PricewaterhouseCoopers Zhong Tian LLP MoneyTree TM China TMT Report Q3/Q4 24 Data source: Zero2IPO Research Technology Institute This MoneyTree TM China Telecommunications, Media and Technology (TMT) Report includes information on private equity and venture capital (PE/VC) investment in the TMT industry for Q3/Q4 24, as well as 22 and 23. www.pwccn.com www.pwc.com/globalmoneytree
Table of contents. Overview 3 2. PE/VC investments in the TMT industry 4 TMT industry investments compared to all industries 4 Investments by quarter 6 Investments by sector 7 First-time funding compared with follow-on funding Investments by stage of development 2 Investments by region 5 3. PE/VC exits in the TMT industry 6 Exits by quarter 6 Exits by type 7 Exits by sector 9 4. Sector focus: Technology, Internet, and Telecommunications and Mobile Investments in Technology 2 Investments in Internet 26 Investments in Telecommunications and Mobile 32 5. A close look at investments in Mobile 36 6. Methodology and definitions 39 7. Contacts 4 2
. Overview The exponential growth of the Telecommmunications, Media and Technology (TMT) industry in China reached a new level in 24. Driven by a combination of factors such as new technologies, new applications and emerging market demand, a growing number of start-ups captured the public s attention with their highly innovative products and services, demonstrating enormous growth potential and profitability. In the first half of 24, overall private equity and venture capital (PE/VC) investment soared from its early lows, and an investment spurt occurred in the second half of the year with the introduction of entrepreneurship and innovation incentive policies by the government. Total investment in 24 doubled that of 23, and the aggregate investment increased 35% year on year (YOY). In particular, TMT far outshone all other industries. In the first half of 24 alone, investments in TMT companies exceeded the full-year total of 23. With a further 8% pickup in investment growth in the second half of the year (relative to the first half), total deal value in full-year 24 hit US$5.9 billion, with total investment growing 8% from the US$7.3 billion in 23; the total number of investments in 24 increased to,24, a growth of 47% compared to 23. In 24, both the investment amount and volume in TMT companies have broken previous records since 22 when we started to track investment trends. As the Chinese economy entered the New Normal growth mode, the Internet + theory gradually took hold in various traditional industries, where the Internet, instead of merely playing a supplementary role, started to play a dominant role and contribute greater economic benefits resulting in new industries. Boasting unlimited possibilities, Internet + brought about the rise of increasingly more start-ups as well as attracting capital from institutional investors. In the second half of 24 the number of investments in the TMT industry hit its highest point since we started to track investment trends in 22. There were 5 TMT deals with a deal size of over US$ million, with the biggest single deal recorded at US$. billion. These enterprises attracted generous investments due to their steady growth and expansion. TMT investment in 24 was characterized by increased merger and acquisition (M&A) activity. More and more TMT investors chose M&A as the preferred exit strategy, resulting in the number of M&As in Q4 outstripping IPOs. IPO in the US is no longer a mainstream exit strategy. IPO on a US stock exchange typically entails high cost and low valuation in contrast to the high valuation TMT companies receive on the China Capital Market. The introduction of a Registration Based System will motivate more and more companies to choose to list as an A-share or on the New Third Market (an OTC market for growth enterprises) in China. TMT is long past the stage of low technical maturity, low recognition and high risks. Today, the TMT industry is governed by well-defined government regulations, and its products and services have become increasingly innovative and unique. Highly lucrative as it is, the TMT market involves inherent risks. Therefore, systematic and rational analysis of development trends and investment value is crucial to effective and responsible investment decisionmaking. This report endeavors to provide a clear understanding of PE/VC investment and exit strategy in the TMT industry as a whole and the Technology, Internet and Telecommunications and Mobile segments individually, as well as the future trends of the market. If you would like to discuss your thoughts and ideas about this report, please contact us. We are looking forward to hearing from you! Marcel Fenez Global Leader Entertainment and Media PwC China TMT Leader Jianbin Gao PwC China Technology Industry Leader 4 MoneyTree TM China TMT Report Q3/Q4 24
2. PE/VC investments in the TMT industry TMT industry investments compared with all industries The overall industry investments in the second half of 24 dropped significantly compared to the big leap seen in the first half of 24, but remained on an upward trend, compared to the previous two years. Total TMT deal volume accounted for 65% of overall industry investments. In Q3, the deal volume of overall PE/ VC and TMT industry investments both reached historical highs since 22, but single-deal value decreased a lot. In the first half of 24, overall PE/VC investments started at a low level. but then surged ahead, leading to a big leap. In Q2 24, the deal value of PE/ VC investments reached US$7,62 million, while the deal volume reached 42, a historical high since 22 when we started to track the investment trend. The deal volume in the TMT industry accounted for 52% of the total of all industries in Q2, and that increased to 67% in Q3. However, the proportion of deal value dropped significantly from 3% in Q2 to 22% in Q3, further evidence of the low average single deal value and high deal volume in the TMT industry. The single deal value and deal volume dropped in Q4, but the overall trend is still optimistic. In Q4 24, PE/VC investment volume decreased 4% and the deal value saw a 3% downturn QoQ. Although the deal volume in Q4 was also % lower than that of Q3, the deal value of TMT industry investments in Q4 had a good performance. In summary, both overall PE/VC investment and TMT industry investment in the second half of 24 was at a high level and continued the strong trend of the first half of 24. PwC Viewpoints Overall investment in Q3 and Q4 24 had the following characteristics:. Total investment fell off from the historical peak in Q2 but remained high, with aggregate investment hitting a new record high since 22 when we started to track investment trends; 2. The Chinese economy geared down to the New Normal growth mode. Investment in the industry saw a growth spurt with the introduction of a series of incentive policies for entrepreneurship and innovation by the government; 3. Booming stock markets and the New Third Market brought about the wealth effect, attracting increasing investment to high-growth enterprises. MoneyTree TM China TMT Report Q3/Q4 24 5
Overall PE/VC investments In Q3 24, China saw a total of 68 PE/VC investments across all industries totaling US$6,84 million. This was an increase of 5% by volume but a decline of 9% by value compared to Q2 24. In Q4 24, there were a total of 593 PE/VC investments, which represented a decrease of 4% compared to Q3 24. The deal value of US$,23 million decreased 3% compared to Q3 24. Figure : Comparison of PE/VC investments and TMT investments 22-24 ( value) US$m 8, 6, 4, 2,, 8, 6, 4, 2, $7,62 $6,84 $,23 $,36 $9,34 $7,53 $7,284 $6,335 $6,675 $5,868 $3,448 $4,24 $5,346 $3,24 $3,449 $3,535 $4,76 $,578 $,98 $2,34 $927 $,28 $,67 $752 Q 2 Q2 2 Q3 2 Q4 2 Q 3 Q2 3 Q3 3 Q4 3 Q 4 Q2 4 Q3 4 Q4 4 PE/VC funding in all industries PE/VC funding in TMT industry PE/VC investments in TMT In Q3 24, there were 4 PE/VC investments in the TMT industry, accounting for 67% of total volume across all industries. The deal value US$3,535 million represented 22% of the total PE/VC deal value in the corresponding period. In Q4 24, the number of TMT investments reached 37, accounting for 63% of total PE/VC volume. Meanwhile, deal value was US$4,76 million, comprising 42% of the total PE/VC deal size. Figure 2 : Comparison of PE/VC investments and TMT investments 22-24 ( volume) 6 5 4 3 2 454 244 487 243 496 255 34 92 257 57 259 9 Q 2 Q2 2 Q3 2 Q4 2 Q 3 Q2 3 Q3 3 Q4 3 Q 4 Q2 4 Q3 4 Q4 4 PE/VC deal volume in all industries 476 23 463 269 336 245 42 24 68 4 PE/VC deal volume in TMT industry 593 37 6 MoneyTree TM China TMT Report Q3/Q4 24
Investments by quarter In the third quarter of 24, there were 4 deals in the TMT sector, a rise of 92% over Q2 24. The deal value amounted to US$3,535 million, a decrease of 34% compared to Q2 24. In the fourth quarter of 24, there were 37 deals, a drop of % compared to Q3 24. The rise in value was even more significant, with investment totaling US$4,76 million, up 33% compared to Q3 24. In Q3, the deal volume reached the highest figure since 22. In Q3, TMT industry investments continued the strong trend of the first half of 24. Despite a slight decrease in deal value, the deal volume still reached a new record. In Q3 24, the average single deal size was US$.37 million and decreased 64% comparied to the US$28.9 million average in Q2 24, which was the highest on record since 22 when we started to track investment trends. In Q4, the average single deal size was outstanding. In Q4, the average single deal value was US$5.23 million, an increase of 47% compared from Q3 24. In the period from 22 to 24, Q4 24 took third place and was only a bit lower than the US$5.82 million average in Q3 22, which was second place. In Q4 24, there were eight deals over US$ million, and the largest single deal was US$, million. Figure 3: Investments by quarter 22-24 ( volume/ value) US$m 6, 5, 4, 3, 2,, $3,448 $,98 $3,449 $2,34 244 269 255 243 $,28 23 245 $,67 $752 92 57 9 $,578 $927 $3,535 45 4 $4,76 $5,346 37 35 24 25 5 Q 2Q2 2Q3 2Q4 2Q 3Q2 3Q3 3Q4 3Q 4Q2 4Q3 4Q4 4 value volume PwC Viewpoints Alibaba s successful listing on the NYSE in September 24 reshaped the world s perception of the Chinese IT industry and Internet companies. In Q3 24, the number of investments in the TMT industry hit a new historical high since 22 when we started to track investment trends. The trend continued into Q4, and the largest ever TMT investment (exceeding US$ billion) occurred in December. In Q3, investment was mostly concentrated in e-commerce and video sites, while mobile Internet took over the first place in Q4. MoneyTree TM China TMT Report Q3/Q4 24 7
Investments by sector The TMT industry is divided into the following sectors: Technology, Internet, Telecommunications and Mobile, and Entertainment and Media. Although the average deal size dropped in the second half 24, the deal volume in Q3 reached 94 deals, which created a new historical high since 22 when we started to track investment trends. In Q4, the deal volume and size decreased 7% and 43%, respectively, compared to Q3. The Internet sector has always been the hottest investment area in the TMT industry and was outstandingly successful in 24. There were 9 deals in Q3, a historical high since 22 when we started to track investment trends. The deal value of US$9.37 million was just below the historically highest value of US$22.5 million in Q3 22 (since 22 when we started to track investment trends). In Q4, the deal volume and value declined by % and 9%, respectively, compared to Q3. The Telecommunications and Mobile sector performed well in 24. In Q4, the deal volume was almost same as Q3 and the deal value saw significant growth of 48% over the previous quarter, which represented a new historical high since 22 when we started to track investment trends. In Q4, the deal volume and value of the Entertainment and Media sector declined by 33% and 4% respectively compared to Q3. In Q4 24, among the eight deals over US$ million, the Internet sector and the Telecommunications and Mobile sector each accounted for 5% of the 图 Figure 4: value comparison in TMT sectors 22-24 业投资金额比较 US$m 6, 5, 4, 3, 2,, 图 Figure 5: volume comparison in TMT sectors 22-24 行业投资数量比较 2 8 6 4 2 8 6 4 2 92 95 79 45 28 $927 7 6 7 77 75 66 37 69 67 5 38 48 36 6 25 75 74 57 67 45 22 3 2 94 76 76 Q 2 Q2 2 Q3 2 Q4 2 Q 3 Q2 3 Q3 3 Q4 3 Q 4 Q2 4 Q3 4 Q4 4 Internet $,578 $3,448 PwC Viewpoints $,28 $,67 $752 Telecommunications $,98 $3,449 68 3 Technology $2,34 Q 2 Q2 2 Q3 2 Q4 2 Q 3 Q2 3 Q3 3 Q4 3 Q 4 Q2 4 Q3 4 Q4 4 Entertainment and Media Telecommunications Internet Technology 48 9 $5,346 87 75 4 9 7 2 3 94 2 5 $3,535 78 Entertainment and Media The Internet remained the absolute mainstream business in terms of deal volume, but Mobile Internet is already on a par with it for deal size. In particular, Mobile Internet businesses occupied the dominant position in Q4 24. Compared to where it was in the first half of 24, investment in the Technology industry has dropped to a relatively low level, and the Entertainment and Media industry still remained largely ignored. $4,76 8 MoneyTree TM China TMT Report Q3/Q4 24
Q3 24 Total deal volume for the TMT industry reached 4 deals, with a total value of US$3,535 million. volume by sectors: Internet: 9 deals, 46% of the Telecommunications and Mobile: 2 deals, 27% of the Technology: 94 deals, 23% of the Entertainment and Media: 5 deals, 4% of the Figure 6: volume in TMT sectors Q3 4 94 23% 9 46% 5 4% 2 27% Internet Telecommunications and Mobile Technology Entertainment and Media value by sectors: Internet: US$,937 million, 55% of the Technology: US$, million, 28% of the Telecommunications and Mobile: US$482 million, 4% of the Entertainment and Media: US$5 million, 3% of the Figure 7: value in TMT sectors Q3 4 (US$m) $,937 55% $5 3% $482 4% $, 28% Internet Telecommunications and Mobile Technology Entertainment and Media QoQ comparison between Q3 24 and Q2 24 volume value Technology 技 35% 64% Internet 联网 8% 22% Telecommunications and Mobile Entertainment and Media 及传媒 49% 联网 44% 联网 25% 4% MoneyTree TM China TMT Report Q3/Q4 24 9
Q4 24 Total deal volume for the TMT industry reached 37 deals, with a total value of US$4,76 million. volume by sector: Internet: 7 deals, 46% of the Telecommunications and Mobile: 3 deals, 3% of the Technology: 78 deals, 2% of the Entertainment and Media: deals, 3% of the value by sector: Telecommunications and Mobile: US$2,499 million, 53% of the Internet: US$,565 million, 33% of the Technology: US$574 million, 2% of the Entertainment and Media: US$68 million, 2% of the Figure 8: volume in TMT sectors Q4 4 Figure 9: value in TMT sectors Q4 4 (US$m) 7 46% $2,499 53% 78 2% 3% 3 3% $574 2% $68 2% $,565 33% Internet Telecommunications and Mobile Technology Entertainment and Media Internet Telecommunications and Mobile Technology Entertainment and Media QoQ comparison between Q4 24 and Q3 24 volume value Technology 技 43% 7% Internet 联网 9% % Telecommunications 48% 联网 % 联网 Entertainment and Media 及传媒 4% 33% MoneyTree TM China TMT Report Q3/Q4 24
First-time funding compared with followon funding Q3 24 There were 96 TMT enterprises engaged in first-round funding, making up 67% of the total number of deals, up 22% compared to Q2 24. The total investment figure for firstround funding reached US$97 million, representing 26% of the total deal value, 4% higher than Q2 24. Figure : TMT follow-on compared with initial investments 22-24 % 9% 8% 7% 6% 5% 4% 3% 2% % % 65% 5% 53% 67% 67% 6% 65% 63% 53% 55% 44% 45% Q 2 Q2 2 Q3 2 Q4 2 Q 3 Q2 3 Q3 3 Q4 3 Q 4 Q2 4 Q3 4 Q4 4 Initial investments Follow-on investments Q4 24 In this quarter, 54 TMT enterprises successfully received first-round funding, accounting for 63% of the total deal volume. The percentage was only four points lower than the previous quarter. The total investment figure for first-round funding was US$869 million, representing 9% of the total deal value, down 7% from the previous quarter. MoneyTree TM China TMT Report Q3/Q4 24
Q3 24 Enterprises engaged in first-round funding by sector: Internet: 85 enterprises, funding total of US$49 million. Technology: 53 enterprises, funding total of US$32 million. Telecommunications and Mobile: 48 enterprises, funding total of US$6 million. Entertainment and Media: enterprises, funding total of US$7 million. For first-round funding, 25 enterprises were at the early stage, accounting for 64%; 6 were at expansion stage, accounting for 3% and were at late stage, accounting for 5%. PwC Viewpoints Q4 24 53 48 85 Enterprises engaged in first-round funding by sector: Internet: 75 enterprises, funding total of US$46 million. Telecommunications and Mobile: 36 enterprises, funding total of US$49 million. Technology: 35 enterprises, funding total of US$2 million. Entertainment and Media: 8 enterprises, funding total of US$48 million. For first-round funding, 9 enterprises were at the early stage, accounting for 59%; 5 were at the expansion stage, accounting for 32% and were at late stage, accounting for 7% (3 enterprises, accounting for 2%, did not disclose their investment stage). 75 Q3 24 First-time funding summary (US$) 35 36 8 Number of enterprises <= m 47 m-5m 69 >5m-m 25 >m 22 By comparing the first-round TMT investments and subsequent investments, we find:. In Q3 24, the number of first-round investments increased 62% than Q3 23, despite a 24% drop in investment value; in Q4, however, the number of first-round investments declined 2%, and investment value also dropped 4% QoQ. In the second half of 24 overall, first-round investments accounted for over 6% of the total, indicating investors bias towards early-stage projects. 2. Of the companies receiving first-round investments, Internet enterprises remained the most popular options among investors, ranking first in terms of both volume and value and well ahead of the other three segments. 3. During the past three years (except the first half of 24), TMT companies receiving first-round investments outnumbered those in later investment stages, which is clear evidence of the rapid replacement rate in the TMT industry. N/A 33 Q4 24 First-time funding summary (US$) Number of enterprises <= m 29 m-5m 5 >5m-m 32 >m 2 N/A 23 2 MoneyTree TM China TMT Report Q3/Q4 24
Investments by stage of development Figure : TMT investments by stage of development 22-24 ( value) US$m 6, 5, 4, 3, 2,, $927 $,577 Q 2 Q2 2 Q3 2 Q4 2 Q 3 Q2 3 Q3 3 Q4 3 Q 4 Q2 4 Q3 4 Q4 4 PIPE $3,448 $,28 $,64 $752 Late stage The late stage was less attractive to investors. Enterprises at the late stage might be expected to be the most popular since they are closest to an exit. However, deal volume at this stage has always been lower than that at the expansion stage. Because of limited deal volume, deal value was even smaller than that of the early stage. Thanks to clear business models, investors have a better idea of the prospects for TMT companies at this stage, so their investment decisions are more considered. PIPE investment amount significantly decreased in Q3 and Q4 after the unprecedented growth in Q2 24. In Q2 24, the deal value of PIPE investments reached US$2,92 million, but the total in Q3 and Q4 was only US$7 million. The deal value was even less than a quarter of that in Q2. Overall, the deal volume of PIPE investments was low and fell further in the second half of 24. $,9 Expansion stage $3,449 $2,34 $5,346 Early stage $3,535 $4,76 Figure 2: TMT investments by stage of development 22-24 ( volume) 3 25 2 5 5 266 259 45 3 3 6 9 6 98 5 95 97 32 8 7 64 68 75 93 53 56 56 88 4 56 3 29 26 2 22 23 22 2 5 2 6 7 4 3 8 3 8 6 6 5 Q 2 Q2 2 Q3 2 Q4 2 Q 3 Q2 3 Q3 3 Q4 3 Q 4 Q2 4 Q3 4 Q4 4 Early stage Expansion stage The deal volume and value for early-stage investments reached a historical high level since 22. In the four stages of investment, the deal volume for early-stage investments took the lead as usual, accounting for 65% and 7%, respectively, of the total in Q3 and Q4 24. Meanwhile, the total deal value was rising and saw a significant growth compared to previous years. In Q4 24, early-stage investments reached US$2,32 million, accounting for 49% of the total, a historic high since 22 when we started to track investment trends. The expansion stage reached historic levels since 22 in Q3 and Q4 24. The expansion stage is also an attractive stage for investors. In Q3 and Q4, the deal volume and value of expansion-stage investments were second to early-stage investments. Q3 and Q4 expansion-stage deal values were US$2,8 million and US$2,45 million, respectively, a record since 22 when we started to track investment trends. Late stage PIPE MoneyTree TM China TMT Report Q3/Q4 24 3
Q3 24 Q3 23 saw a total volume of 4 deals in the TMT industry, with a total deal value of US$3,535 million. volume by stage of development Early stage: 266 deals, 65% of the Expansion stage: 6 deals, 28% of the Late stage: 2 deals, 5% of the PIPE: 6 deals, % of the Undisclosed: 3 deals, % of the total Figure 3: volume in TMT industry by stage of development Q3 4 2 5% 266 65% 3 % 6 % 6 28% QoQ comparison between Q3 24 and Q2 24 volume value Early stage 2% 25% Expansion stage 7% 64% Late stage 33% 22% PIPE 4% 8% Early stage Expansion stage Late stage PIPE Undisclosed value by stage of development Expansion stage: US$2,8 million,59% of the Early stage: US$686 million, 9% of the PIPE: US$583 million, 6% of the Late stage: US$84 million, 5% of the Undisclosed: US$ million, % of the Figure 4: value in TMT industry by stage of development Q3 4 (US$m) $583 6% $2,8 59% $ % $84 5% Early stage Expansion stage Late stage PIPE Undisclosed $686 9% 4 MoneyTree TM China TMT Report Q3/Q4 24
Q4 24 There was a total volume of 37 deals in the TMT industry, with a total deal value of US$4,76 million. The highest single deal value was US$, million in the expansion stage. (Three deals did not disclose their investment stage.) volume by stage of development Early stage: 259 deals, 7% of the Expansion stage: 88 deals, 24% of the Late stage: 6 deals, 4% of the PIPE: 5 deals, % of the Undisclosed: 3 deals, % of the value by stage of development Early stage: US$2,32 million, 49% of the Expansion stage: US$2,45 million, 46% of the PIPE: US$8 million, 2% of the Late stage: US$6 million, 2% of the Undisclosed: US$6 million, % of the Figure 5: volume in TMT industry by stage of development Q4 4 Figure 6: value in TMT industry by stage of development Q4 4 (US$m) 6 4% 259 7% 3 % 5 % 88 24% Early stage Expansion stage Late stage PIPE Undisclosed $2,32 49% $6 % $6 2% $2,45 $8 46% 2% Early stage Expansion stage Late stage PIPE Undisclosed QoQ comparison between Q4 24 and Q3 24 volume volume Early stage 期 3% 238% Expansion stage 张期 24% 64% Late stage 期 2% 37% PIPE 7% 8% MoneyTree TM China TMT Report Q3/Q4 24 5
Investments by region In Q3 and Q4 24, 482 deals gave details on the regions where investments took place. The top five investment regions in China in the TMT industry were, by deal volume, Beijing with 249 (accounting for 52% of the total deal volume), Shanghai with a modest 87, Shenzhen with 48, Zhejiang Province, with 22 and Guangdong Province (except Shenzhen) with 8. The total deal volume of the top five regions was 42, accounting for 88% of the Total deal value of investments which disclosed their region was US$6,963 million. From the perspective of deal value, the top four rankings had no change. Jiangsu Province surpassed Guangdong Province (except Shenzhen) and ranked fifth. The top five regions had an aggregated deal value of US$6,58 million, accounting for 95% of the total deal size. Beijing took the top spot with an impressive sum of US$5,33 million, followed by Shanghai which was US$42 million. Shenzhen was third, with US$2 million less than Shanghai. The combined total of the remaining two regions, Jiangsu and Zhejiang Province, was US$448 million. Figure 7: The top five regions for TMT investments in Q3/Q4 24 ( volume/ value) US$m volume, 2, 3, 4, 5, 6, Beijing 249 $5,33 Shanghai 87 $42 Shenzhen 48 $4 Zhejiang Province Jiangsu Province 22 5 $29 $57 Guangdong Province 8 $ PwC Viewpoints Beijing has established itself as the heartland of China s TMT industry, generating half of the total volume of TMT investment and claiming 6% of the national aggregate investment. The city boasts advantages in human resources, funding and policy for start-ups in the TMT industry. A virtuous cycle has taken shape. Its leading position will not be in danger from any other Chinese city in the foreseeable future. In 24, Guangdong Province and Jiangsu Province almost tied for the fifth place. Jiangsu Province had a higher investment size compared to Guangdong Province, but Jiangsu Province fell behind slightly in terms of number of investments. 6 MoneyTree TM China TMT Report Q3/Q4 24
3. PE/VC exits in the TMT industry Exits by quarter In 24 TMT exit volume hit a record high since 22. In Q3 24, there were only 6 exits. One quarter later, the number rose to 8. There were 73 exits in 24, 63 exits in 22 and only 43 exits in 23. In general, the total amount of exits in 24 was the highest in the past three years. Figure 8: Exit volume in the TMT industry 22-24 6 5 4 3 8 2 7 2 2 3 6 6 23 6 8 Q 2 Q2 2 Q3 2 Q4 2 Q 3 Q2 3 Q3 3 Q4 3 Q 4 Q2 4 Q3 4 Q4 4 PwC Viewpoints A-share IPOs resumed in January 24. In the first half of the year, 2 Chinese TMT companies launched IPOs. In Q3 24, IPOs accounted for 5% of TMT investor exits; the figure dropped to 39% in Q4. With the dropping percentage among exits, IPO is no longer the most favorable choice for TMT enterprises. Furthermore, secondary offerings between PE funds turned out to be weaker than expected. By contrast, M&As replaced IPOs as the most popular exit channel and accounted for 6% of the M&A deals proliferated among TMT businesses. This is attributable to the extremely lengthy IPO process as well as the influence of behind-the-scene investors. However, given the high valuations on the New Third Board and A shares, we expect more TMT companies will choose A-share or New Third Market IPOs as their exit channel in the future. MoneyTree TM China TMT Report Q3/Q4 24 7
Exits by type At the beginning of 24, due to the restart of the A-share market in China and the confidence rebuilt in the American capital market, IPOs rose dramatically to 63% of all exits, a new high since the second half of 22. However, from the beginning of the second half of 24, driven by capital and the consideration of enhancing competitiveness, a large wave of M&A began. M&A accounted for 6% of total exits in Q4 24, overtaking the volume of IPOs. Management buy-out and secondary sale represented a small percentage, around %, of the total exits. There was only one buy-out and one secondary sale in Q3 and none in Q4. Figure 9: TMT exit trends by type 22-24 25 2 5 5 6 2 3 4 7 2 2 3 7 2 2 3 3 Q 2 Q2 2 Q3 2 Q4 2 Q 3 Q2 3 Q3 3 Q4 3 Q 4 Q2 4 Q3 4 Q4 4 2 2 5 6 7 2 2 8 8 4 8 6 7 IPO Strategic sale Management buy-out Secondary sale 8 MoneyTree TM China TMT Report Q3/Q4 24
It was not a peak time for Chinese TMT companies to list on the US exchanges. IPOs in mainland China are still attractive to local TMT companies. Since 22 when we started to track investment trends, there s been a trend of local TMT enterprises listing in the US. The main reasons were simpler procedures, higher liquidity levels, and no rigorous restriction to profitability. Thus, US-listed local TMT enterprises reach a record high number in Q2 24 since 22. However, the Internet subsector as the representative of new technology and business models, profoundly changed the traditional industry of China and China s capital market began to give higher valuations to the TMT industry and thus encouraged more and more enterprises to list in mainland China. Therefore, China capital markets became more attractive to investors. In Q3 24, 5% of TMT companies listed domestically and the remaining half listed in either Hong Kong or the US. In Q4 24, only 4% of listings were on NASDAQ and NYSE, while 29% listed in Hong Kong and 57% listed in mainland China. The US markets are not necessarily the first choice. When the situation for domestic stock market is favorable, TMT companies prefer to list in mainland China. Most TMT companies chose to list on the ChiNext Board in Shenzhen or the Shanghai Stock Exchange. Figure 2: Comparison of TMT exits in mainland China, Hong Kong and US capital markets 22-24 88% 84% Q 2 Q2 2 Q3 2 Q4 2 Q 3 Q2 3 2% 8% % % % % 57% 9% 64% 5% 64% 57% Q3 3 5% Q4 3 Q 4 Q2 4 Q3 4 Q4 4 43% % 9% 27% 25% 25% 4% 9% 29% 27% Mainland China Hong Kong US One IPO occurred on the Frankfurt Stock Exchange, accounting for 8% of the total in in Q2'2. In Q3 24, there were 6 exits in IPO: 8 exits, 5% of Strategic sale: 6 exits, 38% of the Management buy-out: exit, 6% of the Secondary sale: exit, 6% of the In Q4 24, there were 8 exits in Strategic sale: exits, 6% of the IPO: 7 exits, 39% of Figure 2: Exit types in the TMT industry Q3 4 8 5% 6% 6% 6 38% IPO Strategic sale Management buy-out Secondary sale Figure 22: Exit types in the TMT industry Q4 4 6% 7 39% Strategic sale IPO MoneyTree TM China TMT Report Q3/Q4 24 9
Exits by sector Q3 24 Technology: exits, 68% of the Internet: 3 exits, 9% of the Telecommunications and Mobile: 2 exits, 3% of the Entertainment and Media: No exits in Q3 24. Q4 24 Technology: 7 exits, 39% of the Internet: 5 exits, 28% of the Telecommunications and Mobile: 4 exits, 22% of the Entertainment and Media: 2 exits, % of the The Internet sector saw more investments, but exits steadily declined in Q3 24. The Internet as an active TMT industry sector was booming in both Q3 and Q4. The deal volume and deal value of the Internet sector ranked highest among the four sectors. After the peak in Q2, stable fluctuations were seen in Q3 and Q4. In Q4 24, M&A overtook IPO as the main means of exiting for many reasons. M&A allowed the Internet sector to obtain core technologies, to greatly expand its users, to promote industrial diversification and to achieve new profit growth. In addition, M&A also could help enterprises to realize the integration of online and traditional industries. It was a pathway to embedding Internet into traditional industries. With the ongoing development of China s Internet companies, we expect that M&A activity will remain high. Figure 23: IPO exits in the TMT industry 22-24 4 2 8 6 4 2 3 3 2 9 9 7 7 6 5 5 5 5 4 4 4 4 3 3 2 2 2 3 2 3 2 2 2 2 Q 2 Q2 2 Q3 2 Q4 2 Q 3 Q2 3 Q3 3 Q4 3 Q 4 Q2 4 Q3 4 Q4 4 Technology Internet Telecommunications and Mobile Entertainment and Media 2 MoneyTree TM China TMT Report Q3/Q4 24
4. Sector focus: Technology, Internet, and Telecommunications and Mobile Investments in Technology Figure 24: value in the Technology sector 22-24 US$m 3, $2,83 The Technology sector includes IT Services, Hardware, Software, Electronics & Optoelectronics Devices and Semiconductors. The deal value of Technology sector investments rapidly increased in Q3, hitting a historical high since 22. In Q2, the deal value saw a significant increase. The main reason was that a listed Electronics & Optoelectronics Devices supplier obtained a PIPE investment worth US$,8 million and a listed Semiconductor producer acquired a PIPE investment of nearly US$7 million, both of which increased the overall deal value. In Q3, there were no large single deals, so total deal value sharply dropped. However, the deal volume in Q3 still rose and hit a historical high since 22 when we started to track investment trends. In the second half of 24, investment in the Hardware subsector reached record high since 2,5 2,,5, 5 $239 $383 Figure 25: volume in the Technology sector 22-24 35 3 25 2 5 5 $5 $485 3 28 27 26 23 23 26 24 2 9 23 8 22 7 2 6 6 6 5 5 5 2 3 3 3 5 3 8 9 3 6 7 7 7 5 5 3 3 5 4 3 3 3 3 5 2 2 2 2 2 Q 2 Q2 2 Q3 2 Q4 2 Q 3 Q2 3 Q3 3 Q4 3 Q 4 Q2 4 Q3 4 Q4 4 Electronics & Optoelectronics Devices Software IT Services Hardware Semiconductor $28 $23 Q 2 Q2 2 Q3 2 Q4 2 Q 3 Q2 3 Q3 3 Q4 3 Q 4 Q2 4 Q3 4 Q4 4 Hardware IT Services Electronics & Optoelectronics Devices Semiconductor Software 22 due to several large individual deals which drove the total higher. Prior to the second half of 24, deal volume for the Hardware subsector was typically in the single digits. In Q3, there were 5 deals in the Hardware subsector, a historical high volume since we began tracking investment trends in 22. In addition, the Hardware subsector surpassed the Semiconductor subsector for the first time, moving up from its bottom position. $84 $,568 $28 $, $574 The Semiconductor subsector performed well, seeing the highest value. The Semiconductor subsector performed very well in Q4. It was the best performance up to now excluding a huge PIPE investment in Q4 22. There were only two deals in Q4, but the average deal size was US$34 million. It was on the top of the list of the five subsectors in the Technology sector. Investments in the IT Services and Software subsectors were positive and reached new historical records. The IT Services and Software subsectors were a focal point for technology investments in the second half of the year. Except for 3 deals in Q 22, in the second half of 24 the deal volume reached a new historical record since 22 when we started to track investment trends, while deal value was just second to the historical highest point since 22. Investment in the IT Services and Software subsectors grew rapidly in Q3 and Q4 24 (excluding three huge PIPE investments in Q4 23). MoneyTree TM China TMT Report Q3/Q4 24 2
volume and value Q3 24 There were 94 deals in the Technology sector, with a total value of US$, million. IT Services: 27 deals, 29% of the total; deal value of US$9 million, 9% of the Software: 26 deals, 28% of the total; deal value of US$586 million, 59% of the Electronics & Optoelectronics Devices: 2 deals, 22% of the total; deal value of US$89 million, 9% of the Hardware: 5 deals, 6% of the total, deal value of US$ 23 million, 2% of the Semiconductor: 5 deals, 5% of the total; deal value of US$3 million, % of the Figure 26: volume by Technology subsector Q3 4 5 6% 27 29% 5 5% 2 22% IT Services 26 28% Software Electronics & Optoelectronics Devices Hardware Semiconductor Figure 27: value by Technology subsector Q3 4 (US$m) $586 59% $3 % $89 9% Software $23 2% $9 9% IT Services Electronics & Optoelectronics Devices Hardware Semiconductor QoQ comparison between Q3 24 and Q2 24 Electronics & Optoelectronics Devices volume value 62% 9% Software 73% 544% IT Services 286% 35% Semiconductor 体 5% 98% Hardware 4% 475% 22 MoneyTree TM China TMT Report Q3/Q4 24
volume and value Q4 24 There were 78 deals in the Technology sector, with a total value of US$574 million. Software: 26 deals, 33% of the total; deal value of US$95 million, 34% of the IT Services: 23 deals, 29% of the total; deal value of US$54 million, 27% of the Electronics & Optoelectronics Devices: 6 deals, 2% of the total; deal value of US$8 million, 8% of the Hardware: deals, 4% of the total, deal value of US$ 49 million, 9% of the Semiconductor: 2 deals, 3% of the total; deal value of US$68 million, 2% of the Figure 28: volume by Technology subsector Q4 4 4% 6 2% 26 33% 2 3% 23 29% Software IT Services Electronics & Optoelectronics Devices Hardware Semiconductor Figure 29: value by Technology subsector Q4 4 (US$m) $95 34% $49 9% $68 2% $8 8% $54 27% Software IT Services Electronics & Optoelectronics Devices Semiconductor Hardware QoQ comparison between Q4 24 and Q3 24 Electronics & Optoelectronics Devices 及光电设备 volume value 24% 43% Software 67% IT Services 服务 5% 9% Semiconductor 导体 6% 423% Hardware 27% 3% MoneyTree TM China TMT Report Q3/Q4 24 23
Investments by stage of development The attraction of early-stage investments continued to rise. From the beginning of Q2 24, the deal volume at the early stage preceded other investment stages. The deal value for the early stage in Q4 24 rose 26% QoQ and reached its highest level on record since 22 when we started to track investment trends. There was one deal in Hardware and one in Software. The deal values were US$35 million and US$5 million, respectively, ranking in the top three deals for the Technology sector. Expansion and late stages were still popular for investment. The deal volume at the expansion and late stages continued to rise in the second half of 24. In terms of deal value, the total at the expansion stage increased and the late stage remained stable in the second half of 24. In Q4, the highest single deal was in the expansion stage in the Semiconductor subsector, at about US$56.99 million. Figure 3: value by stage of development in the Technology sector 22-24 US$m 3,5 3, 2,5 2,,5, 5 $34 $382 $526 $485 $25 $848 $,583 $23 $28 $2,83 $, $57 Q 2 Q2 2 Q3 2 Q4 2 Q 3 Q2 3 Q3 3 Q4 3 Q 4 Q2 4 Q3 4 Q4 4 PIPE Late stage Expansion stage Early stage Figure 3: volume by stage of development in the Technology sector 22-24 4 35 3 25 2 5 5 33 27 27 38 2 9 2 2 24 2 7 8 6 5 3 6 7 4 2 3 8 8 8 6 4 8 2 2 2 2 5 5 3 4 5 Q 2 Q2 2 Q3 2 Q4 2 Q 3 Q2 3 Q3 3 Q4 3 Q 4 Q2 4 Q3 4 Q4 4 Expansion stage Early stage Late stage PIPE 3 26 4 37 36 3 PIPE investments cooled PIPE investments bottomed out from Q4 23 and remained low through Q2 24. However, a PIPE investment of about US$57 million in the Application Software subsector in Q3 was the highest deal in the quarter. Q4, however, was much lower, with PIPE deal value dropping 94% QoQ. 24 MoneyTree TM China TMT Report Q3/Q4 24
Investments by stage of development Q3 24 Early stage: 4 deals, 43% of the total; deal value of US$58 million, 6% of the Expansion stage: 37 deals, 39% of the total; deal value of US$286 million, 29% of the Late stage: deals, % of the total; deal value of US$84 million, 8% of the PIPE: 5 deals, 5% of the total; deal value of US$573 million, 57% of the Undisclosed: 2 deals, 2% of the Figure 32: volume by stage of development in the Technology sector Q3 4 % 4 43% 2 2% 5 5% Expansion stage Late stage Undisclosed 37 39% Early stage PIPE Figure 33: value by stage of development in the Technology sector Q3 4 (US$m) $84 8% PIPE $58 6% Late stage $573 57% $286 29% Expansion stage Early stage Q4 24 Early stage: 36 deals, 46% of the total; deal value of US$29 million, 36% of the Expansion stage: 3 deals, 4% of the total; deal value of US$254 million, 44% of the Late stage: 8 deals, % of the total; deal value of US$7 million, 2% of the PIPE: 2 deals, 3% of the total; deal value of US$37 million, 7% of the Undisclosed: deal, % of the total; value of US$3 million, % of the Figure 34: volume by stage of development in the Technology sector Q4 4 8 % 36 46% % 2 3% 3 4% Early stage Late stage Undisclosed Expansion stage PIPE Figure 35: value by stage of development in the Technology sector Q4 4 (US$m) $37 7% $7 2% $254 44% $3 % Expansion stage Late stage Undisclosed $29 36% Early stage PIPE QoQ comparison between Q3 24 and Q2 24 volume value Early stage % 48% Expansion stage 期 27% 33% Late stage 5% 2% PIPE 7% 78% QoQ comparison between Q4 24 and Q3 24 volume value Early stage % 26% Expansion stage 期 6% % Late stage 2% 5% PIPE 6% 94% MoneyTree TM China TMT Report Q3/Q4 24 25
Investments by region During the second half of 24, the top three regions with the highest deal volume and greatest deal value in the Technology sector were, in descending order, Beijing, Shanghai, and Shenzhen. Beijing took the top spot, with 6 deals totaling US$34 million. Shanghai had nine deals, totaling US$58 million. Shenzhen had eight deals totaling US$67 million. Beijing leading other regions. Beijing s deal volume and value equaled the sum of the other two regions. Investment in Beijing focused on the Software and IT Services subsector, which accounted for 99.8% of the Total deal value of Shanghai increased due to a high value PIPE investment. Shanghai ranked third in Q4 24. The main reason was that one Electronics & Optoelectronics Devices subsector company received an investment of US$34.3 million in Q4 24, which lifted the overall deal value. Figure 36: The top three regions for Technology investments Q3/Q4 4 ( volume/ value) volume US$m 5 5 2 Beijing Shanghai 6 $34 9 $58 Shenzhen 8 $67 26 MoneyTree TM China TMT Report Q3/Q4 24
Investments in Internet Figure 37: value in the Internet sector 22-24 US$m 2,5 2,,5, 5 $325 $526 $2,23 $85 $888 $38 The Internet sector includes E-commerce, Online Education, Internet Services, Online Entertainment, Social Media, Internet Marketing and Internet Finance. $54 Q 2 Q2 2 Q3 2 Q4 2 Q 3 Q2 3 Q3 3 Q4 3 Q 4 Q2 4 Q3 4 Q4 4 Internet Finance Internet Marketing Social Media Online Entertainment Internet Services Online Education E-commerce $65 $,468 $,587 $,937 $,565 The E-commerce subsector took the lead in terms of deal value in 24, surpassing the total deal value for 22 and 23. Among the Internet sector, investors pursued opportunities in the E-commerce subsector with great passion. In Q3 24, there were 8 deals representing a historical high since 22 when we started to track investment trends. In terms of deal value, it reached US$2.2 million in the second half of 24, surpassing the total for 22 and 23. There were nine deals in the Internet sector exceeding US$ million, six in the E-commerce subsector. The biggest deal size was US$35 million. In Q3, deal value in Internet Marketing was over US$3 million, which created a new record. Internet Marketing mainly consisted of consulting firms, advertising agencies and organizations of network marketing services. There were 9 deals in Internet Marketing in Q3 and total deal value was US$347 million. value for the Internet Services, Online Education and Social Media subsectors reached a new high since 22 when we started to track investment trends, while the average single deal size still remained low. The deal volume in Internet Services increased significantly in the second half of the year compared to last year. In Q4 Internet Services hit a record high since 22 when we started to track investment trends, with US$248 million in investments, 47% going to the Online Travel Services subsector. However as a whole, the average single deal size was still low, with the biggest one US$5 million. In Q4 Online Education hit a historical high of US$7 million in deal value since 22 when we started to track investment trends. The main reason Figure 38: volume in the Internet Sector 22-24 7 8 6 5 4 3 2 6 55 49 47 48 39 36 3 29 3 26 27 29 24 23 23 2 2 7 4 6 7 7 6 6 8 8 9 32 4 2 8 7 8 33 4 5 6 4 6 4 6 8 4 67 53 4 5 6 6 3 4 2 3 7 9 7 7 4 3 4 3 Q 2 Q2 2 Q3 2 Q4 2 Q 3 Q2 3 Q3 3 Q4 3 Q 4 Q2 4 Q3 4 Q4 4 E-commerce Social Media Online Education Internet Marketing for this was that one well-known Online Education website secured a single investment of US$55 million. In Q3 Social Media hit a new historical record of US$22 million in deal value and also hit a historical high in deal volume in Q4. Yet the average single deal value was low. The main reason for this was the high degree of monopoly in Social Media. The market Internet Services Internet Finance 8 Online Entertainment is comprised of several large, wellknown social websites, thus the popularity gained and the numbers of users registered were limited. Even if a company received investment, the deal value was relatively low, only between tens of thousands and millions of dollars. MoneyTree TM China TMT Report Q3/Q4 24 27
volume and value Q3 24 There were 9 deals in the Internet sector, with a total value of US$,937 million. E-commerce: 8 deals, 42% of the total; deal value of US$943 million, 49% of the Internet Services: 55 deals, 29% of the total; deal value of US$224 million, 2% of the Internet Marketing: 9 deals, % of the total; deal value of US$347 million, 7% of the Online Education: 8 deals, 9% of the total; deal value of US$ million, 6% of the Online Entertainment: deals, 6% of the total; deal value of US$ million, 6% of the Social Media: 7 deals, 4% of the total; deal value of US$22 million, % of the Internet Finance: No deals in Q3 24. Figure 39: volume by Internet subsector Q3 4 8 9% 8 42% 7 4% 6% 9 % E-commerce Internet Marketing 55 29% Online Entertainment Internet Services Online Education Social Media Figure 4: value by Internet subsector Q3 4 (US$m) $943 49% $ 6% $ 6% $22 % $224 2% $347 7% E-commerce Internet Services Online Education Internet Marketing Social Media Online Entertainment QoQ comparison between Q3 24 and Q2 24 volume value E-commerce 5% 6% Online Education 35% 33% Internet Services 224% 76% Online Entertainment 22% 4% Social Media % 46% Internet Marketing 9% 277% Internet Finance 络融 % % 28 MoneyTree TM China TMT Report Q3/Q4 24
volume and value Q4 24 There were 7 deals in the Internet sector, with a total value of US$,565 million. E-commerce: 6 deals, 36% of the total; deal value of US$,78 million, 69% of the Internet Services: 48 deals, 28% of the total; deal value of US$248 million, 6% of the Internet Marketing: 7 deals, % of the total; deal value of US$57 million, 4% of the Online Entertainment: 6 deals, 4% of the total; deal value of US$27 million, % of the Social Media: 4 deals, 8% of the total; deal value of US$33 million, 2% of the Online Education: 2 deals, 2% of the total; deal value of US$7 million, 7% of the Internet Finance: 3 deals, 2% of the total; deal value of US$5 million, % of the Figure 4: volume by Internet subsector Q4 4 4 8% 7 % 6 36% 3 2% 6 4% 2 2% E-commerce Online Education Social Media Internet Finance Figure 42: value by Internet subsector Q4 4 (US$m) $,78 69% $5 % $27 % $7 7% $33 2% $57 4% $248 6% E-commerce Online Education Social Media Internet Finance 48 28% Internet Services Internet Marketing Online Entertainment Internet Services Internet Marketing Online Entertainment QoQ comparison between Q4 24 and Q3 24 volume value E-commerce 24% 4% Online Education 7% 6% Internet Services 3% % Online Entertainment 45% 76% Social Media % 84% Internet Marketing % 84% Internet Finance 络融 3% 5% MoneyTree TM China TMT Report Q3/Q4 24 29
Investments by stage of development Early-stage investment ranked first, with sharply rising deal values. In terms of deal volume, Internet investments accounted for 67% of the total in Q3 and 75% of the total in Q4. It was the leading sector due to the strong demand for funding from early-stage enterprises. value in the early-stage companies grew by leaps and bounds in the second half of 24. The figure rose 42% in Q3 and 38% in Q4 QoQ. There were three E-commerce investments over US$ million, breaking the traditional barrier of low average deal values in this stage. Figure 43: value by stage of development in the Internet sector 22-24 US$m 2,5 2,,5, 5 $325 $526 $2,5 $89 $888 Q 2 Q2 2 Q3 2 Q4 2 Q 3 Q2 3 Q3 3 Q4 3 Q 4 Q2 4 Q3 4 Q4 4 PIPE Late stage Expansion stage Early stage value at the expansion stage accounted for 76% of the total and hit a historical high (since 22) with US$,4 million. In Q3, expansion-stage investments rose significantly in terms of both deal value and volume. There were five deals exceeding US$ million. Three of them were in E-commerce sector worth US$46 million and two were in Internet Marketing and Social Media sectors with US$2 million and US$89 million, respectively. $38 $5 $679 $,937 $,468 $,587 $,563 Figure 44: volume by stage of development in the Internet sector 22-24 4 2 28 27 8 6 4 2 43 4 64 49 5 48 52 42 35 37 38 37 3 37 36 25 38 39 8 6 3 7 27 7 9 5 9 9 5 5 4 6 2 3 5 2 2 Q 2 Q2 2 Q3 2 Q4 2 Q 3 Q2 3 Q3 3 Q4 3 Q 4 Q2 4 Q3 4 Q4 4 Early stage Expansion stage Late stage PIPE 3 MoneyTree TM China TMT Report Q3/Q4 24
Q3 24 There were 9 deals in the Internet sector, with a total value of US$,937 million. Early stage: 28 deals, 67% of the total; deal value of US$366 million, 8% of the Expansion stage: 52 deals, 27% of the total; deal value of US$,463 million, 76% of the Late stage: 9 deals, 5% of the total; deal value of US$98 million, 5% of the PIPE: deal, % of the total; deal value of US$ million, % of the Figure 45: volume by stage of development in the Internet sector Q3 4 28 67% % 9 5% Early stage Late stage 52 27% Expansion stage PIPE Figure 46: value by stage of development in the Internet sector Q3 4 (US$m) $,463 76% $ % $98 5% $366 8% Q4 24 There were 7 deals in total in the Internet sector, with a total value of US$,565 million. (There was one deal of US$2 million that did not reveal its investment stage.) Early stage: 27 deals, 75% of the total; deal value of US$87 million, 56% of the Expansion stage: 37 deals, 22% of the total; deal value of US$63 million, 4% of the Figure 47: value by stage of development in the Internet sector Q4 4 (US$m) 27 75% 2 % 3 2% 37 22% Early stage Late stage Figure 48: value by stage of development in the Internet sector Q4 4 (US$m) $87 56% Expansion stage PIPE Late stage: 3 deals, 2% of the total; deal value of US$.5 million, % of the Early stage Late stage Expansion stage PIPE $6 4% PIPE: 2 deals, % of the total; deal value of US$6 million, 4% of the $63 4% Early stage PIPE Expansion stage QoQ comparison between Q3 24 and Q2 24 volume value Early stage 67% 42% Expansion stage 73% 42% Late stage 5% 36% PIPE 5% 93% QoQ comparison between Q4 24 and Q3 24 volume value Early stage % 38% Expansion stage 29% 57% Late stage 67% % PIPE % 5% MoneyTree TM China TMT Report Q3/Q4 24 3
Investments by region During Q3 and Q4 24, the top three regions in the Internet sector were, in descending order, Beijing, 58 deals with a deal value of US$953 million; Shanghai, 9 deals with a total investment sum of US$79 million; Shenzhen, seven deals with a total investment sum of US$2 million; and Guangdong, also with seven deals with a total investment sum of US$4 million. Shenzhen and Guangdong tied for third by deal volume. Figure 49: The top three regions for Internet sector investments in Q3/Q4 4 ( volume/ value) volume Beijing Shanghai Shenzhen Guangdong Province 2 4 6 8, 58 $953 9 $79 7 $2 7 $4 US$m 32 MoneyTree TM China TMT Report Q3/Q4 24