MoneyTree™ China TMT Report

Q3 / Q4 2015

In the second half (H2) of 2015, private equity and venture capital (PE/VC) investment in China's Telecommunications, Media and Technology (TMT) industry increased steadily despite the downturn in the domestic economy.

In H2 2015, the TMT industry continued the momentum seen in H1 2015, with deal value increasing by 8% half over half (HoH) to US$19.01 billion, and deal volume increasing by 11% HoH to 1,435 deals. Over H2 2015, the TMT industry recorded the highest deal value and volume since 2012, with total TMT deal value and volume accounting for 46% and 40% of overall industry investments, respectively. TMT deal value and volume in H2 2015 increased by 8% and 11% respectively, compared with H1 2015.

In Q3 2015, investments in the TMT industry further increased with deal value reaching US$13.29 billion, accounting for half of the overall industry investments, while volume reached a new high, with a total of 954 deals. In Q4, enthusiasm cooled down as investors became more cautious with 481 TMT deals altogether, accounting for US$5.72 billion.

Notably, there were 32 TMT deals with values over US$100 million in H2 2015, and altogether 71 in 2015, compared with just 9 in 2012. The highest single deal value reached US$3 billion in 2015, which represents a historical high that is three times larger than the US$1 billion deal recorded in 2012.

Key findings and outlook

PE/VC investments in TMT industry

In Q3 2015, there were a total of 2,379 PE/VC investments across all industries totalling US$25.63 billion, which represented a decrease of 4% by volume, but an increase of 6% by value compared to Q2 2015.

In Q4 2015, there were a total of 1,242 PE/VC investments across all industries, a decrease of 48% compared to Q3 2015. The deal value of US$15.33 billion decreased by 40% compared to Q3 2015.

Investments by TMT sector

PE/VC exits in the TMT industry

In Q3 2015, there were 69 exits, and one quarter later, the number decreased to 53. There were 49 exits in H1 2015.

In general, the total amount of exits in H2 2015 increased by 149% compared to H1 2015.