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VentureSource
China -- 2Q 2014
VentureSource
2
The following report presents Dow Jones VentureSource’s quarterly findings for Chinese
venture capital fundraising, investment, and liquidity. The included charts and graphs
offer a comprehensive view of the trends currently affecting the venture capital market.
Highlights for 2Q 2014 include:
Chinese venture capital fundraising reached its highest level since 4Q 2011 with the highest number of
fund closings since 4Q 2012;
Quarterly venture investment continued to rise, with deal flow and dollars invested surpassing both 1Q
2014 and 2Q 2013 levels;
While venture-backed mergers and acquisitions (M&As) picked up, initial public offerings (IPOs) fell
substantially from the flurry of listings completed during 1Q 2014.
To view Dow Jones VentureSource’s U.S. data for 2Q 2014, please click here
VentureSource
FUNDRAISING
3
2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14
Amount Raised ($B) $3.76 $3.56 $3.71 $1.29 $0.29 $1.65 $1.25 $0.79 $0.14 $0.88 $0.81 $1.21 $3.06
Number of Funds 33 24 24 14 11 14 16 7 5 11 11 6 13
0
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10
15
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25
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35
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$3.00
$3.50
$4.00Chinese VC Fundraising
(2011 – 2014) Based on multiple closings
Chinese Venture Capital Fundraising Experiences Significant Gains in 2Q 2014
Chinese venture fundraising rose to $3.06 billion across 13 funds during 2Q 2014. The quarter represents the
highest fundraising accumulation since 4Q 2011 and the most number of funds since 4Q 2012.
Venture fundraising for the first half of 2014 compared very favourably to 2013’s equivalent period with $4.27
billion raised across 19 venture capital funds. This equates to a 58% rise in the number of fund closings and
over three times the amount accumulated during the first half of last year.
IDG Capital Partners’ China Venture Capital IV fund was the largest of 2Q 2014, raising $586 million and
accounting for 19% of the total amount for the quarter.
VentureSource Largest VC Funds Raised in 2Q 2014
FUNDRAISING
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Firm Name Fund Name
Amount ($M)
Closed in 2Q
Location Offering Status
Fund Type Fund Category Closing Type
IDG Capital Partners IDG China Venture
Capital Fund IV $586.00 Beijing, China Closed
Early-stage venture capital
Venture Capital
Final
Yunfeng Capital Management Co. Ltd.
Yunfeng Fund II LP $500.00 Shanghai, China Closed Early-stage
venture capital
Venture Capital Final
Legend Capital Co. Ltd. LC Fund VI LP $500.00 Beijing, China Closed Multi-stage
venture capital
Venture Capital Final
Matrix Management Corp. Matrix Partners China III
LP $350.00
Palo Alto, CA, United States
Closed Early-stage
venture capital
Venture Capital Final
Shunwei China Internet Fund LP
Shunwei China Internet Fund II LP
$315.00 Beijing, China Closed Early-stage
venture capital
Venture Capital Final
VentureSource
FINANCING
5
Equity Financings into China–
based, VC-backed Companies
(2011 – 2014)
2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14
Amount Raised ($B) $1.85 $1.60 $1.56 $1.11 $1.43 $0.90 $1.36 $0.70 $1.39 $0.99 $1.60 $2.35 $2.78
Number of Deals 122 115 101 77 78 63 71 63 88 112 116 107 121
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80
120
160
200
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$3.00
Venture Capital Investment in China Continues Rise in 2Q 2014
Investment into Chinese venture-backed companies continued to improve in 2Q 2014, as companies raised
$2.8 billion from 121 deals, equating to a 13% increase in the number of deals and a 19% improvement in
capital invested from the previous quarter.
Compared with 2Q 2013, deal flow improved by 38% while investment doubled.
Investment for the first half of 2014 dwarfs that of the equivalent 2013 period, with $5.1 billion raised compared
with a little over $2 billion. Similarly, deal flow has also risen, from 151 to 228, equating to a 51% increase.
VentureSource
FINANCING
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Equity Financings into China–based, VC-backed Companies, by Round Class
(2011 – 2014)
Number of Deals
2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14
Seed 3 6 6 9 6 4 5 4 9 14 9 6 7
First 69 56 55 39 29 28 35 30 52 63 68 57 58
Second 19 24 15 7 19 13 18 13 13 18 17 20 30
Later 21 24 22 18 18 17 11 12 10 13 20 18 21
Restart 0 0 0 0 1 0 0 0 0 0 0 0 0
0
10
20
30
40
50
60
70
VentureSource
FINANCING
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2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14
Seed $2 $5 $11 $3 $3 $1 $1 $1 $5 $11 $5 $5 $7
First $629 $544 $452 $371 $349 $257 $165 $165 $280 $318 $668 $437 $462
Second $386 $445 $312 $120 $387 $163 $214 $210 $176 $263 $198 $507 $573
Later $484 $592 $677 $479 $650 $484 $979 $278 $285 $267 $715 $449 $1,281
Restart $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1,000
$1,100
$1,200
$1,300
Equity Financings into China-based, VC-backed Companies, by Round Class
(2011 – 2014)
Amount Raised ($M)
VentureSource
FINANCING
8
Equity Financings into China-based, VC-backed Companies
(2011 – 2014)
Median Equity Deal Size ($M)
2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14
Median Equity Deal Size ($M) $9.49 $10.17 $9.43 $7.52 $10.30 $6.14 $3.21 $5.00 $4.95 $3.63 $8.20 $8.63 $16.00
$0.00
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
$14.00
$16.00
$18.00
VentureSource
FINANCING
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18%
5%
48%
3% 2%
25%
Business and Financial Services
Consumer Goods
Consumer Services
Energy & Utilities (0)
Healthcare
Industrial Goods & Materials
Information Technology
2Q'14 Industry Breakdown
By Number of Deals
Equity Financings into China-based, VC-backed Companies, by Industry Group
(2Q 2014)
Consumer Services companies took $1.7 billion through 58 deals during 2Q 2014, an increase of 11% in dollars
invested and 18% in deal flow from 1Q 2014. The sector attracted 48% of all deals completed for the quarter
and a 62% share of total amount invested. The investment figure is the highest it has been for a single quarter
since 1Q 2010.
The Business and Financial Services sector placed second for investment, receiving $462 million across 21
deals for 2Q 2014. While deal flow stayed flat from the 20 completed in 1Q 2014, capital invested in the sector
more than doubled the $221 million accumulated during the prior quarter. The sector investment figure
represents a 17% share of total equity investment into China-based VC-backed companies for 2Q 2014.
The Information Technology sector raised the third highest proportion of investment during 2Q 2014. IT
companies garnered $368 million across 30 deals; a 30% rise in deal flow but a 25% reduction in dollars
invested from the $492 million garnered by the sector during 1Q 2014.
17%
5%
62%
3%
18% Business and FinancialServices
Consumer Goods
Consumer Services
Energy & Utilities (N/A)
Healthcare
Industrial Goods & Materials(0.1%)
Information Technology
2Q’14 Industry Breakdown
By Amount Raised
VentureSource
FINANCING
10
Co. Name Industry Group
Industry Segment
Industry Code Brief Description Close Date
Round Type
Raised ($M)
Round Investors (* denotes lead)
Beijing Sankuai Technology
Co. Ltd.
Consumer Services
Consumer Information Services
Shopping Facilitators
Provider of a web site that offers daily deals on local
goods, services, and events.
5/15/2014 3rd $300.00 Alibaba Capital Partners, General
Atlantic LLC*, Sequoia Capital
Hangzhou Juangua
Network Co. Ltd.
Consumer Services
Consumer Information Services
Shopping Facilitators
Provider of an e-commerce site and
shopping community for women in China.
6/6/2014 3rd $200.00
Banyan Capital, Hopu Investments Management Co. Ltd.*, IDG Capital Partners, Qiming Venture Partners,
Trust Bridge Partners*
Tongcheng Network
Technology Co. Ltd.
Consumer Services
Travel and Leisure Travel Arrangement/
Tourism
Provider of an online platform for travel
services. 4/28/2014 Corporate $200.00 Ctrip.com*
Huaxia Dairy Farm Co. Ltd.
Consumer Goods
Food and Beverage Dairy Products Operator of a dairy farm. 6/30/2014 5th $106.00 GIC Private Ltd.*, Grand River Capital
Management Co. Ltd., Olympus Capital Holdings Asia*
Beijing Byte Dance
Telecommunications Co. Ltd.
Consumer Services
Consumer Information Services
Entertainment
Provider of a personalized news aggregation and
recommendation application.
6/2/2014 3rd $100.00 Sequoia Capital*, Sina Weibo Fund
Top 5 Deals into China-based VC-backed Companies (2Q 2014)
VentureSource
FINANCING
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11
10
8
6 6
0
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9
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12
IDG Capital Partners Sequoia Capital Matrix ManagementCorp.
Qiming VenturePartners
Northern LightVenture Capital
Most Active Investors for China-based, VC-backed Companies (2Q 2014)
Number of Deals
VentureSource
LIQUIDITY
12
Exit Opportunities for Chinese
VC-backed Companies
(2011 – 2014)
Venture M&A and IPO Market Activity in China (2Q 2014)
M&A activity for venture-backed companies in China rose in 2Q 2014 to seven from four completed during the
previous quarter and three in 2Q 2013. 11 were completed in the first half of this year, one up from the
equivalent 2013 period.
The largest M&A of the quarter was the Alibaba Group Holding Ltd. acquisition of mobile Internet software
technology and service provider UCWeb Inc. in June for $3.8 billion.
11 VC-backed companies went public during 2Q 2014 in China, a decline of 59% from the previous quarter.
Despite this fall, however, dollars raised in VC-backed IPOs picked up by 34% to reach $2.75 billion.
0 5 10 15 20 25 30 35
2Q'11
3Q'11
4Q'11
1Q'12
2Q'12
3Q'12
4Q'12
1Q'13
2Q'13
3Q'13
4Q'13
1Q'14
2Q'14
2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14
IPOs 24 29 15 17 15 12 4 0 2 1 12 27 11
M&As 2 4 2 3 3 3 2 7 3 6 6 4 7
VentureSource
LIQUIDITY
13
Top 3 M&As in China (2Q 2014)
Company Name
Location Brief Description Industry Code Industry Segment
Industry Group
Close Date
Round Type
Amount Paid ($M)
Acquirer
UCWeb Inc. Guangzhou
Provider of mobile Internet software technology and
services.
Systems Software Software Information Technology
6/11/2014 Acquisition $3,800.00 Alibaba Group
Holding Ltd.
EGLS Ltd. Beijing Provider of mobile
games. Recreational/Home
Software Software
Information Technology
6/23/2014 Acquisition $480.11
Zhejiang Dragon Pipe
Manufacturing Co. Ltd.
Guangzhou Qisheng
Information Technology
Shenzhen Provider of digital
application services for the health industry.
Clinical Decision Support
Medical Software and Information
Services Healthcare 6/27/2014 Acquisition $104.02
Guiyang Longmaster
Information & Technology Co.
Ltd.
VentureSource
LIQUIDITY
14
Chinese VC-backed IPO Activity
(2011 - 2014)
Chinese VC-backed IPOs (2011-2014)
11 VC-backed companies went public during 2Q 2014 in China, 16 fewer than in 1Q 2014 but still considerably
more than the two listings completed during the second quarter of 2013.
Despite the decline in IPOs for the quarter, a total of $2.75 billion were raised, which is an increase of 34% over
the previous quarter and the highest quarterly figure since 3Q 2011. A total of $4.8 billion have been raised for
Chinese VC-backed IPOs during the first half of this year, the most since the first six months of 2011 when $9.3
billion were raised.
JD.com Inc. had the largest IPO of the quarter, raising $1.3 billion for its May listing on the NASDAQ. The
online consumer electronics retailer’s IPO represents 48% of the total raised through VC-backed IPOs in China
during 2Q 2014.
2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14
Raised ($B) through IPO $3.30 $4.62 $1.66 $1.57 $1.63 $1.05 $0.48 $0.00 $0.29 $0.05 $1.63 $2.05 $2.75
Number of IPOs 24 29 15 17 15 12 4 0 2 1 12 27 11
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VentureSource
LIQUIDITY
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Company Name
Location Brief Description Industry Code Industry Segment
Industry Group
Close Date Raised
through IPO ($M)
Exchange
JD.com Inc. Beijing
Provider of an online retail web site for
consumer electronics and goods in China.
Mixed Retailing Retailers Consumer Services
5/22/2014 $1,311.14 NASDAQ: JD
Jumei International Holding Ltd.
Beijing
Operator of an online shopping platform for
beauty products, apparel, and other lifestyle products.
Shopping Facilitators
Consumer Information
Services
Consumer Services
5/16/2014 $245.08 NYSE: JMEI
Hanhua Financial Holding Co. Ltd.
Chongqing Provider of financial
services in China. Lending
Financial Institutions and
Services
Business and Financial Services
6/19/2014 $240.30 HKEx: 03903
Top 3 IPOs in China (2Q 2014)
VentureSource
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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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