Private equity and venture capital (PE/VC) investment volume in the telecommunications, media and technology (TMT) industry recovered slightly in the first half of 2019 after a sharp drop in the four quarter of 2018, according to a report released by accounting firm PwC on Friday.
There were 1,649 PE/VC deals in the TMT industry in the first half of 2019, down 12 percent from the second half of 2018. The 878 deals that disclosed financial terms collected a total value of US$14.89 billion, which was a three-year record low, the report said.
The number of large-sized deals plummeted in the first half of 2019, with only 29 deals involving a single deal value over US$100 million, reducing by half from the second half of 2018.
“The lack of large-scale and high-quality deals at the supply end was the main factor leading to the decline in investment value in the first half of 2019,” said Vincent Cheuk, leader of the private equity group’s southern China division at PwC China.
With regard to sub-sectors, the Internet and mobile Internet industry remained at the top of the list in terms of investment value in the first half of 2019, with 651 deals generating a total value of US$7.73 billion.
The technology sub-sector had the largest deal volume, with 866 deals collecting deal value of US$6.51 billion. The telecommunications sub-sector remained sluggish and was the only sub-sector without a US$100 million deal over the period, the report showed.
Cheuk expected that the investment volume in the TMT industry will continue to grow and further drive the increase of investment value in the short term, thanks to the implementation of preferential tax policies for VC investments and tax reductions for micro and small-sized businesses.