China gets record $31b in venture capital investment in 2016 despite global woes

Chinese Yuan bank notes. Photo: Bloomberg

Megadeals in China helped bring a record $31 billion in venture capital investment into the country in 2016 despite a sluggish global economy and a sharp drop in the number of new deals, a report showed on Friday.

Venture capital investment in China rose 19 percent to account for around a quarter of the global total of $127 billion last year, even though the number of deals declined 42 percent to just 300, according to KPMG‘s quarterly report on global VC trends.

China saw its two biggest deals for the year in the first half of 2016: $1.2 billion in funding for peer-to-peer lending platform Lufax and Apple‘s $1 billion investment in taxi-hailing app Didi Chuxing.

Despite cautious investor sentiment shown in a 9.4 percent drop in global investment value and a 24 percent slide in deal count in 2016, average investments in China are getting bigger and bigger.

The deal count in China has more than halved over the past three years but investment has tripled from $12 billion in 2014. Beijing alone has attracted $37.3 billion of venture capital since that year, including $18.5 billion in 2016.

The strong performance in China is expected to continue in 2017 with artificial intelligence, where investment is “growing by the day”, a new focus for investors, KPMG said.

It also said Chinese outbound VC investment, especially in the US, is expected to grow at a solid pace driven by Chinese companies’ desire to acquire technologies for use in the home market.

“Investors in Asia are shifting their investment focus,” said Philip Ng, Partner and Head of Technology, KPMG China.

Artificial intelligence, robotics and big data are replacing online-to-offline to be what is grabbing investing attention, while there is also increased focus on fintech, education and healthcare related startups, he said.

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Reuters

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.