Venture Capital Activity in the Telecoms & Telecom Media Industry – August 2015

by Emily Forbes

  • 04 Aug 2015
  • PE
  • VC

Preqin’s Venture Deals Analyst shows that 2014 recorded the highest number and aggregate value of venture capital financings in the telecoms and telecom media industry* since 2007. In 2014, 1,054 such deals were recorded with an aggregate value of $12bn, compared to 985 deals in 2013, with an aggregate value of $3.9bn. This shows an increase of 218% in aggregate deal value from 2013 to 2014, the largest percentage increase recorded since 2007. Since 2007, there have been a total of 4,923 venture capital financings in the telecoms and telecom media industry, with an aggregate value of $40bn.

For each year from 2007 to 2014 the majority of telecoms and telecom media deals occurred in North America. However, for 2015 YTD, North America accounted for only 40% of all financings in the sector, a decrease of 10 percentage points from the same period last year. Looking at the raw numbers, there was a global total of 190 deals recorded in H1 2015, a 29% decline from the 268 recorded in H1 2014. Interestingly though, there was a significant increase in deal flow in Greater China in H1 2015 (107 deals) compared to the same time period in 2014 (72 deals): an increase of 49%. India has also seen a large increase in deal activity in the telecoms and telecom media industry compared to last year. There were 44 deals in the country in H1 2015 compared to just 15 in H1 2014.

The aggregate value of telecoms and telecom media investments in North America as a proportion of global total value has decreased over the last few years, accounting for 68%, 56% and 40% in 2013, 2014 and 2015 YTD respectively. In contrast, such investments in Greater China accounted for 14%, 29% and 52% of the global total over the same time period.

Angel/seed deals have been the most common type of funding round in the telecoms and telecom media industry since 2009, with 1,733 deals recorded since 2007 and an aggregate value of $1.3bn. However, in 2014 angel/seed was the only financing stage to decrease in number in comparison to 2013. From 2007 to 2015 YTD, series D and later financings represent the largest proportion of aggregate deal value, accounting for 17% of the total. 

Since 2011, telecoms and telecom media has been the third most prevalent industry in terms of number of deals occurring globally, surpassed only by the internet and software sectors. For 2015 YTD, the industry accounts for 14% of aggregate deal value, the second highest amount, and places above software (13%) in terms of aggregate deal value for the first time since 2007. In terms of both the number of deals and aggregate deal value, the telecoms and telecom media industry has seen year-on-year growth since 2009. Despite a 13% decrease in terms of the number of deals in H1 2015 compared to H1 2014, the aggregate value of deals in the first half of this year was the highest semi-annual aggregate value on record, indicating that the telecoms market looks set to continue to flourish.

*Telecoms & Telecom Media Industries: Fiber Optics, Integrated Telecoms Services, Mobile Applications, Mobile Messaging, Telecoms Equipment, Telecoms Services, Telecoms Towers & Infrastructure, Wire-line Telecoms Services & Equipment, Wireless Telecoms Services & Equipment, & Telecom Media

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