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Alternative Market Briefing

Venture capital market in Asia remained soft in Q4'19: KPMG

Monday, January 20, 2020

Laxman Pai, Opalesque Asia:

The VC market in Asia remained soft in Q4'19. In the last quarter, VC-backed companies in the Asia region raised across 1,021 deals, said a report by KPMG.

Despite two $1 billion deals in the final quarter of the year, the region's total annual VC investment in 2019 was less than the $126 billion seen in 2018.

While there were challenges for Asia's VC market this year, some positive outcomes emerged, including the market self-correcting before it became too big of a bubble.

China's VC investment was relatively steady quarter-over-quarter, led by a Q4'19 $1 billion raised by online housing platform Beike.

Despite this large funding round, China's total VC funding in 2019 remained subdued, far below the level of investment seen in 2018, due in part to the ongoing short-supply of mega-deals, the continued slowdown in China's economy, and the protracted US-China trade tensions that has stretched across much of the year.

After Beike's raise, the largest deals in China during Q4'19 included a $400 million raised by automotive company Xpeng and a $224 million raised by fintech WTOIP international.

With access to capital and the ability to raise new funds shrinking outside of tier one VC firms, the VC investment cycle in China is also lengthening, with deals taking much longer to get done as VC investors conduct more due diligence and fully scrutinize their investments.

In Q4'19, B2B companies were of particular interest ......................

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