Mobile sector
accounted for 75%, 19% and 6%
respectively. In Q2, among the 16 deals
over US$100 million, the Internet
sector, the Telecommunications and
Mobile sector, the Entertainment and
Media sector, and the Technology
sector represented 44%, 25%, 19% and
12%, respectively.
MoneyTree
$7,981
7,000
In Q2, the deal volume in the
Entertainment and Media sector
increased by 55%, and the deal value
surged 4,279% QoQ to US$2.74 billion,
reaching the magnitude of billions for
the first time.
8
$7,575
China TMT Report Q1/Q2 2015
50
0
75
77
66
37
69
48
50
25
75
67
38
36
57
16
45
13
74
112
94
76
67
68
22
31
76
48
9
112
208
170
113
119
87
75
40
94
15
125
105
78
10
20
31
12
Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14 Q3’14 Q4’14 Q1’15 Q2’15
Internet
Technology
Telecommunications
and Mobile
Entertainment and Media
PwC Viewpoints
Overall, in H1 2015:
The Internet still occupied the dominant position in terms of deal volume
and value;.
The Entertainment and Media sector emerged as a dark horse. In Q2,
the deal value in the Entertainment and Media industry increased
significantly, almost leveling with the Internet industry. It is also worth
noting that there were two investments in content companies with
single deal values of over US$1 billion, representing the emphasis on
the content of entertainment and media. The main investment targets
in Entertainment and Media sector were still large-scale enterprises.
Usually, the deal volume was small but the single deal value was large.
Average single deal value in the Technology industry remained high.
In H1 2015, the largest investment deal of US$1.63 billion, which was
made in an electronic and optical equipment enterprise mainly for
the manufacturing and development of integrated circuits, was in the
Technology industry, keeping the investments in the Technology industry
at a high level.
Investment value of H1 2015 in the Telecommunication industry was
relative low compared with that of H2 2014; however, the investment
quantity was only secondary to the Internet industry, showing a good
increase.
The deal value in Telecommunications and Mobile sector declined,
compared to H2 2014. This was due to the high valuation of enterprises
in this sector in Q1 2015, but the investors cooled down in Q2 2015.
Meanwhile the deal volume was only second to that in Internet sector,
maintaining a good trend.
Q1 2015
Total deal volume for the TMT industry
reached 635 deals, with a total value of
US$7.58 billion.
Deal volume by sectors:
Internet: 288 deals, 45% of the total.
Telecommunications and Mobile: 208
deals, 33% of the total.
Technology: 119 deals, 19% of the total.
Entertainment and Media: 20 deals, 3% of
the total.
Deal value by sectors:
Figure 6: Deal volume in TMT sectors
Q1’15
Technology: US$2.39 billion, 32% of
the total.
288
45%
Telecommunications and Mobile:
US$1.31 billion, 17% of the total.
20
3%
119
19%
Internet: US$3.82 billion, 50% of the
total.
208
33%
Internet
Telecommunications and Mobile
Technology
Entertainment and Media
Entertainment and Media: US$63
million, 1% of the total.
Figure 7: Deal value in TMT sectors
Q1’15 (US$m)
$3,816
50%
$63
1%
$1,308
17%
$2,389
32%
Internet
Telecommunications and Mobile
Technology
Entertainment and Media
QoQ comparison between Q4 2014
and Q1 2015
Deal
volume
Deal
value
Technology 技
53%
316%
Internet联网
69%
144%
Telecommunications
and Mobile
84% 联网
48% 联网
Entertainment
and Media
100%
8%
MoneyTree
TM
China TMT Report Q1/Q2 2015
9
Q2 2015
Deal volume by sector:
Deal value by sector:
Total deal volume of the TMT industry
reached 491 deals, with a total deal
value of US$7,981 million.
Internet: 230 deals, 47% of the total.
Internet: US$2.75 billion, 35% of the
total.
Telecommunications and Mobile: 125
deals, 26% of the total.
Technology: 105 deals, 21% of the total.
Entertainment and Media: 31 deals,
6% of the total.
Entertainment and Media: US$2.74
billion, 34% of the total.
Technology: US$1.63 billion, 20% of
the total.
Telecommunications and Mobile:
US$859 million, 11% of the total.
Figure 8: Deal volume in TMT sectors
Q2’15
Figure 9: Deal value in TMT sectors
Q2’15 (US$m)
230
47%
$2,752
35%
$859
11%
31
6%
105
21%
125
26%
$1,632
20%
Internet
Technology
Telecommunications and Mobile
Entertainment and Media
$2,738
34%
Internet
Entertainment and Media
Technology
Telecommunications and Mobile
QoQ comparison between Q1 2015 and
Q2 2015
10
MoneyTree
TM
China TMT Report Q1/Q2 2015
Deal
volume
Deal
value
Technology 技
5%
32%
Internet联网
20%
28%
Telecommunications
and Mobile
50% 联网
34% 联网
Entertainment
and Media 传媒
55%
4,279%
First-time funding
compared with followon funding
Q1 2015
There were 217 enterprises engaged in
first-time funding in the TMT industry,
making up 65% of the total deal
volume up 2% compared to Q4 2014.
The total deal value of first-time
funding reached US$3.04 billion,
representing 42% of the total deal
value in Q1, up 23% compared to Q4
2014, which created a new record high
since 2012.
Figure 10: TMT follow-on funding compared with initial investments Q3 2012Q2 2015
100%
90%
80%
67%
70%
60%
61%
67%
65%
63% 65% 61%
53% 55%
53%
44% 45%
50%
40%
30%
20%
10%
0%
Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14 Q3’14 Q4’14 Q1’15 Q2’15
Initial investments
Follow-on investments
Q2 2015
In this quarter, 216 TMT companies
successfully received the first-time
funding, accounting for 61% of the
total deal volume. The percentage was
only four points lower than the
previous quarter. The total investment
figure for the first-time funding was
US$897 million, representing 11% of
the total deal value, a decrease of 31%
compared with Q1 2015.
MoneyTree
TM
China TMT Report Q1/Q2 2015
11
Q1 2015
Enterprises engaged in first-time
funding by sectors:
59
Internet: 101 enterprises, funding
total US$683 million.
46
Technology: 59 enterprises, funding
US$2.11 billion.
101
11
Telecommunications and Mobile: 46
enterprises, funding total US$228
million.
Entertainment and Media: 11
enterprises, funding total US$18
million.
Q2 2015
For first-time funding, 139 enterprises
were at the early stage, accounting for
64%; 61 enterprises were at the
expansion stage, accounting for 28%
and 16 enterprises were at late stage,
accounting for 7%.
Internet:88 enterprises, funding
US$547 million.
(1 at the undisclosed stage, accounting
for 1%)
Enterprises engaged in first-time
funding by sector:
88
74
Technology: 74 enterprises, funding
US$152 million.
40
Telecommunications and Mobile: 40
enterprises, funding US$125 million.
14
Entertainment and Media: 14
enterprises, funding US$73 million.
For first-time funding, 118 enterprises
were at early stage, accounting for
55%; 56 were at the expansion stage,
accounting for 26 % and 42 were at
late stage, accounting for 19%.
Q1 2015
First-time funding
summary (US$)
PwC Viewpoints
By comparing first-time TMT investments and subsequent investments, we find:
1. In Q1 2015, the volume of first-time investments increased by 41% QoQ,
and the deal value significantly increased by 249% to US$3.04 billion,
mainly because of the A-round investment of US$1.63 billion in the
Technology industry in Q1 2015. In Q2 2015, the volume of first-time
investments was almost the same as that of Q1, while the deal value of
first-time investments declined by 70% due to the lack of a single large deal.
2. Apart from the impact of the above-mentioned single large deals in the
Technology industry, Internet enterprises were far ahead of the other three
segments in terms of both volume and value.
3.
12
In H1 2015, first-time investments continued to be as strong as in H2 2014,
accounting for over 60% of the total investments, which not only evidenced
the rapid replacement rate in the TMT industry, but also indicated investors’
preference for early-stage projects.
MoneyTree
TM
China TMT Report Q1/Q2 2015
Number of
enterprises
<= 1m
49
1m-5m
96
>5m-10m
19
>10m
22
N/A
31
Q2 2015
First-time funding
summary (US$)
Number of
enterprises
<= 1m
51
1m-5m
90
>5m-10m
23
>10m
16
N/A
36
Investments by stage of development
The deal volume for early-stage
investments continued to rise in H1,
while the deal value declined slightly.
Figure 11: TMT investments by stage of development Q3 2012-Q2 2015 (Deal
value)
In the four stages of investment, the
deal volume for early-stage
investments took the lead as usual,
accounting for 75% and 61% of the
total in Q1 and Q2 2015, respectively.
In Q1 2015, early-stage investments
reached US$1.61 billion, accounting
for 21% of the total, with almost the
same deal value as the investments in
Q4 2014 which ranked the highest
since 2012.
US$m
$7,981
9,000
$7,575
8,000
7,000
$5,346
6,000
$4,706
5,000
4,000
$3,448
3,000
2,000
1,000
$3,535
$3,449
$2,304
$1,901
$1,281 $1,164
$752
In Q1 and Q2, the deal volume and
value for expansion stage went up
steadily, with little fluctuation.
0
Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14 Q3’14 Q4’14 Q1’15 Q2’15
PIPE
Late stage
Expansion stage
Deal value for late-stage investments
in Q1 took the lead, seeing significant
growth, while the deal value in Q2
decreased abruptly. Deal volume
continued to hit new records in H1
2015 since 2012.
The deal value in Q1 2015 was US$2.61
billion, accounting for 35% of the total,
a historic high since 2012, mainly due
to two huge investments with values of
US$1.63 billion and US$800 million,
respectively, at the late stage.
Enterprises at the late stage might
regain the trust of investors due to
their potential for expanding on
diversified network platforms and
stable operating basis. However, the
deal value in Q2 decreased by 92%
compared to Q1. In 2015, the deal
volume in H1 continued to grow, and
the late stage investments in Q2 were
62 deals, having broken the previous
2012 record.
Early stage
The expansion stage is also an
attractive stage for investors. In Q1 and
Q2 2015, the deal volumes of
expansion-stage investments were
almost the same as the early-stage
investments and the deal value of
expansion-stage investment exceeded
that of early-stage investment.
PIPE deal value increased
significantly with several investments
over US$100 million in H1.
Overall, the deal volume of PIPE
investments was low, but rose further
in H2 2015. However, the deal value at
PIPE stage was capricious; the deal
value in Q2 reached US$4.27 billion,
not only creating a historical high since
2012 but also accounting for 54% of
the total with a huge growth of 3,788%
compared to Q1. In Q2 2015, the
transactions with deal values ranking
as the top two were PIPE transactions.
The deal value of the expansion stage
in Q1 and Q2 was US$2.8 billion and
US$1.93 billion, respectively, and the
deal value in Q1 reached a record high
since 2012. The deal volume in Q1
increased by 34% compared to Q4
2014, while the deal volume in Q2 only
went up 2% compared to Q1.
Figure 12: TMT investments by stage of development Q3 2012-Q2 2015
(Deal volume)
600
478
500
400
300
266
200
109
100
0
81
53
12
95
64
29
4
71
56
26
3
105
131
131
68
56
21
8
22
97
23
6
18
145
132
75
259
117
116
3
15
10
119
88
56
22
297
20
28
16
6
5
4
62
12
Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14 Q3’14 Q4’14 Q1’15 Q2’15
Early stage
Expansion stage
Late stage
MoneyTree
TM
PIPE
China TMT Report Q1/Q2 2015
13
Q1 2015
Deal volume by stage of development:
Deal value by stage of development
Total deal volume for the TMT industry
reached 635 deals, with a total value of
US$7.58 billion.
Early stage: 477 deals, 75% of the
total.
Late stage: US$2.61 billion, 35% of the
total.
Expansion stage: 118 deals, 19% of
the total.
Early stage: US$1.61 billion, 21% of
the total.
Late stage: 28 deals, 4% of the total.
Expansion stage: US$2.8 billion, 37%
of the total.
PIPE: 4 deals, 1% of the total
Undisclosed: 8 deals, 1% of the total.
Figure 13: Deal volume in TMT
industry by stage of development
Q1’15
477
75%
8
1%
28
4%
4
1%
118
19%
Early stage
Expansion stage
Late stage
PIPE
Undisclosed
QoQ comparison between Q4 2014
and Q1 2015
Deal
volume
14
Deal
value
Early stage
84%
31%
Expansion
stage
34%
31%
Late stage
75%
2,150%
PIPE
20%
7%
MoneyTree
TM
China TMT Report Q1/Q2 2015
PIPE: US$110 million, 1% of the total
Undisclosed: US$446 million, 6% of
the total.
Figure 14: Deal value in TMT
industry by stage of development
Q1’15(US$m)
$1,608
21%
$446
$2,617
35% $110 6%
1%
$2,801
37%
Late stage
Early stage
Expansion stage
PIPE
Undisclosed
Q2 2015
Deal volume by stage of development
Deal value by stage of development
Total deal volume for the TMT industry
reached 491 deals, with a total value of
US$7.98 billion.
Early stage: 297 deals, 60% of the
total.
Early stage: US$1.59 billion, 20% of
the total.
Expansion stage: 119 deals, 24% of
the total.
Expansion stage: US$1.93 billion, 24%
of the total.
Late stage: 62 deals, 13% of the total.
PIPE: US$4.27 billion, 54% of the
total.
PIPE: 12 deals, 2% of the total.
Undisclosed: 1 deal, 1% of the total.
Late stage: US$198 million, 2% of the
total.
Figure 15: Deal volume in TMT
industry by stage of development
Q2’15
Figure 16: Deal value in TMT industry
by stage of development Q2’15
(US$m)
$4,269
54%
297
60%
1
1%
62
13%
12
2%
119
24%
Early stage
Expansion stage
Late stage
PIPE
Undisclosed
$198
2%
$1,587
20%
$1,927
24%
PIPE
Expansion stage
Early stage
Late stage
QoQ comparison between Q1 2015
and Q2 2015
Deal
volume
Deal
volume
Early stage期
38%
1%
Expansion
stage张期
1%
31%
Late stage期
121%
92%
PIPE
200%
3,788%
MoneyTree
TM
China TMT Report Q1/Q2 2015
15
Investments by region
In H1 2015, 831 of the 1,126 TMT
deals gave details on the regions where
investments took place. The top five
investment regions in China in the
TMT industry were, by deal volume,
Beijing with 313 (accounting for 28%
of the total deal volume), Shanghai
with a modest 146, Shenzhen with 74,
Zhejiang Province with 60 and
Guangdong Province (except
Shenzhen) with 53. The total deal
volume of the top five regions was 646,
accounting for 57% of the total.
Total deal value of investments which
disclosed their region was US$13.83
billion. In terms of deal value, the top
two rankings had no change. Zhejiang
Province surpassed Shenzhen and
ranked third. The top five regions by
deal value had an aggregated deal
value of US$11.76 billion, accounting
for 75% of the total. Beijing took the
top spot with an impressive sum of
US$6.16 billion, and Shanghai ranked
second with US$2.74 billion, followed
by Zhejiang Province with total of
US$1.4 billion. Fujian Province and
Shenzhen ranked fourth and fifth,
respectively, with an aggregated deal
value of US$1.45 billion.
Figure 17: The top six regions for TMT investments in Q1/Q2’15 (Deal
volume/Deal value)
US$m
0
Deal volume
Beijing
313
Shanghai
146
Zhejiang Province
60
Fujian Province
20
Shenzhen
74
Guangdong Province 53
1,000
2,000
3,000
4,000
5,000
6,000
7,000
$6,162
$2,743
$1,400
$835
$619
$518
PwC Viewpoints
In terms of investments regions, both the deal volume and value in Beijing
were far above other provinces in H1 2015; Beijing was still the core area
of the Chinese TMT industry, and it is estimated that it would be difficult to
surpass by other regions in the short term.
In H1 2015, the deal volume and value in Shanghai saw a significant
increase; Fujian Province also surged abruptly with deal value surpassing
Shenzhen. Overall, TMT investments were mostly concentrated in the four
first-tier cities of Beijing, Shanghai, Guangzhou and Shenzhen and the
provinces located on the east coast of China.
16
MoneyTree
TM
China TMT Report Q1/Q2 2015
3. PE/VC exits in the TMT industry
Exits by quarter
Figure 18: Exit volume in the TMT industry Q3 2012-Q2 2015
60
50
In H1 2015, TMT exit volume hit a
record high since 2012.
In Q1 2015, there were 23 exits; and
one quarter later, the number rose to
26. There were 34 exits in H2 2014. In
general, the total amount of exits in H1
2015 increased by 44% compared to
H2 2014.
40
30
20
12
17
13
10
23
16
16
18
23
26
10
6
10
0
Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14 Q3’14 Q4’14 Q1’15 Q2’15
PwC Viewpoints
In H1 2015, exits via IPO reached 34, accounting for 69% of all TMT industry
exits and once again becoming the main method for exit.
With respect to the listing areas, IPO in the US was not a popular exit strategy
just as we previously predicted. In H1 2015, the Chinese A-share (especially
GEM) market was hot, and IPO volume was up to 28 deals, accounting for
82% of the total. The privatization of the companies listed overseas will keep
occuring, but Chinese TMT companies haven’t stopped going abroad for IPO
listing. From the perspective of number and scale, domestic A Share IPOs
will become the main trend; from the point of PE/VC, the TMT industry will
continue to be a hotspot.
The domestic capital market provides various trading platforms for TMT
companies in different stages. In H1 2015, IPOs in both the TMT industry and
the Chinese A-share market reached historical highs since 2012. However, due
to the re-suspension of the Chinese A-Share market in July, investments and
exits in H2 2015 are expected to decrease.
MoneyTree
TM
China TMT Report Q1/Q2 2015
17
Exits by type
Since the beginning of 2014, due to the
restart of the A-share market in China
and the confidence Chinese companies
have in the American capital market,
the number of IPOs and its ratios
among the total exits rose significantly.
This optimistic trend continued in H1
2015, and IPOs rose dramatically,
accounting for 77% of all exits, a new
high since H2 2012. In H1 2015, IPOs
surpassed M&A as the main form of
exit.
M&A accounted for 22% and 19% of
total exits in Q1 and Q2 2015,
respectively, a significant decrease
compared to 61% in Q4 2014.
Management buy-out and secondary
sale represent a small percentage,
normally no more than 20%, of the
total exits. There were only four
secondary sales and no buy-outs in Q1,
and there was only one buy-out and no
secondary sale in Q2.
Figure 19: TMT exit trends by type Q3 2012-Q2 2015
30
25
20
11
15
10
5
0
7
1
3
1
7
2
2
7
1
2
7
1
2
3
3
2
2
5
6
1
1
1
2
2
10
1
1
8
8
4
14
20
8
1
1
6
11
4
5
1
5
Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14 Q3’14 Q4’14 Q1’15 Q2’15
IPO
18
MoneyTree
TM
China TMT Report Q1/Q2 2015
Strategic sale
Management buy-out
Secondary sale
Listing of Chinese TMT companies in
mainland China was unprecedented
since 2012.
Since 2012, there has been a trend of
Chinese TMT companies listing in the
US. In Q2 2014 US-listed Chinese TMT
companies reached a record high since
2012, which was due mainly to simpler
procedures, higher liquidity levels, and
no rigorous profitability requirement
relating to listing in the US. However,
new technology and business models,
represented by the internet subsector,
have been profoundly changing the
traditional industries of China.
Meanwhile, the relatively high
valuation given to the TMT industry in
China’s capital market, Chinese
government encouraging public listing
of Small and Medium Enterprises
(SME) in recent years, and the
disadvantages related to the listing in
American exchanges (e.g., high initial
public offerings costs and relatively
low valuation) encouraged more and
more enterprises to seek being listed in
mainland China.
In terms of choices of listing areas, in
Q1 2015, 86% of TMT companies were
listed domestically and the remaining
14% listed in Hong Kong.
In Q2 2015, 80% of TMT companies
were listed in mainland China, 10% of
listings were on NASDAQ and NYSE,
and another 10% were listed in Hong
Kong.
Among the TMT companies listed
domestically, 64% chose to list on the
GEM Board in Shenzhen, 25% chose to
list on the main board of the Shanghai
Stock Exchange and 11% chose to list
on the SME board in Shenzhen.
Thus it can be seen that the US markets
are no longer the first choice. When the
situation for domestic stock market is
favorable, TMT companies may prefer
to list in mainland China.
Figure 20: Comparison of TMT exits in mainland China, Hong Kong and
US capital markets Q3 2012-Q2 2015
57%
Q3’13
50%
Q4’13
Q3’12
Q4’12
Q1’13
Q2’13
100%
100%
0%
100%
90%
64%
50%
57%
64%
86%
80%
Q4’14
Q1’15
Q2’15
14%
10% 10%
Q1’14
Q2’14
9%
10%
Mainland China
27%
Q3’14
25%
Hong Kong
25%
14%
9%
43%
29%
27%
US
In Q1 2015, there were 23 exits in
total.
In Q2 2015, there were 26 exits in
total.
IPO: 14 exits, 61% of the total.
IPO: 20 exits, 77% of the total.
Strategic sale: 5 exits, 22% of the
total.
Strategic sale: 5 exits, 19% of the
total.
Secondary sale: 4 exits, 17% of the
total.
Management buy-out: (including
buy-back): 1 exit, 4% of the total.
Figure 21: Exit types in the TMT
industry Q1’15
Figure 22: Exit types in the TMT
industry Q2’15
14
61%
4
17%
20
77%
5
22%
IPO
Strategic sale
Secondary sale
1
4%
5
19%
IPO
Strategic sale
Management buy-out
MoneyTree
TM
China TMT Report Q1/Q2 2015
19
Exits by sector
The Internet sector saw more
investments, but exits steadily
declined.
Q1 2015
Exits by sector in the TMT industry:
Entertainment and Media: 7 exits,
30% of the total.
Technology: 7 exits, 30% of the total.
Telecommunications and Mobile:
6 exits, 27% of the total.
Internet: 3 exits, 13% of the total.
The Internet, as an active TMT
industry sector, was booming in both
Q1 and Q2. The deal volume and deal
value of the Internet sector ranked the
highest among the four sectors. The
exit volume in H1 2015 remained
stable and was almost the same as H2
2014.
Exits in the Technology sector
increased.
Q2 2015
Exits by sector in the TMT industry:
Technology: 17 exits, 65% of the total.
Internet: 4 exits, 15% of the total.
Entertainment and Media: 3 exits,
12% of the total.
Telecommunications and Mobile:
2 exits, 8% of the total.
The exit volume in the Technology
sector ranked the highest among the
four sectors, accounting for 65% of the
total in TMT industry in Q2 2015,
reaching a new historical high and
increasing 143% compared to Q1 2015.
The Entertainment and Media sector
saw more investment, and exits
increased.
In Q1, there was a rush of exits in the
Entertainment and Media sector; the
exits volume almost doubled compared
to Q4 2014, creating a new high point
since 2012, and accounting for as much
as 30% of the total in TMT industry.
Figure 23: IPO exits in the TMT industry Q3 2012-Q2 2015
18
17
16
14
13
12
12
10
9
9
8
6
5
4
4
5
4
2
4
2
2
1
0
1
2
0
0
5
6
3
3
2
0
7
7
0
0
3
1
0
6
4
4
2
1
7
3
3
2
2
2
0
Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14 Q3’14 Q4’14 Q1’15 Q2’15
Technology
20
MoneyTree
TM
China TMT Report Q1/Q2 2015
Internet
Telecommunications and Mobile
Entertainment and Media
4. Sector focus: Technology, Internet,
and Telecommunications and Mobile
Figure 24: Deal value in the Technology sector Q3 2012-Q2 2015
Investments in
Technology
US$m
3,000
The Technology sector includes IT
Services, Hardware, Software,
Electronics & Optoelectronics Devices
and Semiconductor.
$2,813
$2,389
2,500
2,000
$1,632
$1,568
In H1 2015, total deal value in the
Technology sector increased rapidly,
and deal volume reached a historical
high since 2012; and the
Semiconductor subsector took the
lead in investments.
1,500
The deal value in Q1 2015 increased by
316% compared to Q4 2014. The main
reason was that a Semiconductor
supplier obtained an A-round
investment of US$1.63 billion, which
increased the overall deal value. In Q2,
another Semiconductor supplier
obtained a huge investment of US$791
million, keeping the deal value in Q2 at
a high level. The deal volume in H1
2015 continued to rise, reaching a
historical high since 2012. The deal
value of the Semiconductor industry
also hit a new high since 2012,
accounting for 60% of the total in
Technology sector.
0
1,000
$1,001
$840
$501
500
$574
$485
$128
$230
$218
Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14 Q3’14 Q4’14 Q1’15 Q2’15
Semiconductor
Hardware
IT Services
Software
In H1, investment volume in the
Hardware and Electronics &
Optoelectronics Devices subsector
reached a record high since 2012 due
to several large individual deals
which drove the total higher.
The deal volume in the Hardware
subsector had not surpassed 10 deals
since Q3 2014. The deal value reached
30 deals in Q1 2015 for the first time,
creating a historical high since 2012.
Electronics & Optoelectronics Devices
The deal value in Q2 was US$49 million,
equal to the historical high since 2012.
The deal volume in H1 2015 reached a
new high since 2012, increasing by 65%
compared to H2 2014; the deal value
increased by 183% compared to H2 2014.
The Hardware subsector surpassed the
Semiconductor subsector for the first
time, moving up from its bottom position.
Figure 25: Deal volume in the Technology sector Q3 2012-Q2 2015
50
44
45
40
35
35
30
28
27
25
20
15
10
5
0
16
15
5
19
18
13
2
23
16
22
13
7
3
17
23
3
11
5
2
1
13
5
13
15
7
3
1
26
21
9
13
3
3
2
21
15
26
25
23
16
21
19
15
7
5
40
30
15
11
2
3
3
2
Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14 Q3’14 Q4’14 Q1’15 Q2’15
Electronics & Optoelectronics Devices
IT Services
Hardware
Software
Semiconductor
MoneyTree
TM
China TMT Report Q1/Q2 2015
21
The investment in the Semiconductor
subsector was outstanding; both the
total deal value and the average
single investment value took the lead.
The outstanding performance of the
Semiconductor subsector in 2014
continued in H1 2015. Even though
there were only six deals, the total deal
value reached US$2.43 billion, with
the average single investment value
reaching US$405 million. Total deals
value, average single investment value
and the ratio of the total Technology
investment all reached historical highs
since 2012. In H1 2015, the investor in
Deal volume and value
Q1 2015
the two largest deals in the
Semiconductor subsector was a
state-owned investing fund that
mainly invests in companies which
performed well in integrated circuit
industrial chains, which demonstrates
the significant importance and
investment attached to the industrial
development of integrated circuits
from the perspective of the Chinese
national strategy.
The average single deal value in the
IT Services and Software subsectors
declined slightly.
Figure 26: Deal volume by
Technology subsector Q1’15
Figure 27: Deal value by Technology
subsector Q1’15 (US$m)
There were 119 deals in the
Technology sector, with a total value of
US$2.39 billion.
IT Services: 35 deals, 29% of the total;
deal value of US$ 193 million, 8% of
the total.
Software: 25 deals, 21% of the total;
deal value of US$68 million, 3% of the
total.
Electronics & Optoelectronics
Devices: 21 deals, 17% of the total;
deal value of US$443 million, 19% of
the total.
In H1 2015, despite the deal volume in
IT Services rising continuously and
creating historical highs since 2012,
the growth in deal value was not as
good as the growth in deal volume,
resulting in the single deal value
decreasing compared to 2014. The deal
volume and value in the Software
subsector were low and fell further in
H1 2015.
21
17%
30
25%
5
5%
3
3%
$443
19%
$32 $18
1% 1%
25
21%
$1634
68%
35
29%
IT Services
Hardware
Electronics & Optoelectronics Devices
Software
Semiconductor
Undisclosed
$68
3%
$193
8%
Electronics & Optoelectronics Devices
IT Services
Software
Hardware
Semiconductor
Undisclosed
Hardware: 30 deals, 25% of the total;
deal value of US$32 million, 1% of the
total.
Semiconductor: 3 deals, 3% of the
total; deal value of US$1.63 billion,
68% of the total.
Undisclosed: 5 deals, 5% of the total;
deal value of US$18 million, 1% of the
total.
QoQ comparison between Q4 2014 and
Q1 2015
Deal
volume
Electronics &
Optoelectronics
Devices
22
MoneyTree
TM
China TMT Report Q1/Q2 2015
Deal
value
31%
310%
Software
4%
65%
IT Services
52%
25%
Semiconductor体
50%
2,304%
Hardware
173%
36%
Deal volume and value
Q2 2015
There were 125 deals in the
Technology sector, with a total value of
US$1.63 billion.
Software: 19 deals, 15% of the total;
deal value of US$118 million, 7% of the
total.
IT services: 44 deals, 35% of the total;
deal value of US$265 million, 16% of
the total.
Electronics & Optoelectronics
devices: 40 deals, 32% of the total;
deal value of US$399 million, 24% of
the total.
Figure 28: Deal volume by
Technology subsector Q2’15
15
12%
40
32%
4
3 3%
3%
44
35%
Figure 29: Deal value by Technology
subsector Q2’15 (US$m)
$794
49%
$7
$49 1%
3%
19
15%
$399
24%
$118
7%
$265
16%
IT Services
Electronics & Optoelectronics Devices
Software
Semiconductor
Undisclosed
Hardware
Electronics & Optoelectronics Devices
IT Services
Software
Hardware
Undisclosed
Semiconductor
Hardware: 15 deals, 12% of the total;
deal value of US$49 million, 3% of the
total.
Semiconductor: 3 deals, 3% of the
total; deal value of US$794 million,
49% of the total.
Undisclosed: 4 deals, 3% of the total;
deal value of US$7 million, 1% of the
total.
QoQ comparison between Q1 2015 and
Q2 2015
Deal
volume
Deal
value
Electronics &
Optoelectronics
Devices 及光电设备
90%
10%
Software
24%
74%
IT Services服务
26%
37%
—
51%
50%
54%
Semiconductor 导
Hardware
MoneyTree
TM
China TMT Report Q1/Q2 2015
23
Investments by stage of development
Figure 30: Deal value by stage of development in the Technology sector
Q3 2012-Q2 2015
Early-stage deal volume and value in
Q1 reached a historical record since
2012.
US$m
3,500
Since Q2 2014 deal volume at the early
stage preceded that of other
investment stages for four consecutive
quarters. The deal volume and value
for the early stage in Q1 2015 reached
its highest level on record since 2012
when we started to track investment
trends, and the deal volume rose by
89% compared to Q4 2014. An
investment with deal value of US$100
million in the IT Services subsector
contributed to the overall total value of
the early-stage investments.
3,000
$2,813
2,500
$2,389
2,000
1,000
500
$1,632
$1,583
1,500
$1,001
$848
$526
$571
$485
$125
0
$230
$218
Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14 Q3’14 Q4’14 Q1’15 Q2’15
PIPE
Late stage
Expansion stage
Early stage
The investments at the expansion and
late stages stayed steady.
Overall, the deal volume and value in
H1 at the expansion and late stages
remained stable. In 2014, the deal
volume and value at the expansion
stage were far greater than that at the
late stage. However, the deal value in
Q1 2015 at the late stage surpassed
Figure 31: Deal volume by stage of development in the Technology sector
Q3 2012-Q2 2015
80
68
70
60
46
50
40
40
38
31
30
20
10
21
13
5
19
16
13
2
0
15
1
11
8
18
21
11
17
8
2
4
21
24
10
8
36
32
37
26
14
3
10
6
10
4
34
31
20
10
39
5
14
8
2
3
6
Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14 Q3’14 Q4’14 Q1’15 Q2’15
Expansion stage
24
MoneyTree
TM
Early stage
China TMT Report Q1/Q2 2015
Late stage
PIPE
that of the expansion stage, creating a
historical record since 2012. This was
due to a huge deal of US$1.63 billion
made at the late stage. There were no
huge deals in Q2 at the late stage, so
the expansion stage again surpassed
the late stage.
PIPE investments recovered slightly
PIPE investments started to bottom out
in Q4 2013, and cooled in H2 2014.
PIPE investments in Q2 2015 bottomed
out again and increased by 911% and
178% QoQ in Q2 and Q1 2015,
respectively.
Investments by stage of development
Q1 2015
Early stage: 68 deals, 57% of the total;
deal value of US$227 million, 10% of
the total.
Figure 32: Deal volume by stage
of development in the Technology
sector Q1’15
68
57%
PIPE: 3 deals, 3% of the total; deal
value of US$ 103 million, 4% of the
total.
$1,653
69%
2
1%
Expansion stage: 32 deals, 27% of the
total; deal value of US$113 million, 5%
of the total.
Late stage: 14 deals, 12% of the total;
deal value of US$1.65 billion, 69% of
the total.
Figure 33: Deal value by stage of
development in the Technology
sector Q1’15 (US$m)
3
3%
14
12%
$103
4% $113
5%
32
27%
Early stage
Late stage
Undisclosed
$293
$227 12%
10%
Expansion stage
PIPE
Undisclosed
Late stage
Early stage
PIPE
Expansion stage
Undisclosed: 2 deals, 1% of the total;
deal value of US$293 million, 12% of
the total.
Q2 2015
Early stage: 34 deals, 27% of the total;
deal value of US$56 million, 3% of the
total.
Figure 34: Deal volume by stage
of development in the Technology
sector Q2’15
46
37%
Expansion stage: 46 deals, 37%; deal
value of US$450 million, 28% of the
total
Late stage: 39 deals, 31% of the total;
deal value of US$87 million, 5% of the
total.
PIPE: 6 deals, 5% of the total; deal
value of US$1.04 billion, 64% of the
total.
Figure 35: Deal value by stage of
development in the Technology
sector Q2’15 (US$m)
$1,039
64%
6
5%
$56
3%
39
31%
34
27%
Expansion stage
Early stage
$87
5%
$450
28%
Late stage
PIPE
PIPE
Expansion stage
Late stage
Early stage
QoQ comparison between Q4 2014
QoQ comparison between Q1 2015
and Q1 2015
and Q2 2015
Deal
volume
Deal
value
Deal
volume
Deal
value
Early stage
89%
8%
Early stage
50%
75%
Expansion
stage期
3%
55%
Expansion
stage期
44%
298%
Late stage
75%
2,229%
Late stage
179%
95%
PIPE
50%
178%
PIPE
100%
911%
MoneyTree
TM
China TMT Report Q1/Q2 2015
25
Investments by region
Beijing leading other regions.
In H1 2015, the top five regions with
the highest deal volume and greatest
deal value in the Technology sector
were, in descending order, Beijing,
Fujian, Shenzhen, Guangdong and
Shanghai. Beijing took the top spot,
with 62 deals totaling US$1.99 billion.
Fujian had 9 deals, totaling US$813
million. Shenzhen had 20 deals,
totaling US$394 million. Guangdong
had 10 deals totaling US$252 million.
Shanghai had 14 deals totaling US$125
million.
Beijing’s deal volume and value were
far greater than the sum of the other
four regions.
Figure 36: The top five regions for Technology investments Q1/Q2’15 (Deal
volume/Deal value)
US$m
Deal volume
26
Beijing
62
Fujian Province
9
Shenzhen
20
Guangdong Province
10
Shanghai
14
MoneyTree
TM
0
500
1,000
1,500
2,000
$1,993
$813
$394
$252
$125
China TMT Report Q1/Q2 2015
Investment in Beijing focused on the
Semiconductor and IT Services
subsectors, which accounted for 82%
and 12% of the total, respectively.
Investments in Internet
The Internet sector includes
E-commerce, Online Education,
Internet Services, Online
Entertainment, Social Media,
Internet Marketing and Internet
Finance.
The E-commerce subsector became
the most active in the Internet sector,
and the total deal volume and value
in H1 2015 reached a historical high
level since we began tracking in 2012.
As the leader in the Internet sector,
E-Commerce kept increasing in H1
2015. The deal volume in Q1was 132
deals and rose by 116% compared to
Q4 2014, and the deal value was
US$2.21 billion and rose by 105%
QoQ, which was the best performance
since 2012. Currently, most of the
E-commerce enterprises remain at the
early and expansion stages.
Specifically, 77% of deals stayed at the
early stage, 19% stayed at the
expansion stage, and only 3% stayed at
the late stage. In H1 2015, the
investments with deal value over
US$100 million amounted to 12 deals.
Figure 37: Deal value in the Internet sector Q3 2012-Q2 2015
US$m
4,000
$3,816
3,500
3,000
2,500
$2,752
$2,230
$1,937
2,000
$1,468
1,500
$888
1,000
500
$185
$380
$504
$1,587
$1,565
$605
0
Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14 Q3’14 Q4’14 Q1’15 Q2’15
Internet Finance
Internet Marketing
Social Media
Internet Services
Online Education
E-commerce
In H1, deal value in Internet
Marketing and Internet Services was
over US$100 million, which created a
new record since 2012.
Internet Marketing mainly consisted of
consulting firms, advertising agencies
and organizations of network
marketing services. There were 14
deals in Internet Marketing in Q1 and
total deal value was US$965 million,
representing a historical high since
2012. In H1, the biggest single deal
value of the Internet sector was
US$800 million, which belonged to the
subsector of Internet Marketing.
In Q2, the deal value of Internet
Services was over US$1 billion and
reached US$1.06 billion, which was
mainly due to two PIPE.
Online Entertainment
Figure 38: Deal volume in the Internet sector Q3 2012-Q2 2015
140
132
120
100
80
60
40 30
20
0
90
80
29
27
24
23
20
16 12 16
16 11 17
11
6 4684
4 33 4 5 6753 1 34 1 6 48
31
29
11
5 62 3
47
10
23
18
55
39
17 10
9
473 4 7 1
94
79
61
48
12
21 16
18 19 21 17
1916
11
14
14
11 8
6 3
7
1
Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14 Q3’14 Q4’14 Q1’15 Q2’15
E-commerce
Online Education
Internet Services
Social Media
Internet Marketing
Internet Finance
MoneyTree
TM
Online Entertainment
China TMT Report Q1/Q2 2015
27
Deal volume and value
In Q1 2015, there were 288 deals in the
Internet sector, with a total value of
US$3.82 billion.
Figure 39: Deal volume by Internet
subsector Q1’15
132
46%
E-commerce: 132 deals, 46% of the
total; deal value of US$2.21 billion,
58% of the total.
5
1%
14
5%
Internet Services: 90 deals, 31% of the
total; deal value of US$227 million, 6%
of the total.
19
7%
Internet Marketing: 19 deals, 7% of
the total; deal value of US$306 million,
8% of the total.
31%
E-commerce
Internet Marketing
Online Entertainment
Online Education: 16 deals, 6% of the
total; deal value of US$70 million, 2%
of the total.
Online Entertainment: 14 deals, 5%
of the total; deal value of US$965
million, 25% of the total.
12
16 4%
6%
90
Internet Services
Online Education
Social Media
Undisclosed
Figure 40: Deal value by Internet
subsector Q1’15 (US$m)
Social Media: 12 deals, 4% of the
total; deal value of US$260 million, 1%
of the total.
Internet Finance: No deals in Q1 2015.
Undisclosed: 5 deals, 1% of the total;
deal value of US$12 million, 0% of the
total.
$965
25%
$26 $12
1% 0%
$2,209
$70
$227
58%
2%
6%
$306
8%
E-commerce
Internet Services
Internet Marketing
Social Media
Online Education
Online Entertainment
Undisclosed
QoQ comparison between Q4 2014 and
Q1 2015
Deal
volume
28
MoneyTree
TM
China TMT Report Q1/Q2 2015
Deal
value
E-commerce
116%
105%
Online Education
10%
161%
Internet Services
88%
9%
Online
Entertainment
167%
161%
Social Media
14%
21%
Internet Marketing
18%
1,594%
Internet Finance 络融
100%
100%
Deal volume and value
In Q2 2015, there were 230 deals in the
Internet sector, with a total value of
US$2.75 billion.
Figure 41: Deal volume by Internet
subsector Q2’15
94
41%
E-commerce: 94 deals, 41% of the
total; deal value of US$1.19 billion,
43% of the total.
Internet Services: 79 deals, 34% of the
total; deal value of US$1.06 billion,
39% of the total.
Internet Marketing: 8 deals, 3% of the
total; deal value of US$68 million, 2%
of the total.
Online Entertainment: 11 deals, 5%
of the total; deal value of US$171
million, 6% of the total.
Social Media: 16 deals, 7% of the
total; deal value of US$87 million, 3%
of the total.
Online Education: 21 deals, 9% of the
total; deal value of US$134 million, 5%
of the total.
16
7%
1
1% 8
113%
5%
21
9%
E-commerce
Online Education
Social Media
Internet Finance
79
34%
Internet Services
Internet Marketing
Online Entertainment
Figure 42: Deal value by Internet
subsector Q2’15 (US$m)
$1,185
43%
$50
2%
$68
$87 2%
3%
$1,057
39%
Internet Finance: 1 deal, 1% of the
total; deal value of US$50 million, 2%
of the total.
$134
5% $171
6%
E-commerce
Online Education
Social Media
Internet Finance
Internet Services
Internet Marketing
Online Entertainment
QoQ comparison between Q1 2015 and
Q2 2015
Deal
volume
Deal
value
E-commerce
29%
46%
Online Education
11%
56%
Internet Services
12%
366%
Online
Entertainment
31%
142%
Social Media
33%
231%
Internet Marketing
43%
93%
Internet Finance 络融
900%
4,900%
MoneyTree
TM
China TMT Report Q1/Q2 2015
29
Investments by stage of development
Early-stage investment ranked first,
with sharply rising deal values; and
deal value in Q1 reached a historical
high level since 2012.
The deal volume at the early stage
accounted for 78% and 74% of the total
in Q1 and Q2, respectively. It was the
leading investment stage because of
the strong demand for funding from
early-stage enterprises.
Deal value in early-stage companies
grew by leaps and bounds in H1 2015.
The figure rose by 16% in Q1 QoQ,
which had broken previous records
since 2012.
Figure 43: Deal value by stage of development in the Internet sector Q3
2012-Q2 2015
US$m
4,000
$3,816
3,500
3,000
2,500
$2,752
$2,151
$1,937
2,000
$1,468
1,500
$888
1,000
500
$381
$189
$1,587
$1,563
$679
$501
0
Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14 Q3’14 Q4’14 Q1’15 Q2’15
PIPE
Late stage
Expansion stage
Deal value at the expansion stage
accounted for 47% of the total and
reached a historical high since 2012
with US$1.7 billion.
Early stage
In H1, huge investments occurred at
the PIPE and late stages.
In H1 2015, there were only two deals
at the PIPE stage, but the deal values
were huge, amounting to US$500
million and US$130 million,
respectively. In Q1, the deal volume at
the late stage was seven deals and the
deal value was US$873 million. Among
them, there was an investment in an
Internet Marketing enterprise with the
deal value of US$800 million and
accounting for 92% of the total,
leading to the sharp increase of the
deal value at the late stage.
Expansion-stage investments rose
significantly in terms of both deal value
and volume, which hit a historical high
since 2012. In H1, there were nine
single investments over US$100
million. The top three investments
were US$700 million, US$425 million
and US$170 million, respectively,
which were all from the E-commerce
subsector.
Figure 44: Deal volume by stage of development in the Internet sector Q3
2012-Q2 2015
250
224
200
171
150
128
127
100
50
35
31
0
49
37
17
9
1 0
2
42
38
25
0
5
27
18
5
0
51
38
4
1
64
39
9
0
48
6
52
30
2
9
1
55
44
37
3
12
7
2
0
2
Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14 Q3’14 Q4’14 Q1’15 Q2’15
Early stage
30
MoneyTree
TM
China TMT Report Q1/Q2 2015
Expansion stage
Late stage
PIPE
Investments by stage of development
Q1 2015
There were 288 deals in the Internet
sector, with a total value of US$3.82
billion.
Figure 45: Deal volume by stage of
development in the Internet sector
Q1’15
$1,783
47%
224
78%
Early stage: 224 deals, 78% of the
total; deal value of US$1.01 billion,
26% of the total.
2
1%
Expansion stage: 55 deals, 19% of the
total; deal value of US$1.78 billion,
47% of the total.
Late stage: 7 deals, 2% of the total;
deal value of US$873 million, 23% of
the total.
Figure 46: Deal value by stage of
development in the Internet sector
Q1’15 (US$m)）
$150
4%
7
2%
$1,010
26%
$873
23%
55
19%
Early stage
Late stage
Expansion stage
Undisclosed
Early stage
Late stage
Expansion stage
Undisclosed
PIPE: No deals in Q1 2015.
Undisclosed: 2 deals, 1% of the total;
deal value of US$150 million, 4% of
the total.
Q2 2015
There were 230 deals in total in the
Internet sector, with a total value of
US$2.752 billion.
Figure 47: Deal value by stage of
development in the Internet sector
Q2’15 (US$m)
Figure 48: Deal value by stage of
development in the Internet sector
Q2’15 (US$m)
171
74%
Early stage: 171 deals, 74% of the
total; deal value of US$1.02 billion,
37% of the total.
1
1%
$1,024
37%
2
1%
Expansion stage: 44 deals, 19% of the
total; deal value of US$1.02 billion,
37% of the total.
12
5%
Late stage: 12 deals, 5% of the total;
deal value of US$80 million, 3% of the
total.
Early stage
Late stage
$80
3%
$630
23%
44
19%
Expansion stage
PIPE
$1,018
37%
Early stage
Late stage
Expansion stage
PIPE
Undisclosed
PIPE: 2 deals, 1% of the total; deal
value of US$630 million, 23% of the
total.
Undisclosed: 1 deal, 1% of the total;
deal value undisclosed.
QoQ comparison between Q4 2014
QoQ comparison between Q1 2015
and Q1 2015
and Q2 2015
Deal
volume
Deal
value
Deal
volume
Deal
value
Early stage
76%
16%
Early stage
24%
1%
Expansion
stage
49%
183%
Expansion
stage
20%
43%
Late stage
133%
174,536%
Late stage
71%
91%
PIPE
100%
100%
1,900%
62,900%
PIPE
MoneyTree
TM
China TMT Report Q1/Q2 2015
31
Investments by region
During Q1 and Q2 2015, the top three
regions in terms of deal quantity in the
Internet sector were, in descending
order, Beijing, 153 deals with a total
deal value of US$2.7 billion; Shanghai,
77 deals with a total deal value of
US$1.01 billion; Shenzhen, 32 deals
with a total deal value of US$163
million; and Zhejiang and Guangdong
(excluding Shenzhen), also with 27
deals with a total deal value of US$270
million and US$221 million
respectively, which tied for fourth by
deal volume. From the perspective of
investment value, Sichuan overtook
Zhejiang, Guangdong and Shenzhen
and entered top 3 for the first time.
This was mainly due to a single
investment in an E-commerce
Transaction Platform amounting to
US$425 Million.
32
MoneyTree
TM
Figure 49: The top six regions for Internet sector investments in Q1/Q2’15
(Deal volume/Deal value)
China TMT Report Q1/Q2 2015
US$m
Deal volume
Beijing
153
Shanghai
77
Sichuan
Province
21
Zhejiang
Province
27
Guangdong
Province
27
Shenzhen
32
0
500
1,000
1,500
2,000
2,500
3,000
$2,700
$1,012
$475
$270
$221
$163
Investments in
Telecommunications
and Mobile
The Telecommunications and Mobile
sector includes Telecom Equipment and
Terminals, Other Telecommunications
Subsectors and Mobile.
Figure 50: Deal volume
by subsegment in the
Telecommunications and Mobile
sector Q1’15
Figure 51: Deal value by subsegment
in the Telecommunications and
Mobile sector Q1’15 (US$m)
Deal volume and value
Q1 2015
There were 208 deals in
Telecommunications and Mobile
sector, with a total value of US$1.31
billion.
Mobile: 204 deals, 98% of the total;
deal value of US$1.24 billion, 95% of
the total.
Telecom Equipment and Terminals: 4
deals, 2% of the total; deal value of
US$69 million, 5% of the total.
Other Telecommunications Subsectors:
No deals in Q1 2015.
204
98%
$1,239
95%
4
2%
$69
5%
Mobile
Telecom Equipment and Terminals
Mobile
Telecom Equipment and Terminals
Mobile, the pillar of the
Telecommunications sector, saw
unprecedented investment in Q1 2015
in terms of the deal volume and
value.
The small, light and convenient
smartphone brought a wave of mobile
to all aspects of society. It also
increased investments in smartphone
platforms in the Mobile sector.
In Q1 2015, investment volumes in
Mobile reached historical highs since
2012, hitting 204 deals and accounting
for 98% of the total. This was up 87%
QoQ from Q4 2014. In Q2 2015,
investments decreased QoQ mainly
due to a single investment in a wellknown taxi hailing app enterprise
amounting to US$600 million in Q1
2015.
Other Telecommunications
Subsectors only had five deals in H1
2015.
Since 2012 the deal volume of this
subsector has never surpassed 10 deals
and the deal value was also historically
low. The deal value in Q2 2015 was
US$4 million even though there were
no deals in Q1 2015.
Telecom Equipment and Terminals:
the investments were stable in H1.
There were four deals and three deals
in Q1 and Q2 in the Telecom
Equipment and Terminals subsector
with deal value of US$69 million and
US$2 million, respectively, which
remained stable compared with
previous years.
MoneyTree
TM
China TMT Report Q1/Q2 2015
33
Q2 2015
There were a total of 105 deals in the
Telecommunications and Mobile
sector, with a total value of US$859
million.
Mobile: 97 deals, 92% of the total; deal
value of US$853 million, 98% of the
total.
Telecom Equipment and Terminals:
3 deals, 3% of the total; deal value of
US$2 million, 1% of the total.
Other Telecommunications
Subsectors:5 deals, 5% of the total;
deal value of US$4 million, 1% of the
total.
Figure 52: Deal volume by subsectors
in the Telecommunications and
Mobile sector Q2’15
Figure 53: Deal value by subsectors
in the Telecommunications and
Mobile sector Q2’15(US$m)
97
92%
3
3%
$853
98%
5
5%
$2
1%
$4
1%
Mobile
Telecom Equipment and Terminals
Other Telecommunications Subsectors
Mobile
Telecom Equipment and Terminals
Other Telecommunications Subsectors
QoQ comparison between Q4 2014
QoQ comparison between Q1 2015
and Q1 2015
and Q2 2015
Deal
Deal
volume value
Mobile
34
MoneyTree
TM
Telecom Equipment
and Terminals
Other
Telecommunications
Subsectors 技术
China TMT Report Q1/Q2 2015
87%
Deal
Deal
volume value
N/A
Mobile
52%
31%
33%
94%
Telecom Equipment
and Terminals
25%
98%
100%
N/A
Other
Telecommunications 4,900%
Subsectors 技术
3,906%
Figure 54: Deal volume by
stage of development in the
Telecommunications and Mobile
sector Q1’15
Investments by stage of development
3
1%
Expansion stage: 23 deals, 11% of the
total; deal value of US$862 million,
66% of the total.
Late stage: 3 deals, 1% of the total;
deal value of US$76 million, 6% of the
total.
$76
6%
178
86%
Q1 2015
Early stage: 178 deals, 86% of the
total; deal value of US$366 million,
28% of the total.
Figure 55: Deal value by
stage of development in the
Telecommunications and Mobile
sector Q1’15 (US$m)
3
0%
4
2%
$862
66%
23
11%
Early stage
Late stage
$366
28%
Expansion stage
Undisclosed
Early stage
Late stage
Expansion stage
Undisclosed
PIPE: No deals in Q1 2015
Undisclosed: 4 deals, 2% of the total;
deal value of US$3 million, 0% of the
total.
Q2 2015
Early stage: 84 deals, 80% of the total;
deal value of US$464 million, 54% of
the total.
Expansion stage: 17 deals, 16% of the
total; deal value of US$391 million,
46% of the total.
Late stage: 4 deals, 4% of the total;
deal value of US$4 million, 0% of the
total.
Figure 56: Deal volume by
stage of development in the
Telecommunications and Mobile
sector Q2’15
Figure 57: Deal value by
stage of development in the
Telecommunications and Mobile
sector Q2’15 (US$m)
84
80%
4
4%
$391
46%
$464
54%
$4
0%
17
16%
PIPE: No deals in Q2 2015
Early stage
Late stage
Expansion stage
Early stage
Late stage
Expansion stage
QoQ comparison between Q4 2014
QoQ comparison between Q1 2015
and Q1 2015
and Q2 2015
Deal
volume
Deal
value
Deal
volume
Deal
value
Early stage
89%
70%
Early stage
53%
27%
Expansion
stage
53%
30%
Expansion
stage
26%
55%
Late stage
—
302%
Late stage
33%
95%
MoneyTree
TM
China TMT Report Q1/Q2 2015
35
Investments by region
During Q1 and Q2 2015 in the
Telecommunications and Mobile
sector, Beijing took the top spot with
91 deals and total deal value of
US$1.39 billion. Shanghai took second
place with 51 deals. There were 24
deals in Zhejiang, 23 deals in Shenzhen
and 11 deals in Guangdong (excluding
Shenzhen), respectively. From the
perspective of deal values, Shenzhen
ranked third, with a total deal value of
US$61 million and Zhejiang came
fourth. The largest single deal was
US$600 million provided to a wellknown taxi hailing app enterprise in
Beijing.
Figure 58: The top five regions for investment in the Telecommunications
and Mobile sector Q1/Q2’15 (Deal volume/Deal value)
US$m
0
Deal volume
36
500
Beijing
91
Zhejiang
Province
51
Shanghai
24
$61
Shenzhen
23
$38
Guangdong
Province
11
MoneyTree
TM
1000
1500
$1386
$315
$27
China TMT Report Q1/Q2 2015
5. A close look at
investments in Mobile
The Mobile subsector includes Mobile
Entertainment, Mobile Advertising,
Mobile Shopping, Mobile Healthcare,
Mobile Technology, Mobile
Education, Mobile Services, Mobile
Social Media, Mobile Finance and
Mobile Messaging.
Mobile
Mobile Advertising
Education
Mobile
Entertainment
(Including Mobile Video,
Mobile Music, Mobile
Gaming, etc.)
Mobile
Shopping
Mobile
Technology
Mobile Finance
Mobile Services
(Including Mobile Travel
Services, Mobile
Housekeeeping Services)
Mobile Healthcare
Mobile Messaging
Mobile Social Media
MoneyTree
TM
China TMT Report Q1/Q2 2015
37
Deal volume and value
Deal volume and value
Q1 2015
Q2 2015
The total number of deals in the Mobile
subsector was 204, with a total value of
US$1.24 billion.
The total number of deals in the Mobile
subsector was 97, with a total value of
US$853 million.
Mobile Services: 29 deals, 14% of the
total; deal value of US$701 million,
57% of the total.
Mobile Entertainment: 15 deals, 16%
of the total; deal value of US$38.66
million, 5% of the total.
Mobile Advertising: 19 deals, 9% of
the total; deal value of US$130 million,
10% of the total.
Mobile Services: 24 deals, 25% of the
total; deal value of US$468 million,
55% of the total.
Mobile Entertainment: 29 deals, 14%
of the total; deal value of US$120
million, 10% of the total.
Mobile Social Media: 12 deals, 13% of
the total; deal value of US$27.99
million, 3% of the total.
Mobile Social Media: 44 deals, 22% of
the total; deal value of US$60.39
million, 5% of the total.
Mobile Technology: 5 deals, 5% of the
total; deal value of US$27.73 million,
3% of the total.
Mobile Technology: 19 deals, 9% of
the total; deal value of US$81.24
million, 7% of the total.
Mobile Advertising: 7 deals, 7% of the
total; deal value of US$139 million,
16% of the total.
Mobile Shopping: 11 deals, 5% of the
total; deal value of US$29.13 million,
2% of the total.
Mobile Education: 4 deals, 4% of the
total; deal value of US$3.29 million,
1% of the total.
Mobile Education: 5 deals, 2% of the
total; deal value of US$21.30 million,
2% of the total.
Mobile Finance: No deals in Q2 2015.
Mobile Healthcare: 8 deals, 4% of the
total; deal value of US$8.05 million,
1% of the total.
Mobile Finance: 1 deal, 1% of the
total; deal value of US$0.16 million,
0% of the total.
Mobile Messaging: No deals in Q1
2015.
Undisclosed: 39 deal, 20% of the total;
Mobile Shopping: 7 deals, 7% of the
total; deal value of US$45.47 million,
5% of the total.
Mobile Healthcare: 7 deals, 7% of the
total; deal value of US$39.79 million,
5% of the total.
Mobile Messaging: 2 deals, 2% of the
total; deal value of US$17.97 million,
2% of the total.
Undisclosed: 14 deal, 14% of the total;
deal value of US$44.87 million, 5% of
the total.
Figure 59: Deal value by Mobile Internet subsegments Q3 2012-Q2 2015
US$m
1,400
$1,386
$1,239
1,200
1,000
$861
800
600
$448
400
200
$197
$94
$85
$67
$853
$482
$177
$76
0
Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14 Q3’14 Q4’14 Q1’15 Q2’15
38
MoneyTree
TM
China TMT Report Q1/Q2 2015
Mobile Messaging
Mobile Education
Mobile Finance
Mobile Social Media
Mobile Services
Mobile Entertainment
Mobile Technology
Mobile Healthcare
Mobile Shopping
Mobile Advertising
Mobile Services, Mobile
Entertainment, Mobile Healthcare,
and Mobile Social Media were the
four pillars of the Mobile subsector.
Mobile services: Ranking first, with
taxi-hailing apps still playing the
leading role.
In H1 2015, taxi-hailing apps
continued to be the major investment
in the Mobile Services subsector. In H1
2015, a well-known taxi-hailing apps
company obtained US$742 million in
total. In H1 2015, Mobile Services deal
value was still at the very high level of
US$1.17 billion.
Figure 60: Deal volume by Mobile subsegments Q3 2012-Q2 2015
50
44
45
40
35
30
Along with the continuous
development of the Mobile subsector,
various apps emerged one after
another, and Mobile Advertising was
gradually becoming an important
channel for merchants to reach out to
clients. In H1 2015, the deal volume
and value of Mobile Advertising had
reached the highest since 2012. In H1
2015, the deal volume and value rose
by 321% and 73%, respectively.
29 29
25
20
18
20
20
5
0
24
8
8
5
33
2 2
8
6 6
4 3 3 4
2 2
22
1 1
10
9
8
66
6
6 6
33
3
33
2
22 2
11
11 1 1 1
1919
16
15
10
20
19
15
10
29
23
9
8 8 9
6 5
11 1 1
3
1
10
15
14
12
9
8
6
5
44
4
3
3
12
11
8
777
5
4
5
1
2
Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14 Q3’14 Q4’14 Q1’15 Q2’15
Mobile Messaging
Mobile Finance
Mobile Education
Mobile Technology
Mobile Entertainment
Mobile Advertising: Ranking second,
with new marketing channels
becoming the new investment
hotspot.
31
29
Mobile Social Media
Mobile Healthcare
Mobile Services
Mobile Shopping
Mobile Advertising
Mobile Entertainment: Ranking
third, but cooling down.
Mobile Entertainment can be
subdivided into games, videos,
photoshop (PS), music, reading and so
on. In recent years, Mobile
Entertainment transformed from a
singular model to a complex model.
Mobile Entertainment has been
ranking third since 2014 within the
Mobile subsector. The Mobile
Entertainment kept stable in Q1 2015,
with the deal volume and value of 29
deals and US$120 million respectively.
However, Mobile Entertainment in Q2
cooled, with the deal volume and value
decreasing 48% and 68%, respectively,
compared to Q1.
Mobile Social Media: Various social
platforms emerging one after
another, becoming the hot
investment area again.
As the most popular social form, it
seemed that various topics in life could
be shared and communicated through
Mobile Internet, and the occurrence of
various mobile social apps brought
investors more choices and
opportunities. In H1 2015, the deal
volume rose by 115% compared to H2
2014, and the deal volume was 44
deals in Q1, which created a new
historical high since 2012 when we
started to track investment trends;
since almost all of the investments
were at the early stage and average
single deal value was small, the deal
value in H1 2015 only increased by 9%
compared to H2 2014.
PwC Viewpoints
In 2014, Mobile Services, led by taxi-hailing apps, turned white-hot, and various taxi-hailing apps gradually gained
public recognition. In 2015, the deal value of taxi-hailing apps in Mobile Services still took the lead in the Mobile
subsector.
In Q1 2015, the deal volume and value of Mobile Advertising doubled that of Q4 2014. Various apps emerged one after
another, and Mobile Advertising was gradually becoming an important channel for merchants to reach clients.
Being a new bright spot in H1 2015, Mobile Social Media was one of the major trends for Internet development. Mobile
Social Media might further integrate with Mobile Advertising and Mobile Entertainment to become more than an
information communication platform. We are looking forward to the sharp increase in the deal value and volume of
Mobile Social Media in the future.
MoneyTree
TM
China TMT Report Q1/Q2 2015
39
6. Methodology and definitions
TMT is an acronym for
Telecommunications, Media and
Technology. In this report, we have
carried out analysis of the three most
active sectors within TMT. They are
Technology, Internet and
Telecommunications and Mobile.
Definitions
Internet Finance: E-payment
Technology sector
Telecommunications and Mobile
sector
This report covers Q1 and Q2 2015.
However, in order to show trends and
make comparisons in the industry, we
have included data from the second
half of 2012 to the year of 2014. Deals
that did not disclose the specific
investment period, deal value or
investment stage were excluded from
the relevant analysis in order to
maintain the accuracy of the report.
Software: Software applications for
business or consumer use
All data in this report was provided by
Zero2IPO Research.
Electronics & Optoelectronics
Devices: Optoelectronic components,
optoelectronics, electronics, and power
supply
IT Services: IT consultation, software
outsourcing, computer repair,
computer and network security
Semiconductor: IC design, IC testing
and packaging, IC equipment
manufacturing
Hardware: Computer hardware,
computer peripherals, network
equipment
Internet sector
E-commerce: B2C, B2B, C2C
Internet Services: Online travel
services, online recruitment services,
online housekeeping services, etc.
Internet Marketing: Search engine,
digital ad agency work and Internet
marketing services
MoneyTree
TM
Other Telecommunications
Subsectors: Mobile operators, fixedline operators
Mobile: Mobile entertainment, mobile
advertising, mobile shopping, mobile
healthcare, mobile technology, mobile
education, mobile services, mobile
social media, mobile finance, mobile
messaging
Entertainment and Media sector
Traditional Media: Newspaper,
magazines, publishing
Outdoor Media: Outdoor print ads,
outdoor LED TV, mobile TV, building
TV
Video Production and Distribution:
Film and television production and
distribution
Advertising: Ad agencies, media
buying
Online Education: e-learning, online
classroom, etc.
Cultural Exchange: Cultural exchange
agency, etc.
Online Entertainment: Online
gaming, online video, online music
Entertainment & Leisure: Animation
and other industries
Social Media: BBS/Forum, online
networking
40
Telecom Equipment and Terminals:
Communication equipment, terminals,
software
China TMT Report Q1/Q2 2015
Stage of development
Exits
Early stage: This stage varies from one
to five years while the product or
concept is under development and not
yet in mass and commercial
production. During this stage, funds
are mainly used for acquiring
production equipment and developing
products as well as marketing and
setting up management systems.
Initial public offering (IPO): This
includes the sale of the PE or VC
investors’ equity stake in an unlisted
company through its first public
offering of stock.
Expansion stage: The investment
period at this stage usually lasts about
two or three years. The product or
service is in production and
commercially available. The company
generally needs more funds to further
develop the product, as well as to
expand facilities and production.
Inventory planning and marketing
efforts are also ramped up.
Late stage: During this stage, the
company has grown its operating
revenue, and is more likely to be, but
not necessarily, profitable. The
company may have plans to go public.
The main purpose of financing is to
seek capital to grow capacity, and to
introduce shareholders with industry
experience and influence, thereby
increasing corporate recognition and
attracting shareholders. The company
will aim to improve its financial
structure and management team in
preparation for listing. At this stage,
the investment is low risk, but has a
lower chance of high returns.
Strategic sale: This includes the sale of
the PE or VC investors’ equity stakes
(or the entire investee company itself )
to a third-party company.
Management buy-out: The purchase
of a company by its management
through either debt-credit finance or
stock transaction, which results in
relevant changes in corporate
ownership, control, residual claim and
assets, in order to alter the structure of
corporate proprietary rights.
Secondary sale: Any purchase of the
PE or VC investors’ equity stakes by
another PE or VC investors constitutes
secondary sale.
PIPE (private investment in public
equity): PE investments in publicly
listed companies via preferential
allotments or private placements, and
the acquisition of shares by PE firms
via the secondary market.
MoneyTree
TM
China TMT Report Q1/Q2 2015
41
7. Contacts
If you’d like to discuss what’s
happening in your particular
technology market or how PwC might
be able to help your company meets its
challenges, please reach out to one of
the technology industry leaders listed
here.
Shenzhen
Wilson Chow
PwC China/Hong Kong TMT Leader
+86 (755) 8261 8886
[email protected]
Beijing
Qin Zhang
+86 (10) 6533 2098
[email protected]
Shanghai
Jianbin Gao
PwC China TMT Leader
+86 (21) 2323 3362
[email protected]
Roland Xu
+86 (21) 2323 2588
[email protected]
Frank Lin
+86 (21) 2323 2955
[email protected]
MoneyTree TM China TMT Report
Editorial Team
Frank Lin
Partner, TMT
[email protected]
Stacy Zhang
Marketing Manager, Private Equity
& TMT
[email protected]
Global
Raman Chitkara
+1 408 817 3746
[email protected]
Korea
Hoonsoo Yoon
+82 2 709 0201
[email protected]
Australia
Rod Dring
+61 2 8266 7865
[email protected]
Netherlands
Ilja Linnemeijer
+31 (0) 88 792 49 56
[email protected]
Brazil
Estela Vieira
+55 1 3674 3802
[email protected]
Russia
Yury Pukha
+7 495 223 5177
[email protected]
Canada
Christopher Dulny
+1 416 869 2355
[email protected]
Singapore
Mark Jansen
+65 6236 7388
[email protected]
China
Jianbin Gao
+86 21 2323 3362
[email protected]
Taiwan
Andy Chang
+886 (2) 2729 6666 ext 25216
[email protected]
France
Pierre Marty
+33 1 5657 5815
[email protected]
UAE
Philip Shepherd
+97 1 4304 3501
[email protected]
Germany
Werner Ballhaus
+49 211 981 5848
[email protected]
UK
Jass Sarai
+44 (0) 1895 52 2206
[email protected]
India
Sandeep Ladda
+91 22 6689 1444
[email protected]
US
Pierre-Alain Sur
+1 646 471 6973
[email protected]
Japan
Masahiro Ozaki
+81 3 5326 9090
[email protected]
Catherine Gu
Senior Associate, TMT
[email protected]
42
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TM
China TMT Report Q1/Q2 2015
MoneyTree
TM
China TMT Report Q1/Q2 2015
43
PwC – Gobal
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About PwC’s Technology Institute
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This content is for general information purposes only, and should not be used as a
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