Record-High Venture Capital Deal Activity in Emerging Markets – September 2015

by Emily Forbes

  • 23 Sep 2015
  • PE
  • VC

According to Preqin’s Venture Deals Analyst online service, there have been 11,205 venture capital deals in emerging markets* completed historically, with an aggregate value of $118bn. This has increased year-on-year since 2009, rising from 662 deals with an aggregate value of $4.1bn to 1,891 deals in 2014 with an aggregate value of $24bn. 2015 looks set to continue this trend; 1,203 deals have already completed in H1 2015, compared with 874 at the same point in time last year.

**Figures exclude add-ons, grants, mergers, venture debt & secondary stock purchases.

In 2015 YTD, the internet industry has dominated emerging markets, contributing 43% of the number and 52% of the aggregate value of all venture capital deals. In comparison, so far in 2015 the telecoms industry, as the second most prominent industry, has represented just 22% and 25% of the number of deals and aggregate value of all venture capital deals in the region respectively. Since 2007, the number of deals in emerging markets has continually been dominated by the internet industry; however, it has only been the highest in terms of aggregate value since 2010, with telecoms taking first place in 2007 and industrials in 2009. The telecoms industry has consistently ranked second in terms of both number of deals and aggregate value across emerging markets since 2011.

As expected, angel/seed deals have been the most abundant deal type in terms of number of deals since 2012, representing 22% in 2012 and rising to 30% of all deals in emerging markets in 2015 YTD. However, before that, series A deals were the most common; series B deals represented 11-17% of all deals each year from 2007 to 2011, whereas series A deals represented 17-23% of all deals in the same time period. Since 2013, series D rounds have recorded the highest aggregate deal value compared with other institutional funding rounds, with 46 such deals occurring so far this year with an aggregate value of $7.3bn (already higher than the $6.7bn recorded last year), and an average deal value of $163mn.

China continues to be the biggest player in the emerging markets, having dominated in terms of number of deals occurring and having received the majority of the aggregate value of deals since 2007. India has continually been the second most prominent country in the economic region in terms of both number of deals and aggregate value, again since 2007, followed by Israel in third.

*Emerging markets comprise the following countries: Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Israel, Malaysia, Mexico, Morocco, Myanmar, Pakistan, Peru, Philippines, Poland, Romania, Russia, South Africa, South Korea, Taiwan, Thailand, Turkey and the United Arab Emirates.

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