Despite a dip in fundraising in the COVID-battered first quarter of 2020, Greater China’s dealmaking market showed resilience, overall, in 2020. Chinese startups raised at least $56.2 billion across 1,193 transactions in the entire year.
As the pandemic’s impact started to recede towards the end of the first half of 2020, dealmaking activity bounced back.
A combined $38.1 billion was raised across 792 deals in the second half of the year — a 110% increase in deal value and a 97.5% growth in deal count compared to H1.
Average deal size also climb quarter-on-quarter from Q2 to Q4, as investors grew more ambitious, doling out bigger-sized cheques.
Even as firms in the pharmaceutical space gained favour, companies in the internet and education/training industries topped in terms of funds raised. Meanwhile, software firms topped in terms of deal count.
A similar story unfolded in the public markets, as listing activities of mainland companies were subdued during the first quarter of the year, weighed down by pandemic-related movement restrictions and poor investor sentiment. Healthcare-related companies were the exception, taking advantage of the sudden surge in valuations.
Meanwhile, some other companies adapted to prepare for better days.
By the second quarter, IPOs started to trickle back into Hong Kong’s and Shanghai’s exchanges. By the third quarter, IPO activities by mainland companies also resumed on US stock exchanges.
With 538 listings in the year, mainland China-based companies raised $129.8 billion in 2020, exceeding the total listings (332) and funds raised ($69.4 billion) in 2019.
During the year, China continued to deepen its capital markets reforms with the expansion of registration-based IPOs in the ChiNext market. The first batch of registration-based IPOs of 18 enterprises debuted in Shenzhen on 24 August as part of the country’s capital markets reform.
Given the slew of mega deals seen in the private market space last year, alongside Greater China’s efforts to grow its capital markets, we expect a slew of mega IPO listings for 2021.
The Greater China Deal Review: Q4 2020 report covers fundraising by startups in the region in Q4 and the entire 2020, with extensive data on:
- Top deals of 2020
- Top sectors for investments
- Top IPOs in China
- IPOs of mainland companies in the US
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