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China records all top ten largest VC deals in APAC in Q1’21, finds KPMG analysis

Embedded AI solutions become high priority for investors in China

Embedded AI solutions become high priority for investors in China

  • Embedded AI solutions become high priority for investors in China

  • SEHK continues to attract secondary listings from homecoming companies

22 April 2021, Hong Kong – Asia-Pacific continued to be an attractive market for venture capital (VC) investment in Q1’21, driven by the continued resurgence of investment in China, which recorded all top ten largest VC deals in the region, according to KPMG analysis.

KPMG’s Venture Pulse Q1 2021 report finds that the Asia-Pacific region saw USD 31 billion in VC investment across 1,615 deals in Q1’21, representing a robust amount compared to historical norms, mainly driven by the mega-deals led by a USD 3 billion raise by Xingsheng Selected.

China saw USD 24.6 billion in VC investment during Q1’21, representing more than double the USD 10 billion it saw in Q1’20. In addition to Xingsheng Selected, enterprise AI solutions company 4Paradigm raised USD 700 million, electric vehicle company Leapmotor raised USD 662 million, alternative battery solutions provider SVOLT raised USD 541 million, and remote healthcare provider Miaoshou Doctor raised USD 463 million. Hong Kong-based Lalamove also raised USD 1.5 billion.

Egidio Zarrella, Partner, Clients and Innovation, KPMG China, says:

VC investment is tremendously strong in China, with a significant amount of dry powder available in the market. Investor interest is quite widespread, with many different industries and technologies attracting attention. AI has remained a very significant area of investment, particularly around embedded solutions, while non-fungible token (NFT) is one area that is really starting to heat up.


China’s 14th Five-year Plan released during Q1’21 will likely drive additional investment in a wide range of key areas, including green technologies, semiconductors, TMT and chip manufacturing. AI investment focus in China has shifted from the development of AI capabilities to the use of AI for specific solutions, ranging from healthcare scanning and analysis to autonomous driving and green building solutions. Companies with embedded AI solutions are expected to be the main priority of VC investors over the next few quarters.

Patrick Chu

Irene Chu, Partner, Head of New Economy and Life Sciences, Hong Kong, KPMG China, says:

One area that will likely see growth in the future is around ESG-driven businesses. In Hong Kong, there continues to be strong interest in ESG and a dedication to reducing carbon emissions – and that is driving interest in everything from meat alternatives to smart technologies. China has also committed to becoming Net Zero by 2060, which will likely drive investment over time in a host of related sectors.


Asia-based venture-backed exit activity rose exponentially in Q1’21, with a record exit value of USD 148 billion across 104 exits, a total already higher than the USD 134 billion seen in the whole of 2020. China-based companies accounted for USD 87 billion of this total in Q1’21.

The Hong Kong Stock Exchange (SEHK) continued to be a key location for hosting IPOs in Asia, including the secondary listings of China-based companies already listed in the US. During the quarter, China-based mega-giant Baidu raised USD 3.1 billion and vehicle platform Autohome raised USD 688 million through secondary listings on the SEHK.

-Ends-

About KPMG China

KPMG member firms and its affiliates operating in Mainland China, Hong Kong and Macau are collectively referred to as “KPMG China”.

KPMG China is based in 28 offices across 25 cities with around 12,000 partners and staff in Beijing, Changsha, Chengdu, Chongqing, Foshan, Fuzhou, Guangzhou, Haikou, Hangzhou, Hefei, Jinan, Nanjing, Ningbo, Qingdao, Shanghai, Shenyang, Shenzhen, Suzhou, Tianjin, Wuhan, Xiamen, Xi’an, Zhengzhou, Hong Kong SAR and Macau SAR. Working collaboratively across all these offices, KPMG China can deploy experienced professionals efficiently, wherever our client is located.

KPMG is a global organisation of independent professional services firms providing Audit, Tax and Advisory services. We operate in 146 countries and territories and in FY20 had close to 227,000 people working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.

In 1992, KPMG became the first international accounting network to be granted a joint venture licence in mainland China. KPMG was also the first among the Big Four in mainland China to convert from a joint venture to a special general partnership, as of 1 August 2012. Additionally, the Hong Kong firm can trace its origins to 1945. This early commitment to this market, together with an unwavering focus on quality, has been the foundation for accumulated industry experience, and is reflected in KPMG’s appointment for multi-disciplinary services (including audit, tax and advisory) by some of China’s most prestigious companies.

Media enquiries:

Nina Mehra
KPMG
Direct: +852 2140 2824
Email:
nina.mehra@kpmg.com

Isaac Yau / Isabel Kwok
Citigate Dewe Rogerson
Direct: +852 3103 0112/+852 3103 0123
Email:
KPMG@citigatedewerogerson.com

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