Zero2IPO Database showed 36 investment deals completed in China’s VC/PE market in May 2012. Among the 24 investment deals with amount disclosed, 17 recorded an amount of less than US$ 20.00M, accounting for 70.83% of the total number of deals with amount disclosed and 40.58% of the total disclosed amount. Additionally, most exits adopted IPO as their exit option in May, as evidenced by the fact that only one deal out of the 18 exit deals exited in the form of M&A. These IPO deals brought an average book ROI of merely 2.95 times, suggesting a modest institutional profit and an imperative trend to broaden exit channels.
Totally 36 Investment Deals Take Place in May with US$ 390.85M Involved
According to the statistics of Zero2IPO Database, a total of 36 investment deals took place in China’s VC/PE market in May 2012, and 24 of them disclosed the investment amount of US$ 390.85M in total or US$ 16.29M on average. In May, totally 14 grade-1 industries won favor of VC/PE firms. In particular, Internet industry came out top with eight investment deals, taking up 22.2% of the total number of investment deals. It’s worth mentioning that five of the eight investment deals flew to online game companies in Internet service field. Telecom & value-added services and chain retail ranked second and third with five and four investment deals, occupying 13.9% and 11.1% of the total number of investment deals respectively.
Among the 24 investment deals with amount disclosed, chain retail industry took the first place with US$ 96.62M, accounting for 24.7% of the total investment amount; Internet industry came second with US$ 71.87M, taking up 18.4% of the total investment amount; clean-tech industry ranked the third with US$ 69.93M, occupying 17.9%. On May 31, 2012, Fidelity Ventures led other four investment institutions, namely Legend Capital, KTB, Morgan Creek Capital and Jianxin Capital to make a joint investment of US$ 50.00M in Pod Inns, recording the highest investment amount disclosed in May.
In May, the total investment amount was relatively low, with an average investment amount of US$ 16.29M. By the average investment amount, top three industries were chain retail, clean-tech and telecom & value-added services, all of which showed an average figure above US$ 20.00M with small differences among them. Bio/Healthcare industry that was a hot investment target in the past only accounted for 0.5% of the total investment amount, indicating less attention to it.
Small-scale Investments Become Popular in Mature Capital Market
In May, investment scales had little change compared with Q1’12. The frequent large-scale investments in April did not continue this month. Specifically, only one investment deal recorded an investment scale of more than US$ 50.00M, accounting for 4.2% of the total number of investment deals with amount disclosed; five recorded an investment scale between US$ 30.00M and US$ 50.00M, taking up 20.8% of the total number of investment deals with amount disclosed, and involving around US$ 158.58M; and just one deal recorded an investment scale between US$ 20.00M and US$ 30.00M, occupying 4.2% of the total number of investment deals with amount disclosed. There were eight deals with the investment scale of less than US$ 10.00M, involving US$ 25.80M in total.
In terms of geographical distribution, most of investment deals were centralized in relatively mature capital markets in May, with 36 investment deals scattered in ten provinces and cities such as Beijing, Zhejiang and Shenzhen. Of them, Beijing witnessed 13 investment deals, that is the largest number of investment deals, accounting form 36.1% of the total number of investment deals; it was followed by Zhejiang and Shenzhen, each recording five investment deals, taking up 13.9% of the total number of investment deals; Guangdong (excluding Shenzhen), Jiangsu and Shanghai saw three investment deals, occupying 8.3% of the total number of investment deals respectively.
On the basis of the statistical data, Beijing attracted US$ 150.15M, that is the largest investment amount in May, accounting for 38.4% of the total investment amount; it was closely followed by Zhejiang with US$ 110.26M, taking up 28.2% of the total investment amount; Guangdong (excluding Shenzhen) and Jiangsu took the third and the fourth place, with the investment amount of US$ 37.70M and US$ 31.59M, respectively.
19 VC/PE Exits Complete in May; ROI Consistently Drops
Zero2IPO Database showed a total of 19 exit deals in May 2012. Among them, 18 were IPO exit deals, involving nine enterprises that financed US$ 1.02B in total and US$ 113.00M on average. They also involved 16 VC/PE investment institutions, with an average book ROI of 2.95 times, and ten of these IPO exits recorded a book ROI of less than two times, demonstrating a moderate institutional profit.
Most exits in May took place in Shanghai Stock Exchange and ChiNext, with nine and eight exit deals, taking up 50.0% and 44.4% of the total respectively. Specifically, China Rail Transit was listed on HKGEM and financed US$ 26.00M, making it the only Chinese enterprise realizing overseas IPO in May. On May 21, Jiangsu Sunrain Solar Energy Co., Ltd. succeeded in going public on Shanghai Stock Exchange and financed RMB2.15B, recording the largest financing amount in IPO in May. On May 17, Publicis Group declared to officially acquire Longtuo Interactive, a digital marketing company based in Beijing. According to Zero2IPO Database, Longtuo Interactive had got two investments from Gobi Partners in 2006 and 2007.