Q2 2019 Investment in Chinese Internet Startups Down 71% YoY to USD 8.1 Bln
CAICT, 7/19/19
Capital markets for Chinese internet startups tightened further in Q2 2019, with the total amount of investment and financing disclosed for the quarter coming to USD 8.1 bln, up 3.8% QoQ, but down 70.8% YoY, reports the Policy and Economics Research Institute of the China Academy of Information and Communications Technology (CAICT), a department of China's Ministry of Industry and Information Technology (MIIT). The total number of investments increased by 8.6% QoQ, but decreased by 35.8% YoY.
Investment & Financing of Internet Startups in China
| Period | Total Investment Amount (USD Bln) | QoQ Change | Total Number of Deals | QoQ Change |
|---|---|---|---|---|
| 2018 Q2 | 27.8 | 770 | ||
| 2018 Q3 | 15.6 | -43.9% | 963 | 25.1% |
| 2018 Q4 | 14.2 | -9.0% | 539 | -44.0% |
| 2019 Q1 | 7.83 | -44.9% | 455 | -15.6% |
| 2019 Q2 | 8.13 | 3.8% | 494 | 8.6% |
The bulk of the investment and financing in China's internet startups in Q2 2019 continued to go to early stage ventures, with seed round and Series A investments combined comprising 75.6% of the total, unchanged from Q1 2019 and up only 0.1 percentage point from 75.5% in Q2 2018.
| Period | Seed | Series A | Series B | Series C | Series D | Series E or Above |
|---|---|---|---|---|---|---|
| 2018 Q2 | 43.9% | 31.6% | 13.2% | 8.2% | 2.4% | 0.8% |
| 2018 Q3 | 49.6% | 27.6% | 14.3% | 5.0% | 2.2% | 1.2% |
| 2018 Q4 | 50.9% | 27.7% | 12.4% | 5.4% | 1.9% | 1.7% |
| 2019 Q1 | 50.2% | 25.4% | 13.3% | 6.4% | 3.4% | 1.2% |
| 2019 Q2 | 47.9% | 27.7% | 14.3% | 6.8% | 2.3% | 0.9% |
The top segments in Q2 2019 by total number of deals were (number of deals in parentheses):
- Enterprise Services (85)
- Internet Finance (63)
- E-commerce (62)
- Online Education (60)
- Other (58)
- Online News/Information (30)
- Online Medical & Health
- IT Services
- Social Networking
- Information Security
- Online Travel
- Online Advertising/Marketing
- Online Music & Video
- Local Life
- Application Infrastructure
- Sports, Culture, & Entertainment
- Online Gaming
- Online Real Estate
- Software Tools
- Search Engines
- E-government
Segments that saw a particularly dramatic increase in total investment compared to Q1 2019 included IT Services, Online News/Info, and Information Security, garnering USD 720 mln, USD 1.38 bln, and USD 655 mln, respectively, in Q2 2019. In contrast, segments that saw a marked decrease in total investment compared to Q1 2019 included Online Education, Enterprise Services, and E-commerce.
Keywords: funding Q2 2019 Internet investment CAICT national statistics
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