China VC investment hit record high of USD 70.5 billion in 2018, KPMG analysis finds

Artificial intelligence, healthcare, life sciences and education will continue to attract investments in Asia

China, 30 January 2019 – Venture capital (VC) investment in China reached a record high of USD 70.5 billion in 2018, an increase of 52.9 percent from USD 46.1 billion in 2017, finds Venture Pulse, KPMG’s quarterly analysis of VC trends.

China’s robust performance was largely due to the USD14 billion raised by Ant Financial in Q2 2018 and a number of significant deals throughout the year, overall deal volumes in 2018 remain relatively stable at 813, comparing to 799 a year earlier. In comparison, deal volumes in Asia and globally both decreased by around 10 percent, while deal value increased by more than 40 percent to a record USD 93.5 billion and USD 254.7 billion, respectively.

Egidio Zarrella, Partner and Head of Clients and Innovation, KPMG China, says: “There’s no end in sight for massive deals in Asia. That is because of the significant size and scale of this market. While these deals are big compared to those done elsewhere, they are increasingly typical of companies looking to dominate the regional market.”

While China dominated VC investment in Asia during 2018, Q4 2018 highlighted the growing maturity of startups across Asia and the widespread VC activity in the region as a whole, according to KPMG’s analysis. Three out of the four billion-dollar deals in Q4 were conducted outside China, including Singapore’s ride-hailing platform Grab (USD 2.8 billion), Indonesia’s e-commerce company Tokopedia (USD1.1 billion) and food ordering and delivery company Swiggy in India (USD 1 billion). India-based food search and delivery company Zomato raised USD 360 million and food delivery app operator Woowa Brothers in Seoul raised USD 320 million. These giant deals reflect a widespread trend toward late-stage deals in Asia, with investors making bets on a smaller number of bigger deals in the region.

In terms of sector, investment in artificial intelligence (AI) and machine learning grew significantly in 2018 in Asia, with VC investors drawn by a variety of solutions applicable across multiple industries. Facial recognition was a particularly hot technology of interest, in addition to motion detection and natural language processing.

Philip Ng, Partner and Head of Technology, KPMG China, adds: “In China, corporate VC is growing rapidly. More companies have VC arms and they are actively looking for disruptive technologies that can enhance their core business. AI for manufacturing defects detection, IoT sensors to monitor environmental factors, robots for customer interaction – corporate investors are interested in anything that will enhance the user experience or help them innovate on products and services.”

As for 2019, the total level of investment will be tough to match that in 2018 given the extraordinarily strong performance, including the two largest VC deals in history.

However, the momentum of VC investment is expected to continue globally, particularly in late-stage deals. This will result in an increased average deal size while deal volume either remains steady or drops further. In Asia, industries such as healthcare, life sciences and education, as well as AI and other highly innovative technologies with broad applicability are expected to continue to attract significant funding.

SHARE THIS STORY

Share on facebook
Share on twitter
Share on linkedin
Share on email

RELATED POSTS

5 Companies That Have Already Announced Job Cuts This Year

Layoffs in 2023: 5 Companies That Have Already Announced Job Cuts This Year

The layoff spree at tech giants is bleeding into a new year. It has been just three weeks since we entered 2023, yet the media is buzzing with disturbing numbers about people being laid off by tech companies: At least 104 tech companies let go more than 26,000 employees. This means, more than 1,600 tech employees were dismissed per day in the past couple of weeks. Let’s take a look at the top tech companies that are laying off aggressively.

Goblin Mode

Decoding the World’s Obsession with “Goblin Mode”

Do you find yourself struggling to maintain a positive and productive attitude at work? Are you becoming increasingly irritable or disengaged from constantly feeling overwhelmed and stressed? If so, you’re not alone. Many people experience this state of mind, and some turn on their ‌ “goblin mode” to cope with it. The term “goblin mode” gained popularity in February 2022

Instagram vs YouTube—Which Is Better for Your Business?

Instagram vs YouTubeWhich Is Better for Your Business?

With the rise of social media platforms, like Instagram, TikTok and YouTube, businesses have gained new opportunities to reach their potential customers. It’s important to note that Instagram and YouTube are not just for entertainment; they can be used as powerful tools for marketing and creating brand awareness. Many individuals already use YouTube, TikTok and more to earn money.

What Is Ambient Computing? How Does It Affect Our Lives?

What Is Ambient Computing? How Does It Affect Our Lives?

Picture this: it’s five degrees Celsius outside, and you are freezing, but instead of you adjusting your thermostat, your house automatically realizes that it needs to be warmed up and changes the temperature accordingly. That is what ambient computing is all about. Ambient computing (also called ambient intelligence) refers to technology immersed into your environment. You don’t have to consciously interact with it using screens or keyboards.

How Can AI Be Used in Governance?

How Can AI Be Used in Governance?

One of the many things that artificial intelligence (AI) is capable of doing is helping governments function smoothly. In a previous article, we discussed that, over time, AI would be responsible for more decision-making. As such, it can help governments worldwide make tough decisions by ridding the decision-making process of human biases.

Top 3 Cheapest Tesla Alternatives to Consider Buying

Top 3 Cheapest Tesla Alternatives to Consider Buying

Those who care about the environment have progressively shifted to electric cars. In December 2022, electric car sales reached 11% of the car market worldwide. These cars not only have significantly fewer carbon emissions but are also cheaper to maintain. Some countries, such as New Zealand, the U.K.