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Asia pushes its way to the forefront of venture capital

Tuesday, January 08, 2019
Opalesque Industry Update - 2018 has marked another record year for venture capital deal making, seeing 14,889 deals worth an aggregate $274bn.

Preqin expects this figure to rise by up to 5% as more information becomes available, but nonetheless 2018's total deal value has surpassed the previous high of $192bn set in 2017.

North America and Greater China - made up of China, Taiwan, Hong Kong and Macau - made up the majority of global activity, accounting for $113bn and $107bn in deal value respectively.

Nine of the ten of the largest deals announced in the year were for Asia-based companies, seven of which were in China. This includes the largest venture capital deal ever announced: the $14bn funding of Ant Financial Services Group in June. Global venture capital exit activity also had a record year, as 1,094 exits were made for a total of $165bn.

Christopher Elvin, Head of Private Equity: "2018 marks another year of record-breaking deal making in the venture capital industry. Asia in particular has seen further growth in venture capital-backed activity, seeing activity on pace with that of North America. Not only were the vast majority of the largest deals announced this year based in Asia, but we also saw the announcement of the largest venture capital deal ever, for Ant Financial Services Group. It looks like China and North America will continue to vie for the position of the foremost venture capital deal market in the coming months."

Key 2018 venture capital-backed deals

In 2018, 14,889 venture capital deals were announced for a record $274bn, marking the fifth consecutive year the industry has seen record-breaking aggregate venture capital-backed deal values.

Greater China accounted for a large bulk of activity, seeing 4,281 deals worth an aggregate $107bn. North America saw another 5,510 deals announced for a total of $113bn.

Nine of the 10 of the largest deals announced in 2018 were for companies based in Asia. Seven of those were based in China, including the largest-ever venture capital deal, the $14bn funding of Ant Financial Services Group.

2018 also saw the largest venture capital deal made in the US ever: JUUL Labs, Inc. was purchased by Altria Group, Inc. for just under $13bn.

Angel/seed deals made up 35% of deals announced in the year, while series A deals accounted for 28% of transactions.

Investments in the internet sector accounted for the largest proportion of deal value (29%), while internet and software made up the largest proportions of deals announced (22% and 23% respectively).

Series C deals saw a spike in average deal value, increasing from $48mn in 2017 to $82mn in 2018.

Venture capital-backed exits also saw a record 2018, as 1,094 exits were made for a total of $165bn.

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