According to Preqin’s Venture Deals Analyst on Private Equity Online, there have been 10,872 venture capital deals in Asia since 2009, valued at an aggregate $123bn. The internet industry has been the most prominent sector in the region in recent years, accounting for a third of the number (3,689) and 48% ($62bn) of the total value of Asian venture capital deals in the period.
As seen in the chart above, the annual number of venture capital deals in the internet industry in Asia has seen year-on-year growth over the last seven years. In particular, deal activity increased by 68% and 61% from 2013 to 2014 and 2014 to 2015 respectively, while aggregate deal value rose by 225% and 118% in the same periods. Furthermore, the relative importance of the industry to the Asian venture capital landscape increased; the 76 deals completed in 2009 represented only 14% of Asian venture capital deal flow, while the 1,327 transactions in 2015, a record high, represented 41% of total Asian venture capital deal activity.
It is unsurprising that the two largest economies in Asia account for the greatest proportion of venture capital invested in the internet sector within the region. In 2015, investments in China- and India-based internet companies represented over four-fifths (53% and 28% respectively) of the total number of Asian venture capital deals in the sector. In terms of aggregate value, Chinese and Indian transactions made up 72% and 21% respectively of the overall Asian deal volume in the internet sector last year.
Globally, internet deals in Greater China were second only to North America-based companies in terms of activity; deals in North America represented 31% of the global number, while Greater China-based transactions accounted for 28%. However, in terms of aggregate value, internet financings in Greater China represented 44% of the global total compared with 28% in North America.
China’s dominance of the internet venture capital industry has continued into 2016, largely due to the $3.3bn round received by Meituan-Dianping in January – the largest venture capital financing globally since 2009 and valuing the company at $18bn. The investors in this round include DST Global, Trustbridge Partners, CPPIB, Baillie Gifford, Sequoia Capital, Hillhouse Capital Management, China Development Bank Capital, Capital Today, Temasek Holdings and Tencent.