The strong momentum of private equity and venture capital (PE/VC) investment in telecommunications, media and technology (TMT) in the first half of 2017 continued in the second half of the year, according to a report released by consulting firm PwC on Tuesday.
The report said consumer upgrading stemming from robust domestic demand remained a hot spot for investment. The main driving forces were new business models such as new-energy vehicles, advanced manufacturing, intelligent production, virtual reality/augmented reality and blockchain.
There were 2,528 PE/VC deals with a total value of $33.958 billion in the second half of 2017, down 3 percent and 12 percent respectively from the first half. Still, it was the second-best half-year performance since 2015.
There were 57 deals valued at more than $100 million. Among them, a State-owned enterprise adhering to mixed-ownership reform raised US$5.888 billion in the fourth quarter, making it the largest single deal in terms of value since 2015.
However, Amanda Zhang, the northern China leader with PwC's China private equity group, warned that investment in TMT featured both zeal and caution in the second half of 2017 as some industries have gradually matured, while at the same time new industries emerged.
She said the total investments in TMT accounted for more than 50 percent of all investments over the period, further consolidating the pivotal position of TMT. The trend was helped by the expansion and growth of unicorn enterprises reaching high-value deals.
Overall, more large deals were made with enterprises in a period of expansion, particularly in internet services and internet finance, she added.
The report said in the second half of 2017, first-round investments in the TMT industry accounted for about one-third of the total numbers, a record low. The value of first-round investments only accounted for 5 percent of the total value. The trend reflected investors' sentiment, which remained cautious, with a "wait and see" attitude, evaluating the prospects of new projects in a rational manner.
