Asian firms lead as Vc-backed deals scale fresh peak in Jul-sep quarter
Asian companies enjoyed the spotlight again in the third quarter of 2017 with more than half of the top 10 deals in July-september coming from the region.
According to the latest Preqin report, venture capital (Vc)-backed deals reported a second consecutive record-breaking quarter with 2,362 deals worth a combined $49 billion.
These were led by Singapore-based Uber rival Grab’s $2 billion fundraising from Japan’s Softbank Group Corp. and China’s top ride-hailing firm Didi Chuxing. Another prominent deal was the General Atlantic’s $2 billion investment in Sequoia Capitalbacked Chinese news aggregator Toutiao in August.
Chinese firms Go-ready and Cainiao Network were also in the list along with Indian and Indonesian e-commerce giants Flipkart and Tokopedia.
Among investors, Asia’s Softbank proved to be most aggressive by participating in half of the top 10 deals in the quarter. Chinese internet giant Alibaba was also prominent on the list with 2 billion dollar-plus deals to its name. In the April-june quarter too, among the largest 10 venture capital deals, eight were struck in Asia.
While these figures are likely to rise by around 5% as more information becomes available, they have already crossed the previous record of $48 billion in venture capitalbacked deals recorded in the preceding quarter. This has put total deal activity in the first three quarters of 2017 at $128 billion, on course to becoming an all-time annual high.
“2017 now seems assured to set new records for venture capital-backed deal activity, as the industry has witnessed its second consecutive record-breaking quarter. Driven by the rising number of late-stage multi-billion dollar financings—eight in Q3 alone—the industry is setting new records with increasing regularity. Increased opportunities in emerging markets and increased appetite from investors are combining to propel the venture capital industry to new heights,” said Felice Egidio, head of venture capital products at Preqin.
The investments are however now more selective as indicated by the declining number of transactions, with this reported quarter representing the sixth consecutive quarterly decline. In the first nine months of the 10 largest VC deals* announced globally in Q3 2017 Portfolio company Grab Holdings Toutiao Wework Companies Inc Ready-go Flipkart PT Tokopedia Roivant Sciences Gmbh Fanatics, Inc. Cainiao Network Wework Companies in Q3 2017 (by region) Other Israel India Greater China Europe Month July August August July Investment stage Unspecified round Unspecified round Unspecified round Series B/round 2 year, 7,552 venture capital-backed deals were announced, compared to 8,792 in the equivalent period of last year, showed the Preqin report.
“The bulk of deal activity remains focused on the earlier part of the funding cycle, with angel and Series A investments accounting for almost half of total deal numbers. However, deal values are increasingly being driven by large late-stage financings and debt issuances. In fact, while the average value of financings up to Series C have all fallen in 2017, average Series D deals are at a record high, while the average venture debt issuance is more than twice as large as it was in 2015,” added Egidio.
While venture capital investment activity touched record levels, exits continued to decline. The largest venture capital-backed exit announced in Q3 2017 was the $1.4 billion sale of China-based Mango TV to Happigo. The top 10 exits were dominated by Us-based transactions barring Flipkart’s stake sale in India and Chinese firm Best Logistics Technology (China) Ltd’s IPO. German firm Delivery Hero AG’S stake sale was also among the top 10 exits in the quarter.