Venture capital (VC) investment in China reached a record high of over 40 billion U.S. dollars in 2017, up 15 percent year on year, an industrial report showed.
The positive sentiment was driven by a number of mega deals as investors sought opportunities in artificial intelligence (AI), autotech and enterprise services companies, according to the latest report by global auditing and consultancy firm KPMG.
China accounted for five of the top 10 largest VC financings globally in Q4 2017, while continued investor focus on quality resulted in a decline in the overall number of deals to 75, the lowest quarterly figure since Q2 2013, according to the report.
In Q4, corporate participation in China VC deals was 32.3 percent, higher than the global average of 18.7 percent. Corporate VC investment in China hit 11.7 billion U.S. dollars in Q4, the second-highest in the past decade.
“AI investment is a big focus in China, not just for VC investors, but also for the large tech players,” said Egidio Zarrella, partner and head of clients and innovation at KPMG China.
The report also highlighted that enterprise services companies have gained ground in Asia, particularly in China, while the autotech industry is attracting significant interest, with a number of sizeable deals concluded in Q4.
Chinese investors are focused on rapidly scaling and gaining market share so that they can quickly dominate the market, and many Chinese tech giants conducted acquisitions to compete in different areas, according to Irene Chu, partner and head of technology for Hong Kong at KPMG China.
Globally, VC investment hit a decade high at 155 billion U.S. dollars in 2017 despite a slowdown in deal volume. The global VC market is expected to remain strong in 2018, with healthcare, biotech and autotech expected to continue to grow rapidly, according to the report.