TMT deals fall, but value steady in H1

Source: Xinhua | 2018-10-18

Private equity and venture capital investment in the telecommunications, media and technology sector over the first half in China’s mainland saw their value remain steady, despite a drop in the number of deals, a report by PricewaterhouseCoopers released yesterday showed.

The number of PE/VC deals fell 17 percent from the second half of last year to 2,096 as investors became increasingly cautious, the PwC MoneyTree report said.

But the TMT sector continued to play a key role in the economy, accounting for about half of all PE/VC investments over the six months, excluding one-off cases.

“As the government has been encouraging innovation and entrepreneurship with a series of supportive industry policies, private equity and venture capital investors boosted investment in opto-electronics, integrated circuit and IC design, and digital content, as well as the Japanese manga graphics, animation, and game sectors,” said Gao Jianbin of PwC China.

The number of large deals — over US$100 million — was 56, little changed from the second half of last year. The average value per deal of large-sized deals exceeded US$400 million.

In the first half of 2018, PE/VC deals involving startups accounted for 54 percent of the total for TMT, the highest among all categories.

All four sub-sectors in the TMT industry saw a decline in the number of PE/VC deals amid the weakening overall environment. The Internet and mobile Internet sub-sector was still the favorite among investors, attracting 47 percent of total first-round investments.