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Venture Capital Report
China | 2Q | 2015
Venture Capital Report The following report presents Dow Jones VentureSource’s quarterly findings for Chinese
venture capital fundraising, investment, valuation, and liquidity. The included charts and
graphs offer a comprehensive view of the trends currently affecting the venture capital
market.
Highlights for 2Q 2015 include:
Chinese venture capital fundraising halved from previous quarter despite an increase in fund closings;
Venture capital investment into Chinese companies eclipses amount raised in each of the previous two
quarters to reach record high;
Exit activity improves as mergers and acquisitions (M&As) rise and initial public offerings (IPOs) surge
to highest number since 4Q 2010.
2
Venture Capital Report
FUNDRAISING
3
2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15
Amount Raised ($B) $0.37 $0.95 $1.07 $0.64 $0.14 $0.50 $1.24 $0.99 $3.25 $0.48 $0.35 $2.46 $1.23
Number of Funds 12 12 16 5 6 10 15 9 14 10 8 12 18
0
2
4
6
8
10
12
14
16
18
20
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50Chinese VC Fundraising
(2012 – 2015) Based on multiple closings
Chinese Venture Capital Fundraising Falls in 2Q 2015 Despite Rise in Closings
Chinese venture fundraising fell to $1.2 billion across 18 funds during 2Q 2015, a decline of 50% in dollars
raised despite a 50% increase in the number of fund closings.
In comparison with the same period last year, dollars raised fell by 62%. However, the number of venture funds
with closings improved by 29%.
Huochai Kuailu Investment Fund was the largest of 2Q 2015, raising $484 million and accounting for 39% of the
total amount raised in funds for the quarter.
Venture Capital Report Largest VC Funds Raised in 2Q 2015
FUNDRAISING
4
Firm Name Fund Name
Amount ($M)
Closed in 2Q
Location Offering Status
Fund Type Fund Category Closing Type
Shanghai Kuailu Investment Group
Huochai Kuailu Investment Fund
$484.14 Shanghai Open Multi-stage
venture capital
Venture Capital First
Ant Financial Service Group
Ant Ecosystem Co-win Fund
$160.94 Hangzhou Open Multi-stage
venture capital
Venture Capital First
Source Code Capital Source Code Fund II
(USD) LP $150.00 Beijing Closed
Early-stage venture capital
Venture Capital
Final
Shenzhen Fukun Venture Capital Co.
Ltd.
Shenzhen Qianhai Tianhe Cultural
Investment Fund $80.47 Shenzhen Open
Multi-stage venture capital
Venture Capital
First
Qiming Venture Partners
Qiming Venture Partners III Annex
Fund LP $75.00 Shanghai Closed
Multi-stage venture capital
Venture Capital
Final
Venture Capital Report
FINANCING
5
Equity Financings into China–
based, VC-backed Companies
(2012 – 2015)
2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15
Amount Raised ($B) $1.54 $0.96 $1.45 $0.83 $1.18 $1.53 $1.51 $2.43 $3.65 $3.58 $7.13 $6.87 $8.47
Number of Deals 85 68 91 87 110 137 153 146 192 272 315 251 359
0
50
100
150
200
250
300
350
400
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
$8.00
$9.00
Venture Capital Investment in China - 2Q 2015
Chinese venture-backed companies raised $8.5 billion in 359 deals during 2Q 2015, a rise of 23% in capital
invested and 43% in number of deals completed from 1Q 2015.
Compared with 2Q 2014, dollars invested more than doubled while deal flow improved by 87%.
Consumer Services was the strongest sector of the quarter in terms of attracting investment with Business and
Financial Services in second. The sectors garnered 60% and 26% of all dollars invested during 2Q 2015
respectively.
Venture Capital Report
FINANCING
6
Equity Financings into China–based, VC-backed Companies, by Round Class
(2012 – 2015)
Number of Deals
2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15
Seed 6 5 11 8 13 20 17 22 20 22 27 13 7
First 31 29 45 41 60 74 86 80 94 149 173 130 192
Second 20 13 18 15 14 21 19 24 44 57 63 56 81
Later 21 20 13 14 12 13 25 13 22 36 36 41 53
Restart 1 0 0 0 1 0 0 0 0 0 0 0 0
0
20
40
60
80
100
120
140
160
180
200
Venture Capital Report
FINANCING
7
2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15
Seed $3 $1 $8 $5 $13 $16 $19 $25 $29 $26 $31 $14 $9
First $358 $269 $219 $184 $309 $355 $489 $536 $669 $792 $1,374 $850 $1,715
Second $384 $132 $170 $284 $194 $288 $233 $596 $866 $1,186 $1,537 $1,506 $2,168
Later $750 $555 $1,048 $297 $408 $280 $749 $322 $1,671 $1,503 $3,756 $4,436 $3,452
Restart $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
Equity Financings into China-based, VC-backed Companies, by Round Class
(2012 – 2015)
Amount Raised ($M)
Venture Capital Report
FINANCING
8
Equity Financings into China-based, VC-backed Companies
(2012 – 2015)
Median Equity Deal Size ($M)
2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15
Median Equity Deal Size ($M) $10.15 $6.28 $2.39 $4.74 $3.63 $3.26 $4.00 $5.00 $10.00 $4.84 $8.18 $7.98 $9.66
$0.00
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
Venture Capital Report
FINANCING
9
28%
2%
48%
5%
1%
16%
Business and FinancialServices
Consumer Goods
Consumer Services
Energy & Utilities (0%)
Healthcare
Industrial Goods & Materials
Information Technology
2Q'15 Industry Breakdown
By Number of Deals
Equity Financings into China-based, VC-backed Companies, by Industry Group
(2Q 2015)
Consumer Services companies took just over $5 billion through 173 deals during 2Q 2015, a rise of 11% in
dollars invested and 47% in deals completed from 1Q 2015. The sector attracted 48% of all deals completed for
the quarter and a 60% share of total amount invested.
Business and Financial Services companies raised the second highest proportion of investment during 2Q
2015. The sector garnered $2.2 billion across 99 deals; a 52% increase in dollars accrued and a 77%
improvement in deal flow from the prior quarter.
The Information Technology sector placed third for investment, receiving $852 million across 57 deals. Sector
investment rose by 54% from 1Q 2015 while deal flow improved by 21%. The sector’s investment figure
represents 10% of the total equity financing into China-based VC-backed companies for 2Q 2015.
26%
2%
60%
2%
10% Business and FinancialServices
Consumer Goods
Consumer Services
Energy & Utilities (0%)
Healthcare
Industrial Goods & Materials(0%)
Information Technology
2Q’15 Industry Breakdown
By Amount Raised
Venture Capital Report
FINANCING
10
Co. Name Industry Group
Industry Segment
Industry Code Brief Description Close Date
Round Type
Raised ($M)
Round Investors (* denotes lead)
Tongcheng Network
Technology Co. Ltd.
Consumer Services
Travel and Leisure
Travel Arrangement/Tourism
Provider of an online platform for travel
services. 6/30/2015 Corporate $577.35 Dalian Wanda Group *
Zhubajie Network Management
Co. Ltd.
Consumer Services
Consumer Information
Services Online Communities
Provider of an online trading platform for users to post tasks and projects and find people to solve
the tasks.
6/15/2015 Second $419.31 Chongqing Boen Technology Co. Ltd.,
Cybernaut Capital Management*
Tongcheng Network
Technology Co. Ltd.
Consumer Services
Travel and Leisure
Travel Arrangement/Tourism
Provider of an online platform for
travel services. 6/30/2015 3rd $390.28
CITIC Capital Holdings Ltd., Tencent Collaboration Fund
Shenzhou Ucar (Tianjin) Co. Ltd.
Consumer Services
Travel and Leisure
Transportation Services
Provider of chauffeured car services in China.
6/30/2015 First $250.00 CAR Inc.*, Legend Capital Co. Ltd.,
Warburg Pincus LLC
Lakala.com Inc. Business and
Financial Services
Financial Institutions and
Services
Payment/ Transactional
Processing
Provider of offline e-payment services in
China. 6/22/2015 Corporate $241.91
China Continent Property & Casualty Insurance Co. Ltd., China RE, China Taiping, Civil Aviation Development
Fund
Top 5 Deals into China-based VC-backed Companies (2Q 2015)
Venture Capital Report
FINANCING
11
18 17
16
13
8 8
0
2
4
6
8
10
12
14
16
18
20
22
Sequoia Capital IDG CapitalPartners
MatrixManagement
Corp.
Source CodeCapital
Shunwei CapitalPartners
MorningsideGroup (Holdings)
Ltd.
Most Active Investors for China-based, VC-backed Companies (2Q 2015)
Number of Deals
Venture Capital Report
LIQUIDITY
12
Exit Opportunities for Chinese
VC-backed Companies
(2012 – 2015)
Venture M&A and IPO Market Activity in China (2Q 2015)
17 M&As were completed by venture-backed companies in China during 2Q 2015, eight more than in the
previous quarter and nine more than in 2Q 2014.
The largest M&A of the quarter was Jiangsu Sanyou Group’s reverse merger with healthcare check-up services
provider Meinian Onehealth Healthcare Group in April for $894 million.
44 VC-backed companies went public during 2Q in China, the most in a single quarter since 50 IPOs were
completed during 4Q 2010.
0 10 20 30 40 50 60 70
2Q'12
3Q'12
4Q'12
1Q'13
2Q'13
3Q'13
4Q'13
1Q'14
2Q'14
3Q'14
4Q'14
1Q'15
2Q'15
2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15
IPOs 15 12 4 0 2 1 12 27 11 9 15 22 44
M&As 3 3 2 7 3 6 7 3 8 6 6 9 17
Venture Capital Report
LIQUIDITY
13
Top 3 M&As in China (2Q 2015)
Company Name
Location Brief Description Industry Code Industry Segment
Industry Group
Close Date
Round Type
Amount Paid ($M)
Acquirer
Meinian Onehealth Healthcare
(Group) Co. Ltd.
Shanghai Provider of preventive healthcare check-up
services in China. Outpatient Facilities Healthcare Services Healthcare 4/30/2015
Reverse Merger
$894.04 Jiangsu Sanyou Group Co. Ltd.
Nineyou Information Technology
(Shanghai) Co. Ltd.
Shanghai
Provider of an interactive
entertainment portal site.
Entertainment Consumer
Information Services
Consumer Services
6/11/2015 Acquisition $660.37
Hunan TV & Broadcast
Intermediary Co. Ltd.
Hefei Guoxuan High-tech Power Energy Co. Ltd.
Hefei Manufacturer of
lithium batteries in China.
Power Supplies Electronics and
Computer Hardware
Information Technology
5/31/2015 Reverse Merger
$539.33
Jiangsu Dongyuan
Electrical Group Co. Ltd.
Venture Capital Report
LIQUIDITY
14
Chinese VC-backed IPO Activity
(2012 - 2015)
Chinese VC-backed IPOs (2012-2015)
44 VC-backed companies went public during 2Q in China, doubling the number for 1Q 2015 and quadruple the
number completed in 2Q 2014. Dollars raised through listings more than tripled the previous quarterly total to
reach $5.6B. The figure doubled the $2.75 billion raised through IPOs during 2Q 2014 and is the highest
quarterly figure since 1Q 2011 ($6B).
China National Nuclear Power Co. Ltd. had the largest IPO of the quarter, raising over $2.1 billion for its June
listing on the Shanghai Stock Exchange. The nuclear power provider’s IPO represents 38% of the total raised
through VC-backed IPOs in China during 2Q 2015.
2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15
Raised ($B) through IPO $1.63 $1.05 $0.48 $0.00 $0.29 $0.05 $1.63 $2.05 $2.75 $1.06 $1.44 $1.72 $5.56
Number of IPOs 15 12 4 0 2 1 12 27 11 9 15 22 44
0
5
10
15
20
25
30
35
40
45
50
$0.00
$1.00
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$5.00
$6.00
Venture Capital Report
LIQUIDITY
15
Company Name
Location Brief Description Industry Code Industry Segment
Industry Group
Close Date Raised
through IPO ($M)
Exchange
China National Nuclear Power Co.
Ltd. Beijing
Provider of nuclear power services across
China. Nuclear Energy
Non-Renewable Energy
Energy and Utilities
6/10/2015 $2,127.26 SSE:601985
Jiangsu Broadcasting
Cable Information Network Co. Ltd.
Nanjing
Provider of digital television and pay-
television (TV) programs.
General Media/Content
Media and Content
Consumer Services
4/28/2015 $527.00 SSE: 600959
Yunnan Water Investment Co.
Ltd. Kunming
Provider of municipal wastewater treatment
and water supply facilities in Yunnan,
China.
Environmental Engineering/Services
Construction and Civil Engineering
Business and Financial Services
5/27/2015 $215.12 HKEx:06839
Top 3 IPOs in China (2Q 2015)
Venture Capital Report
ABOUT US
Dow Jones VentureSource helps venture capitalists, corporate development executives, investment bankers and service providers find deal and partnership opportunities, perform comprehensive due diligence and examine trends in venture capital investment, fund-raising and liquidity. It provides accurate, comprehensive data on venture-backed companies – including their investors and executives – in every region, industry and stage of development throughout the world. The investment figures included in this release are based on aggregate findings of Dow Jones' proprietary research and are contained in VentureSource. This data was collected through surveys of professional firms, interviews with company executives, and from secondary sources. These venture capital statistics cover equity investments into early stage, innovative companies and do not include companies receiving funding solely from corporate, individual, and/or government investors. Figures contained throughout the report current at time of editorial but are subject to change without notice. No statement herein is to be construed as a recommendation to buy or sell securities or to provide investment advice.
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