Private market dealmaking remains depressed in Greater China and surrounding territories as economic headwinds and geopolitical tensions introduce caution into the market.
Here’s a look at five charts from our 2024 Greater China Private Capital Breakdown showcasing key trends across venture capital and private equity.
Greater China’s VC and PE markets have both seen deal value drop, with neither projected to reach last year’s levels.
VC has been hit harder by the slowdown in activity in recent years with deal value falling 28.7% from 2022 to 2023 compared to just 0.5% for PE over the same period. This year could see the reverse, however, based on the current pace of dealmaking.
Fewer deals are also taking place across both asset classes. The region is on track for its lowest PE and VC deal counts in a decade.
Despite ongoing tensions between the US and China, the share of VC deals in the region with US investor participation has actually risen this year. Some 5% of rounds featured these backers, up slightly from 4.9% in 2023.
Among the deals this year with US investor involvement is generative AI startup Moonshot AI’s $1 billion Series B, which counted Microsoft among its backers. Life sciences company Jixing Pharmaceuticals raised a $162 million Series B led by Bayer and US-based RTW Investments.
However, US investor participation is well below historical norms as economic uncertainty and regulatory scrutiny from both countries resulted in a pullback of US investors.
China’s AI and machine learning startups are on track to beat last year’s annual VC deal value total, with $4.2 billion invested in H1.
Deal count has slowed from previous years, but round sizes are trending upwards again having shrunk in both 2022 and 2023. The median deal size saw a modest increase to $10.4 million in the first six months of the year but remains well below 2021’s peak of $15.4 million.
Median PE deal size has fallen from its peak of $27 million last year to $19.7 million in H1 as smaller transactions increase their share of deal count.
Half of PE deals to have closed in the first six months of the year were under $25 million, and the region saw no transactions above $2.5 billion.
PE growth remains the dominant deal type in Greater China, with 88 closed in H1 compared to 13 buyouts.
Healthcare PE deals had matched last year’s total deal value only halfway through 2024. At the current pace, the sector is set to see its highest level of deal value since 2021.
The $1.1 billion GL Capital-led buyout of Hong Kong-listed SciClone Pharmaceutical was H1’s largest healthcare PE deal, followed by telehealth company TaiDoc Health’s $128.9 million growth deal.
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