MoneyTree™ China TMT Report

Q1 / Q2 2015

In the first half (H1) of 2015, the Telecommunications, Media and Technology (TMT) industry in China continued the good momentum developed in the second half (H2) 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 fastest-growing industries in China.

While constantly changing people's way of life and work efficiency, the TMT industry is also having revolutionary impacts on the operating modles 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.

Key findings

PE/VC investments in TMT industry

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.

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 2014.

Investments by TMT sector

PE/VC exits in the TMT industry

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.