China Data Insight (Year-End 2018)
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Fundraising for China-focused private capital vehicles swelled to USD35 billion in 2018 despite reports of the country’s economic slowdown and ongoing trade tensions with the United States. Driven by 10 funds raising USD1 billion or more, fundraising more than doubled compared to 2017. Venture capital (VC) accounted for 42% of China’s overall fundraising total, aided by the USD2.5 billion close of Yunfeng Capital Fund III and USD1.2 billion close of Shunwei China Internet Fund IV. Technology-intensive sectors—such as software and pharmaceuticals & biotechnology—form a key part of the Made in China 2025 plan and attracted nearly USD12 billion in disclosed capital invested. Investment in software grew to USD1.8 billion, an increase of 159% from 2017. Furthermore, the pharmaceuticals & biotechnology sector attracted the majority of capital invested across all health care segments in 2018, led by CITIC Capital’s USD447 million investment in Harbin Pharmaceuticals. With Chinese government policy increasingly focused on supporting high-tech sectors, boosting domestic consumption, and addressing quality-of-life issues, GPs in China will likely continue to align their investments with these goals.