Zhang Yu

JeniZhang13@163.com

OVERALL private equity and venture capital (PE/VC) investment in the telecommunications, media and technology (TMT) sector reached a new high in the first half of 2017, according to the MoneyTree Report released by PwC on Tuesday.

After a lackluster second half of last year, PE/VC investment regained momentum in 2017, with 1,582 PE/VC deals garnering a total of US$30.75 billion in the first half of 2017, demonstrating investors’ confidence in the TMT industry.

Forty-nine deals had a single deal value of over US$ 100 million, up nearly 50 percent from the second half of 2016. Additionally, China’s leading ride-hailing app Didi Chuxing’s US$5.5 billion financing was registered as the largest single deal seen since 2014.

“The outstanding performance of large deals further reflects that investors prefer unicorn companies with leading positions and stable businesses,” said Vincent Cheuk, PwC’s PE leader for its southern China division.

With regards to sub-sectors, Internet and mobile Internet was again positioned front and center, generating deal value of US$21.3606 billion in the first half of 2017.

“With shared transport embedded into the daily life and the growing popularity of short videos, content distribution platforms and mobile games, leading companies in these areas are attracting massive funds,” said Frank Lai, PwC China’s TMT partner.

According to the report, first-round investments in the TMT industry accounted for more than 50 percent of the total. The value of first-round investments posted a moderate increase of 15 percent. But based on historical data since 2014, both volume and value of first-round investments were still at historically low levels.

IPOs were still the dominant exit channel in the TMT industry, which was partly due to the active A-share market and accelerated pace of IPO reviews.