Q3 2020 Investment in Chinese Internet Startups Down 9% QoQ
CAICT, 10/16/20
As China's domestic economy maintained its gradual recovery, capital markets for Chinese internet startups also remained relatively stable in Q3 2020, with the total amount of investment and financing disclosed for the quarter coming to USD 6.22 bln, down 8.9% QoQ and 39.0% YoY, according to Chinese government data. 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), also reported that the total number of funding and financing deals for Chinese internet startups during the quarter came to 467, up 8.4% QoQ but down 19.1% YoY.
Investment & Financing of Internet Startups in China
| Period | Investment Total (USD Bln) | QoQ Change | Number of Deals | QoQ Change |
|---|---|---|---|---|
| 2019 Q3 | 10.20 | N/A | 577 | N/A |
| 2019 Q4 | 7.18 | -29.6% | 472 | -18.2% |
| 2020 Q1 | 5.19 | -27.7% | 303 | -35.8% |
| 2020 Q2 | 6.83 | 31.6% | 431 | 42.2% |
| 2020 Q3 | 6.22 | -8.9% | 467 | 8.4% |
The proportion of the investment and financing in China's internet startups in Q3 2020 that went to early stage ventures dropped slightly, with seed round and Series A investments combined comprising 71.7% of the total, down 3.3 percentage points from Q2 2020 and 3.6 percentage points from Q3 2019.
Breakdown of China Internet Investment Deals by Round
| Period | Seed | Series A | Series B | Series C | Series D | Series E or Above |
|---|---|---|---|---|---|---|
| 2019 Q3 | 47.1% | 28.2% | 14.8% | 7.3% | 1.7% | 0.9% |
| 2019 Q4 | 37.1% | 36.4% | 17.6% | 5.5% | 3.1% | 0.2% |
| 2020 Q1 | 39.0% | 36.4% | 14.0% | 6.4% | 3.8% | 0.4% |
| 2020 Q2 | 46.6% | 28.4% | 15.2% | 7.1% | 1.4% | 1.4% |
| 2020 Q3 | 40.2% | 31.5% | 13.5% | 9.6% | 3.0% | 2.1% |
The top segments in Q3 2020 by total number of deals were:
| Segment | # of Deals |
|---|---|
| Enterprise Services | 89 |
| E-commerce | 56 |
| Internet Finance | 55 |
| Online Medical & Health | 33 |
| IT Services | 33 |
| Online Education | 30 |
| Information Security | N/A |
| Other | N/A |
| Application Infrastructure | N/A |
| Online Advertising/Marketing | N/A |
| Online Music & Video | N/A |
| Local Life | N/A |
| Online Gaming | N/A |
| Social Networking | N/A |
| Online News/Information | N/A |
| Online Travel & Mobility | N/A |
| Software Tools | N/A |
| Sports, Culture, & Entertainment | N/A |
| Search Engines | N/A |
| E-government | N/A |
| Online Real Estate | N/A |
Four segments that saw particularly strong increases in total investment compared to Q2 2020 were online news/information, online medical and health, local life, and e-commerce.
In Q3 2020, China had 17 internet startup investment and financing deals for which funding exceeded USD 100 mln each, for a combined USD 3.902 bln, comprising 62.7% of total investment and financing for Chinese internet startups during the quarter. Of these 17, the top 3 alone accounted for a combined USD 1.685 bln in funding, or 27.1% of total funding of internet startups in China for the quarter.
Keywords: wireless Q3 2020 VC financial services online healthcare mobile healthcare online video SNS online gaming e-commerce information security Internet funding online advertising online real estate online travel online education e-government online music MIIT IT services local life CAICT enterprise services online search online information service national statistics
Sending
