The 2016 Preqin Global Private Equity & Venture Capital Report details the number and aggregate value of venture capital deals by region since 2007. North America remained the single largest region in 2015 with 4,430 deals completed for an aggregate $69bn. However, its dominance has significantly decreased in recent years, with the proportion of global deal flow it accounts for down from 63% in 2012 to 46% in 2015. The proportion of aggregate value attributed to the continent mirrored this trend: North American venture capital financings accounted for 70% of the global total in 2012 and 51% in 2015.
Conversely, Asian deal flow and deal value as a proportion of the global total has increased significantly, rising from 15% and 14% respectively in 2013 to 34% and 37% of the global total in 2015. Venture capital activity in Greater China and India has been the driving force behind this shift. In 2015, Greater China accounted for 18% of deals completed globally and 28% of aggregate deal value, while India accounted for 10% and 7%, respectively.
Preqin’s Private Equity Online contains detailed information on 3,335 Asian venture capital financings that were completed in 2015 for an aggregate $51bn. As seen in the chart above, Greater China has dominated Asian deal flow since 2007, followed by South Asia (30%), ASEAN (9%) and Northeast Asia (9%). The proportion of aggregate deal value accounted for by Greater China stands at 75%, with South Asia contributing 18%, Northeast Asia 5% and ASEAN 2%.
The number of large cap venture capital deals (valued at $100mn or more) completed in Asia has increased year-on-year from nine deals in 2012 to 99 in 2015, with the aggregate value of $100mn+ deals increasing from $3.3bn in 2012 to $30.7bn in 2015. Six of the 10 largest deals globally since 2007 were completed in China, four of which were completed in 2015 and 2016 so far. The $3.3bn financing of China-based Meituan-Dianping in January 2016 was the largest global venture capital deal since 2007, and investors included Baillie Gifford, Capital Today, China Development Bank Capital, CPP Investment Board, DST Global, Hillhouse Capital Management, Sequoia Capital, Temasek Holdings, Tencent and Trustbridge Partners.
2015 was a challenging year for Asia-focused venture capital fundraising relative to 2014. However, with record levels of venture capital dry powder held by venture capital funds focused on investment in Asia – and GPs keen to deploy this capital – 2016 looks set to be yet another strong year for venture capital investment in the region.