Vol. 65 June 30th , 2017

Latest Report

VC/PE Investment Amount Sets Fresh High; NEEQ Financing Shows a

Downtrend in April

By CAO Qijia , Zero2IPO Research Center

On April 25, 2017, the Political Bureau of the CPC Central Committee held a meeting to analyze

current economic situations and economic work, and shifted the focus of macro policy to control and

governance of financial risks. On the basis of the thought of Political Bureau meeting, CBRC, CSRC

and CIRC successively issued a series of policies, which focused on fighting financial arbitrage

behaviors and guiding capital in the investment market into real economy. On the one hand, the

financial market has gradually improved and witnessed an increasingly mature and stable environment

for investment, along with implementation of a series of economic policies; on the other hand, affected

by overseas investment upsurge due to “Internet +” and the “Belt and Road”, investment institutions

have become more professional, with more diverse and rational asset allocation. As VC/PE firms are

facing new changes and opportunities, the VC/PE industry is also greeting new opportunities and

challenges, and value investment becomes the main direction again. In April, the monthly investment

amount hit an all-time high since 2015, and featured highly concentrated geographical distribution, as

evidence by the fact that 70% of funds went to Beijing.

According to PEdata.cn affiliated to Zero2IPO Group, in April 2017, there were altogether 343

investment deals, and 313 of them disclosed the amounts of US$13.40B and averaged US$42.82M.

The number of deals decreased by 12.7% month on month, while the amount increased by 93.3%. On a

year-on-year basis, the deal number and the amount grew by 13.6% and 25.2%, respectively. The

monthly investment amount hit an all-time high since 2015. The largest investment deal was the joint

investment in Didi Chuxing from Bank of Communications, China Merchants Bank, Softbank and

other investors, at US$5.50B. Sequoia China and CCB International’s investment in Toutiao

(US$1.00B), and Baidu Investment, Tencent Investment and JD Finance’s investment in Yiche

(US$1.00B) tied for the second place.

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Figure 1 Chinese VC/PE Investments in May 2016-Apr. 2017

Source: PEdata, May 2017 www.pedata.cn

Large Investments Account for Nearly 90% of Total Amounts

According to PEdata.cn affiliated to Zero2IPO Group, there were altogether 219 small-amount

investments of the size below US$10.00M (as shown in Figure 2, including 184 deals of less than

US$5.00M), taking up 70.0%, and the amounts added up to US$531M or4.0%. 53 deals had the size

between US$10.00M and US$50.00M, accounting for16.9%, and they amounted to US$899M or 6.7%.

41 deals had the size of more thanUS$50.00M, occupying 13.1%, and the amount summed up to

US$11.97B or 89.3%.Compared with the previous month, both of the proportions of small- and

middle-amount deals declined, whereas the proportion of large-amount ones increased to nearly 90%.

Figure 2 Chinese VC/PEInvestments in Apr. 2017 by Size

Source: PEdata, May 2017 www.pedata.cn

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NEEQ-Listed Enterprises Suffer From Declining Financing Capability

Among the investment deals in April, altogether 102 were made through NEEQ, with the accumulative

amount of US$482M and the average amount of US$4.73M. The deal number accounted for 29.7%,

down by 22.1% month on month, while the amount took up 3.6%,down by 39.8% month on month.

Figure 3 Chinese VC/PEInvestments on NEEQ in May 2016-Apr. 2017

Source: PEdata, May 2017 www.pedata.cn

In the month, the investment amount totaled US$13.40B, and averaged US$42.82M. By the investment

round, series F recorded the largest amount, with only one deal but up to US$5.50B. PIPE ranked

second with 26 deals and US$3.57B, averaging US$137.28M. Series A followed behind with 73 deals

and US$1.74B, averaging US$23.86M. Compared with US$42.82M of average VC/PE investment

amount in April, NEEQ private placement recorded only US$4.73M, down by 21.4% month on month.

NEEQ-listed companies suffered from obvious declines in the deal number and amount, which

suggested weaker fundraising capacity.

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Table 1 Chinese VC/PEInvestments in Apr. 2017 by Round

Round No. of Deals

(Total)

% of

Total

No. of Deals

(Disclosed)

Investment Amt.

(US$M)

% of

Total

Average Investment

Amt. (US$M)

Seed 5 1.46% 3 0.87 0.01% 0.29

Angel 53 15.45% 45 36.05 0.27% 0.8

Pre-A 29 8.45% 25 70.62 0.53% 2.82

A 82 23.91% 73 1741.56 12.99% 23.86

B 23 6.71% 17 290.8 2.17% 17.11

C 16 4.66% 15 523.13 3.90% 34.88

D 66 1.75% 6 1187.56 8.86% 197.93

F 1 0.29% 1 5500 41.04% 5500

NEEQ Private

Placement 102 29.74% 102 482.4 3.60% 4.73

PIPE 26 7.58% 26 3569.28 26.63% 137.28

Total 343 100.00% 313 13402.26 100.00% 42.82

Source: PEdata, May 2017 www.pedata.cn

In April, VC/PE investments involved 28 grade 1 industries. By the number of deals, Internet, IT and

finance ranked top three with 59, 53 and 24 deals, accounting for 17.2%,15.5% and 7.0% respectively

and 39.7% accumulatively. In terms of investment amount, Internet, automobiles, and telecom &

value-added services led the ranking with US$6.15B, US$1.72B and US$1.14B, taking up 45.9%,

12.8% and 8.5%respectively and 67.2% accumulatively.

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Table 2 Chinese VC/PEInvestments in Apr. 2017 by Industry

Industry No. of Deals

(Disclosed)

% of

Total

Investment

Amt.

(US$M)

% of

Total

Internet 59 (52) 17.20% 6147.92 45.87%

IT 53 (47) 15.45% 585.85 4.37%

Bio/Healthcare 23 (22) 6.71% 216.55 1.62%

Finance 24 (20) 7.00% 461.66 3.44%

Entertainment & Media 21 (16) 6.12% 193.94 1.45%

Machinery Manufacturing 17 (16) 4.96% 417.53 3.12%

Automobiles 15 (14) 4.37% 1721.34 12.84%

Others 16 (14) 4.66% 74.52 0.56%

Electronic & Opto-electronics Equipment 13 (13) 3.79% 67.29 0.50%

Telecom & Value-added Services 13 (13) 3.79% 1138.99 8.50%

Chain Retail 10 (10) 2.92% 96.77 0.72%

Construction/Engineering 9 (8) 2.62% 766.26 5.72%

Chemical Raw Materials and Processing 8 (8) 2.33% 145.39 1.08%

Education & Training 10 (8) 2.92% 38.53 0.29%

Textile & Clothing 7 (7) 2.04% 136.19 1.02%

Culture/Sports & Entertainment 7 (7) 2.04% 9 0.07%

Energy & Mineral 6 (6) 1.75% 196.79 1.47%

Real Estate 6 (6) 1.75% 252.81 1.89%

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Clean-tech 6 (6) 1.75% 553.17 4.13%

Rental and Commercial Services 5 (5) 1.46% 77.2 0.58%

Food & Drinks 3 (3) 0.87% 0.63 0.00%

Logistics 3 (3) 0.87% 7.55 0.06%

Other Manufacturing 3 (3) 0.87% 3.32 0.02%

Research/Technical Services & Geological Survey 2 (2) 0.58% 8.78 0.07%

Residential and Other Services 1 (1) 0.29% 0.14 0.00%

IC 1 (1) 0.29% 76.87 0.57%

Water Conservancy/Environment & Public Facility Management 1 (1) 0.29% 1.45 0.01%

Broadcasting & Digital TV 1 (1) 0.29% 5.8 0.04%

Total 343 (313) 100.00% 13402.26 100.00%

Source: PEdata, May 2017 www.pedata.cn

The largest deal in April was Didi Chuxing. On April 28, Didi completed the latest round of financing

of US$5.50B and its post-money valuation was up to US$50B. This round of funding mainly came

from four investors, namely, Bank of Communications, China Merchants Bank, Softbank and Silver

Lake Partners. Along with popularization of smart phones, widespread mobile payment and overall

layout of 4G network, Didi rapidly rose, and attracted various capitals. Upon completion of merger

with Kuaidi and Uber China, Didi has become the leader of China’s online car-hailing market. With

respect to globalization, Didi has actively expanded the overseas market, and successively invested in

similar platforms such as Grab in Southeast Asia, Lyft in the U.S., Ola in India and 99 Taxis in Brazil.

In November 2016, it announced to reach a strategic cooperation agreement with Avis Budget Group,

and jointly provided Chinese users with overseas car rental service in nearly175 countries and regions.

After this round of financing, Didi will mainly target driverless vehicles and new energy vehicles.

Didi is followed by Toutiao and Yiche. Toutiao is an interest-based, social mobile information reading

app affiliated to Beijing Bytedance Technology Co., Ltd. The Company obtained US$1B of series D

financing from Sequoia Capital and CCB International, and is currently valued more than US$11B.

Yichmall, as a B2Ccomplete vehicle e-commerce platform and website affiliated to Beijing Yiche

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Information Technology Co., Ltd., secured US$1B of investment from Tencent, Baidu and JD.com,

and is intended to grow into China's largest online automobile financing platform

Figure 4 Chinese VC/PEInvestments in Apr. 2017 by Region

Source: PEdata, May 2017 www.pedata.cn

Beijing Is Far Ahead in Investment Amount

By region, the 343investment deals were distributed in 24 provinces and municipalities, including

Beijing, Shanghai and Guangdong. Specifically, Beijing represented 29.5% of the total deals, followed

by Shanghai with 17.8% and Guangdong with 17.2%; their amounts were US$9.46B, US$479.25M and

US$430.06M, taking up 70.6%, 3.6% and 3.2%,respectively. In this month, due to Didi’s huge

financing, Beijing occupied more than 70% of total investment amount, far ahead of Shanghai and

Guangdong.

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Table 3 Chinese VC/PEInvestments in Apr. 2017 by Region

Region No. of Deals

(Total)

% of

Total

No. of Deals

(Disclosed)

Investment Amt.

(US$M)

% of

Total

Average Investment

Amt. (US$M)

Beijing 101 29.45% 91 9460.07 70.59% 103.96

Shanghai 61 17.78% 53 479.25 3.58% 9.04

Guangdong 59 17.20% 53 430.06 3.21% 8.11

Zhejiang 31 9.04% 30 1480.98 11.05% 49.37

Jiangsu 21 6.12% 20 286.41 2.14% 14.32

Fujian 13 3.79% 13 359.47 2.68% 27.65

Tianjin 7 2.04% 6 138.81 1.04% 23.13

Hebei 7 2.04% 7 123.79 0.92% 17.68

Shandong 7 2.04% 7 30.4 0.23% 4.34

Sichuan 5 1.46% 4 21.4 0.16% 5.35

Shaanxi 4 1.17% 4 50.62 0.38% 12.66

Hunan 4 1.17% 3 15.85 0.12% 5.28

Anhui 3 0.87% 3 46.64 0.35% 15.55

Hubei 3 0.87% 3 175.7 1.31% 58.57

Henan 3 0.87% 3 35.56 0.27% 11.85

Shanxi 3 0.87% 3 187.28 1.40% 62.43

Xinjiang 2 0.58% 2 6.31 0.05% 3.16

Chongqing 2 0.58% 2 8.86 0.0007 4.43

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Hong Kong 2 0.58% 1 6 0.04% 6

Liaoning 1 0.29% 1 1.6 0.01% 1.6

Guizhou 1 0.29% 1 29.18 0.22% 29.18

Hainan 1 0.29% 1 0.72 0.01% 0.72

Heilongjiang 1 0.29% 1 1.45 0.01% 1.45

Jilin 1 0.29% 1 25.86 0.19% 25.86

Total 343 100.00% 313 13402.26 100.00% 42.82

Source: PEdata, May 2017 www.pedata.cn

According to PEdata.cn affiliated to Zero2IPO Group, altogether 146 VC/PE exits were closed in April

2017, with total amount of US$1.88B. Among them, 120 were IPO exits, accounting for 82.2%, and

recorded the exit amount of US$1.04B and the average ROI of 2.90 times. 22 were M&A exits, taking

up 15.1%, and registered the exit amount of US$780.24M and the ROI of 2.26 times. Four were via

trade sale, with the exit amount of US$57.27M. The number of exits increased by 15.9% month on

month, while the amount fell by 15.1%. IPO remained the main exit option, and reported increases in

both the deal number and amount, and the returns also rose slightly.

Table 4 Chinese VC/PE Exits inApr. 2017 by Option

Exit Option No. of Deals % of Total Exit Amt. （US$M） ROI

IPO 120 82.19% 1040.23 2.9

M&A 22 15.07% 780.24 2.26

Trade Sale 4 2.74% 57.27 0.36

Total 146 100.00% 1877.73 1.84

Source: PEdata, May 2017 www.pedata.cn

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BPEA News

The investment promotion work of ‘the two Expo’ started, the sports tourism development

venture capital forum has become a new bright spot

‘The two Expo’means 2017 China Sports Culture Expo and China Sports Tourism Expo, which will

be held in Baotou International Convention and Exhibition Center from September 23rd

to 25th

, hosted

by General Administration of Sport of China and Chinese Olympic Committee. On June 22nd

, 2017, the

investment promotion work of ‘the two Expo’ started.

This year, during the period of ‘The two Expo’, the sports culture development center of General

Administration of Sport of China will join CAPE and BPEA to sponsor the "2017 China Sports

Tourism Development Venture Capital Forum". In this forum, more than 30 well-known investment

institutions will came to the forum scene, and face to face exchange ideas with projects that need equity

financing. The venture capital forum will build domestic sports investment and financing market

exchange platform, strengthening the docking and integration of capital and sports industry.

>Read more

Experts from Beijing Local Taxation Bureau interpret the new policy of income tax for venture

capital institutions

Recently, the Ministry of Finance and State Administration of Taxation issued Finance [2017] No.38,

which is a new income tax preferential policy for venture capital enterprises and angel investment

personals. On June 21st, we invited experts from Beijing Local Taxation Bureau interpreted this new

policy to our members. More than 50 professionals attend this event. At the scene, the experts

explained the preferential tax policy conditions, investment offset tax method, the source of deduction,

deduction points, tax provisions and tax collection regulations. >Read more

More than 20 students graduated from class of No. 13rd of ＂BPEA PE Management Training

Program＂

Last for four days, with total six modules, No.13rd of BPEA PE Management Training Program held as

scheduled on June 13rd to 16th in Beijing. The six modules are law issues with PE/VC fund, tax issues

with PE/VC fund, fund raising, project investment, investment management and project exits

respectively. Professionals from JT&N partners, Tiantai Law firm, Ernst & Whinney, ChinaEquity

Group, Northern light venture capital, Fuqiang capital, Yuanhe Chongyuan capital and Fortune Venture

Capital, shared their practical experience with students who attend this training program. More than 20

students attend the whole program and received a certificate of completion awarded by BPEA.

>Read more

The 5th Zhongguancun Angel Investment Forum and 2016 Zhongguancun Top Ten Investors

http://bpea.net.cn/en/index.php?m=newscon&id=497&aid=18945http://bpea.net.cn/en/index.php?m=newscon&id=497&aid=18946http://bpea.net.cn/en/index.php?m=newscon&id=497&aid=18947

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and Annual People Awards Ceremony Completed Successfully

On June 6th, 2017, the 5th Zhongguancun Angel Investment Forum and 2016 Zhongguancun Top Ten

Investors and Annual People Awards Ceremony were held at the Beijing Tylfull Hotel. The activities

began to plan and prepare since December last year, hosted by Zhongguancun Venture Capital and

Equity Investment Fund Association, Zhongguancun Angel Investment Association and Zhongguancun

High-tech Enterprise Association, co-sponsored by BPEA. More than 400 attendees were attracted to

this meeting. China news agency, bright network, Xinhua, Beijing TV, "People's Daily" and other

media tracked reports the whole process. >Read more

Mr. Qibin: make full use of the capital market to accelerate China’s economic restructuring

On June 7th, 2017, Mr. Qibin, Deputy general manager of China Investment Corporation, gave a

keynote speech about supply side reform and the development of capital market and overseas

investment on the 2017 CEA forum. This forum was organized by BPEA and the Association of State

Owned Companies in Beijing. In the speech, Mr. Qibin shared his views about recent international

trends and domestic economic developments. He thought in China, the current consumption upgrade

leading supply level side, so that economic transformation is imperative. Make full use of capital

market platform, promote mergers and acquisitions activities can help to accelerate China's economic

restructuring process. >Read more

Special Training: International Experience Sharing about Finance support Science and

Technology Innovation

With the support of the Beijing Municipal Bureau of Foreign Experts Affairs, On June 8th

to 9th

, 2017,

a special training with the theme of international experience sharing about finance support science and

technology innovation was held in Beijing. The training was organized by the Beijing Municipal

Bureau of Finance, Beijing Financial Development Promotion Center, Hanqing Advanced Institute of

Economics and Finance of Renmin University of China (referred as Hangqing), sponsored by BPEA.

The training contents included Financing innovation and R&D, asset backed securitization, attracting

more than 100 professionals from different financing institutions. Mr. Stuart McDonald, associate

professor of Hangqing, and Mr. Hu Qiping, Former Standard & Poor’s China president and managing

director, were lecturers of this training, using their rich professional knowledge to bring a

comprehensive, multi-angle professional training. >Read more

2017 Partner Conference of Yangtze River Industrial Fund and 1st Yangtze River Industry

Development Forum held in Wuhan

On May 26th

to 27th

, 2017, with ‘to link capital and industry’ as the theme, 2017 Partner Conference of

Yangtze River Industrial Fund and 1st Yangtze River Industry Development Forum was held in Wuhan.

About 700 guests were present to the event, including leaders of the Hubei provincial government,

well-known economists, Cooperative partner of the Yangtze River Industrial Fund, the heads of major

http://bpea.net.cn/en/index.php?m=newscon&id=497&aid=18948http://bpea.net.cn/en/index.php?m=newscon&id=497&aid=18949http://bpea.net.cn/en/index.php?m=newscon&id=497&aid=18950

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domestic financial institutions and the well-known investors of the equity investment industry, and so

on. Mr. Song Bin, Executive Vice President of CAPE &BPEA, was invited to attend the forum and

expressed his views at the financial industry expert roundtable.

It is learned that the Yangtze River Industrial Fund was established seventeen months ago. Until now,

20 FoFs with total amount of 103 billion RMB were approved by the Fund Management Committee.

>Read more

No. 12th of BPEA NEEQ committee: Medical and health care Project Roadshow

On June 23rd

, 2017, Ms. Dong Mifang, executive director of Yueyin Venture Capital, shared her views

about investment trend in medical and health care projects in the roadshow activity hosted by BPEA

NEEQ committee. This is the twelfth event for BPEA NEEQ committee members. Three projects

which is focused on medical fields were introduced to the present investment professionals.

>Read more

No.66th of BPEA monthly training: risk management of private equity funds

Risk management is paid more and more attention by private equity fund. On June 27th

, 2017, we

invited experts from Zhide law firm, Allianz Property Insurance Company Limited, Willis insurance

brokers and Deloitte to organize No. 66th

of BPEA monthly training, with the theme of risk

management of private equity funds.

At the scene, experts shared their views about what kind of risk that private equity funds would be

confronted with, and what should funds to do to avoid these risks. More than 100 professionals from

different funds attend this event. >Read more

No. 55th

of ＂SmartMatch roadshow＂: special roadshow of environmental projects

On June 28th

, 2017, No. 55th

of SmartMatch roadshow – a special roadshow of environmental projects

was held in Beijing. Two enterprises participated in this roadshow. The first one is Lvyuanguoji

Technology company, which is focused on waste plastics recycling and reusing. The second one is

Saideli company, which is focused on the new materials used in lithium batteries, with the code of

430097 listed on Beijing Equity Trading Center. This two projects attracted 20 investment institutions

attending this event. >Read more

http://bpea.net.cn/en/index.php?m=newscon&id=497&aid=18951http://bpea.net.cn/en/index.php?m=newscon&id=497&aid=18952http://bpea.net.cn/en/index.php?m=newscon&id=497&aid=18953http://bpea.net.cn/en/index.php?m=newscon&id=497&aid=18944

协会主要成员：BPEA main members include:

吴尚志 创始人、董事长鼎晖投资

Wu Shangzhi,Chairman of CDH Investments

邵秉仁 原国家经济体制改革委员会副主任

Shao Bingren, Former Deputy Director of the State Economic System Reform Commission

方风雷 董事长厚朴投资

Fang Fenglei, Chairman of HOPU Investment

赵令欢 弘毅投资总裁联想控股有限公司常务副总裁

John Zhao,CEO of Hony Capital,Executive Vice President of Legend Holdings

北京股权投资基金协会成立于2008 年 6 月 20 日

协会服务中心 :为会员及相关从业人士提供 : 专业咨询、辅

导，基金注册，商务会议、培训等服务。

协会致力于：促进行业环境建设 建立自律监管机制

维护会员合法权益 研究行业发展动向

培养相关专业人员 组织内外交流合作

BPEA committed to:Promote the issuance of preferential policies for PE industryBuild the self-regulatory discipline of PE industrySafeguard the legitimate rights of membersResearch development trends of PE industryTrain relevant professional individualsCooperate with domestic and overseas institutions

BPEA Service Center:BPEA provides services for members and relevant industrial individuals: professional consultation and guidance, fund registration and recording, business conference,training and so on.

Beijing Private Equity Association (BPEA) was established on Jun 20, 2008

田溯宁 创始合伙人、董事长宽带资本

Edward Suning Tian, Founder and Chairman of CBC Capital

刘澄伟 总裁苏州元禾控股股份有限公司

Lin ChengWei, President of ORIZA HOLDINGS

单祥双 创始人、董事长兼总裁中科招商集团

Shan Xiangshuang, Founder,Chairman and President of CSC GROUP

倪泽望 董事长深圳市创新投资集团

Ni Zewang, Chairman of Shenzhen Capital Group Co.Ltd

邓锋 创始人、董事总经理北极光创投

Feng Deng, Founder and Managing Director of NLVC

刘乐飞 首席执行官 中信产业基金

Liu Lefei,CEO of CITIC Private Equity Funds Management Co., Ltd.

熊晓鸽 创始合伙人IDG 资本

Hugo Shong , Founding General Partner of IDG Capital Partners

李爱庆 董事长北京科桥投资

Li Aiqing, Chairman of Beijing Co-Bridge Investment Advisor Ltd.

何小锋 教授、博导北京大学经济学院金融系

He Xiaofeng，Professor and Doctoral Advisor of the Finance Department of theEconomics School at Peking University

沈南鹏 全球执行合伙人红杉资本中国基金

Neil Shen, Founding Managing Partner of Sequoia Capital China

张懿宸 董事长、首席执行官中信资本

Zhang Yichen, Chairman and CEO of CITIC Capital

于剑鸣 管理合伙人 新天域资本

Yu Jianming, Managing Partner of New Horizon

杨向东 董事总经理凯雷投资集团凯雷亚洲基金联席主管Xiang-Dong (X.D.)Yang,Managing Director and Co-Head of Carlyle Asia Partners ("CAP")

熊焰 董事长国富资本

Xiong Yan, Chairman of Wealth Capital

宋斌 合伙人云月投资

Robin Song, Partner of Lunar Capital Management

王晓波 总经理亦庄国投

Wang Xiaobo, General Manager of E-Town Capital

李昊 董事长江铜有邻 Harry LI, Chairman of JCC ASSET MANAGEMENT CO.LTD

姬连强 总裁文化中心基金

Ji Lianqiang, President of BCCF

游文丽 董事总经理首钢基金

You Wenli, Managing Director ofBeijing Shougang Fund Co.,Ltd

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