In the first half (H1) of 2017, the China TMT industry experienced one high point after another with bicycle sharing becoming popular, social gaming continuing to expand, and short video gaining momentum. After the slight drop in the second half (H2) of 2016, private equity and venture capital (PE/VC) investments in the TMT industry rebounded significantly in value and volume in H1 2017. Significant financing transactions of Unicorn companies took place again in H1 of 2017.
In Q1 2017, there were 951 PE/VC investments in TMT, accounting for 45% of PE/VC investments in all industries in the quarter, and up 73% from Q4 2016. The Q1 2017 deal value was US$ 15.37 billion, up 94% from Q4 2016, and accounted for 49% of the Q1 overall PE/VC investments.
In Q2 2017, there were 631 PE/VC investments in TMT, accounting for 27% of PE/VC investments in all industries in the quarter, and down 34% from Q1 2017. The Q2 2017 deal value was US$15.38 billion, about the same as Q1, and 60% of the Q2 overall PE/VC investments.
A great number of Unicorns received financing in H1 2017, arousing enthusiasm in investors and increasing both deal value and deal volume. Internet and Mobile Internet remained the most attractive sub-sector in TMT, driven by trends in sharing services penetrating everyone’s daily lives, and short videos and social platforms increasingly popular. Entertainment and Media growth was steady. As video production enterprises attracted extensive investments with continued growth in consumption in entertainment. E- sports also became popular, and with the rapid development of games on mobile devices, investors were also draw to companies undertaking game live, game related products, etc.
Q1 and Q2 2017 recorded 35 and 15 exits respectively. As such, H1 2017 with 50 exists total saw a 25% decline in exits from 67 exits in H2 2016.