Venture capital investment in China reached a five-quarter low in Q3, according to the latest report on VC trends jointly issued by KPMG and CBInsights. The total amount invested decreased from US$5.7 billion to US$3.9 billion QoQ, although the total number of deals increased from 79 to 84.
“It’s becoming more of a buyer’s market in China … Investment committees are asking deal teams to put personal funds into projects to ensure they have a real stake in a company’s success”, said Lyndon Fung, Partner, KPMG China.
“Chinese VC investors are focusing on markets outside of China, taking advantage of government incentives. In particular, Chinese companies have recently acquired or invested in technology companies in Israel, Canada and the UK. Israel-based companies have been especially keen to work with tech VC funds in China in order to promote their technologies to the Chinese market for their mutual benefit”, said Irene Chu, Partner and Head of the High Growth Technology and Innovation Group, KPMG China, “in Asia, the next wave of innovation will be about building globally competitive companies.”
“Over the next few quarters, Asia-based VC investment is likely to remain focused on technology enablement – using technology to help improve service or product quality or to make them more accessible for individuals.”
“The healthcare sector is poised to be a big winner in this regard, both in terms of providing accessible primary healthcare and in terms of making processes like booking appointments and writing prescriptions easier for both doctors and patients, according to the report.”
“Investment in entertainment and media technologies is also expected to rise heading into 2017.”