March megadeals breathe life into Greater China’s venture scene in Q1

Beijing, China. Source: Li Yang/Unsplash

We finally have numbers that show how the COVID-19 pandemic affected the Greater China region’s venture deal momentum in the first quarter of 2020, and as it turns out, it’s complicated.

Investments in February unsurprisingly took a hit, but March ended the quarter with a surprising bang as mainland China began to ease its mobility restrictions.

A total of 135 venture deals of at least $10 million each were announced in the first three months of 2020 in Greater China for a total of $8.65 billion, according to data compiled by DealStreetAsia. The was 77.1 per cent more than the amount invested between Oct 17, 2019, and Dec 31, 2019, the earliest set of records available.

A bumper crop of megadeals defined as those worth $100 million or more and a particularly busy March accounted for a good portion of the dealmaking, and easily helped to offset a quiet February. February happened to coincide with the growing spread of the COVID-19 virus outside of China as well as the imposition of strict restrictions within the mainland.

A good 17 startups announced megadeals during the quarter, of which 10 showed up in March. Billion-dollar deals, led by Beike Zhaofang and Yuanfudao, accounted for two-thirds of the total capital raised during this period.

Yet it might be prudent to season the March numbers with a pinch of salt. To begin with, startups and investors could simply be more enthusiastic about disclosing deals in the midst of a good-news drought.

There are also signs of pressure building in the background. Apart from tighter liquidity conditions due to stricter regulations around fundraising, scandals of high-profile companies such as Chinese coffee chain Luckin Coffee and edtech firm TAL Education are weighing on investor sentiments, especially those outside of Greater China.

Certain sectors are, however, showing signs of resilience. Health tech companies continued to raise cash at a brisk pace, while education technology companies were also active on the funding trail.

Our Q1 report delves further into investment trends in individual sectors and at different funding stages. We also keep an eye on which investors have been busy.

Data is a valuable resource as we try to make sense of these extraordinary times. We look forward to tracking the markets with our readers, especially in the coming quarters.

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.