Investments in telecoms, media and tech remain steady
Private equity and venture capital (PE/VC) investment in telecommunications, media and technology (TMT) over the first half of 2018 saw their value remain steady, despite a reduction in deals from the prior quarter as investors became cautious, according to the MoneyTreeTM Report released today by PwC.
A total of 2,096 PE/VC deals were completed in the TMT sector over the first half of 2018, a decline of 17 percent from the second half of 2017.
The TMT sector continued to play a key role, with investment in the relevant fields accounting for 50 percent of total PE/VC investment over the period, excluding one-off cases.
"As the government has been encouraging innovation and entrepreneurship with a series of supportive industry policies, private equity and venture capital investors boosted investment in opto-electronics, integrated circuit and IC design, and digital content, as well as manga, animation, and game sectors," Gao Jianbin of PwC China commented.
The number of large deals — those involving a single deal value of over US$100 million — reached 56 over the period, remaining almost unchanged from the second half of 2017.
The average value per deal of large-sized deals exceeded US$400 million.
In the first half of 2018, the number of PE/VC deals involving startups accounted for 54 percent of the total for TMT, the highest among all categories.
All four sub-sectors in the TMT industry saw a decline in the number of PE/VC deals amid the weakening overall environment in the first half of 2018.
“Due to tight money supply and lackluster capital market performance, investors became more cautious, and after a frenzied 2017, PE/VC investment activities are reaching a turning point this year, as regulators strengthened supervision over financial markets," he added.
The Internet and mobile Internet sub-sector was still the favorite among investors, attracting 47 percent of total first-round investments. However, total investment value fell 56 percent from the second half of 2017.
Entertainment and media are also losing appeal for investors since hitting a peak in the first half of 2017.
