Q3 2019 Investment in Chinese Internet Startups Up 15% QoQ, Down 38% YoY
CAICT, 10/14/19
Capital markets for Chinese internet startups began to warm again in Q3 2019, with the total amount of investment and financing disclosed for the quarter coming to USD 9.63 bln, up 15.1% QoQ, but down 38.3% 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 during the quarter came to 498, down 0.6% QoQ and 49.0% YoY.
Investment & Financing of Internet Startups in China
| Period | Investment Total (USD Bln) | QoQ Change | Number of Deals | QoQ Change |
|---|---|---|---|---|
| 2018 Q3 | 15.6 | 977 | ||
| 2018 Q4 | 14.2 | -9.0% | 554 | -43.3% |
| 2019 Q1 | 7.86 | -44.6% | 464 | -16.2% |
| 2019 Q2 | 8.37 | 6.5% | 501 | 8.0% |
| 2019 Q3 | 9.63 | 15.1% | 498 | -0.6% |
The proportion of the investment and financing in China's internet startups in Q3 2019 that went to early stage ventures dropped slightly, with seed round and Series A investments combined comprising 74.8% of the total, down 0.8 percentage points from Q2 2019 and down 2.6 percentage points from Q3 2018.
Breakdown of China Internet Investment Deals by Round
| Period | Seed | Series A | Series B | Series C | Series D | Series E or Above |
|---|---|---|---|---|---|---|
| 2018 Q3 | 49.4% | 28.0% | 14.2% | 5.0% | 2.3% | 1.2% |
| 2018 Q4 | 51.3% | 27.4% | 12.9% | 5.0% | 1.8% | 1.6% |
| 2019 Q1 | 51.4% | 24.6% | 12.8% | 6.8% | 2.9% | 1.4% |
| 2019 Q2 | 46.6% | 29.0% | 14.4% | 6.7% | 2.3% | 0.9% |
| 2019 Q3 | 47.2% | 27.6% | 15.9% | 7.0% | 1.4% | 0.9% |
The top segments in Q3 2019 by total number of deals were:
| Segment | # of Deals |
|---|---|
| Enterprise Services | 97 |
| Internet Finance | 91 |
| E-commerce | 57 |
| Online Education | 47 |
| Online Medical & Health | 24 |
| Online News/Information | 23 |
| Social Networking | N/A |
| Online Advertising/Marketing | N/A |
| Online Music & Video | N/A |
| Information Security | N/A |
| IT Services | N/A |
| Online Travel | N/A |
| Application Infrastructure | N/A |
| Local Life | N/A |
| Other | N/A |
| Online Gaming | N/A |
| Online Real Estate | N/A |
| Sports, Culture, & Entertainment | N/A |
| Search Engines | N/A |
| Software Tools | N/A |
| E-government | N/A |
Segments that saw a particularly dramatic increase in total investment compared to Q2 2019 included Internet Finance, Online Real Estate, and Online Music & Video, garnering USD 2.28 bln, USD 1.5 bln, and USD 870 mln, respectively, in Q3 2019.
Keywords: funding Q3 2019 investment Internet MIIT CAICT national statistics
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