Source|IT Orange Author|Zhang Junyu Editor|Wu Meimei Statistical Review|Fok Yingxian Cover Image|Pexels
From the perspective of the prosperity of the primary market, compared with the whole of 2023, the capital market this year has shown a slight warming trend.
IT orange data shows that in the first half of 2024, there will be 2,682 private equity financing events in the domestic primary market, an increase of 1.56% month-on-month and 4.56% year-on-year; The estimated total investment is about 374.577 billion yuan, an increase of 1.64% month-on-month and 2.35% year-on-year.
The macro situation of the domestic primary market
According to IT orange data, in the past three years, the proportion of RMB investment has generally shown a steady upward trend, increasing from 73.37% in H1 2022 to 85.61% in H1 2024, of which H1 in 2023 has dropped slightly to 73.57%.
In 2022, the proportion of domestic US dollar investment in H1 was 26.17%, and the proportion of US dollar investment in the past three years has shown a downward trend, and by 2024, the proportion of US dollar investment has dropped to 14.23%, almost halved.
Looking back at the frequency of investment transactions, RMB investment occupies an absolute dominant position in equity investment in the primary market, accounting for 96.7% of RMB investment events in the first half of 2024, with a total of 2,593 cases. The number of US dollar investment events decreased to 79, accounting for 3%; The rest of the investment events in Hong Kong dollars, New Taiwan dollars and euros are only in single digits, accounting for a very small proportion.
With the intensification of capital cutting and "decoupling", judging from the current situation, a large number of investment funds need RMB to support the scene, US dollar funds are seeking investment in emerging directions such as going overseas/globalization, and local enterprises are more willing to accept RMB financing. It is foreseeable that the domestic situation of RMB investment as the backbone will continue, and this situation will be difficult to change in the next few years.
In the first half of 2024, the advanced manufacturing industry was the hottest investment industry (by total financing) for five consecutive and a half years, accounting for 39.04%; Involving integrated circuits, new energy, new materials and many other fields, this kind of hard technology investment boom also reflects the demand of policies led by RMB funds.
The proportion of healthcare financing decreased slightly, from 17.86% in H1 2022 to 16.92% in H1 2023, and showed a slight recovery in H1 2024, reaching 17.26%, but it is still not at the previous level. In the past year, the financing transaction volume of artificial intelligence and enterprise services accounted for a similar proportion of the total, with 8.58% and 9.66% respectively in the first half of 2024; The e-commerce retail sector accounted for 3.95% of financing transactions, and many other sectors together accounted for 21.51%.
Judging from the changes in the cumulative proportion of investment transactions in the top five popular industries, the five major industries have concentrated nearly 80% of the total domestic financing on average in the last five and a half years, and the investment has continued to concentrate.
In the first half of 2024, the most active segments of China's primary market include integrated circuits, biotechnology and pharmaceuticals, new energy, new materials, and medical devices.
Among them, the number of investment events in the field of integrated circuits was the largest, reaching 288; The number of investment events in the biotechnology and pharmaceutical sectors was 232, and the number of semi-annual investment events in the remaining sub-sectors such as new energy, new materials, medical devices, and AI industry applications reached 100.
Behind the hot investment in these popular tracks, it is often closely related to factors such as national strategy, industrial policy, technological breakthroughs, market demand, etc., the national policy to promote the development of the semiconductor industry, and the current trend of combining artificial intelligence and industrial development to promote the application financing of the AI industry.
In the first half of 2024, the top 10 segments of China's new economy sector with the largest amount of financing include property services, integrated circuits, new energy, biotechnology and pharmaceuticals, AIGC, automobile manufacturing, AI industry applications, and other industries.
The financing amount of these ten subdivisions exceeded 10 billion yuan, of which the financing amount of property services was the largest, reaching 60 billion yuan, mainly affected by individual super financing events; The financing amount of medical devices also reached 10.268 billion yuan.
In addition to the popular industries (integrated circuits, new energy, biotechnology and pharmaceuticals) where transactions are generally active and the amount of financing is high, there are also industries with a small amount of financing but a high amount of financing.
For example, Wanda Commercial Management in the property service field made a strategic investment in March 2024, with a single amount of 60 billion yuan, jumping to the first place in the financing amount of the subdivided track field.
In addition, Cintai Life Insurance in the insurance industry sector made a strategic investment with a total value of 9.373 billion yuan in January 2024, almost single-handedly increasing the overall financing amount of the insurance industry.
In terms of large models, Moonshot AI, the dark side of the moon, received a $10 Series A financing, and Minimax Xiyu Technology also raised $600 million, greatly increasing the total financing of the AIGC industry. AIGC's strong attraction to capital comes from the activity of technological innovation, market potential, application scenarios and other aspects.
In addition, the financing scale of Jintai Pharmaceutical and the unmanned freight truck technology developer "Qianhang Technology" is also more than hundreds of millions of yuan.
From the perspective of the investment transactions actually completed in the primary market, the 10 cities with high activity in China are Beijing, Shanghai, Shenzhen, Suzhou, Hangzhou, Nanjing, Hefei, Guangzhou, Chengdu and Wuxi.
Among them, Beijing, Shanghai, Shenzhen, Suzhou, and Hangzhou all had more than 100 investment transactions, and Beijing, Shanghai and Shenzhen had more than 300 investment events, and Beijing was the most active city in China in the first half of 2024, with 381 public investment transactions, while Wuxi City also had 56 transactions.
In terms of investment amount, start-ups in Shanghai received the most financing in H1 2024, reaching 63.974 billion yuan.
In second place, Beijing's total financing amount reached 61.208 billion yuan, leading other cities off a cliff.
High-profile financing star companies in Shanghai and Beijing this quarter include Zhiji Auto's 8 billion yuan Series B financing, Yuanxin Satellite's 6.7 billion yuan Series A financing, Moonshot AI's $1 billion Series A financing, and the $800 million strategic financing of Knowing Chedi.
Startups in Hangzhou and Hefei will also raise about 20 billion yuan in the first half of 2024, of which the main recipient of high financing is Changxin Storage, a memory chip unicorn based in Hefei, which announced strategic financing of 10.8 billion yuan in 2024; and Hangzhou-based comprehensive insurance company "Xintai Life Insurance", which introduced new strategic investment at the beginning of the year - four state-owned enterprises in Zhejiang, with a total capital increase of 9.373 billion yuan and an additional registered capital of about 5.204 billion yuan.
According to IT orange data, in terms of the number of investment shots, Zhongke Chuangxing is the first active investment institution in China in the first half of 2024, Shenzhen Capital ranks second, and MiraclePlus, Zhuoyuan Asia, and CICC Capital jump to the top five on the active list.
It is worth noting that among these active institutions, there have been many institutions with state-owned backgrounds, not to mention representatives of local RMB funds and state-owned assets such as Shenzhen Venture Capital, as well as Hefei High-tech Investment, Wuxi Venture Capital/Wuxi Financial Investment, Suzhou High-tech Financial Holdings/Suzhou High-tech Venture Capital, and Shenzhen High-tech Investment, which have climbed and ranked first.
It can be seen that in addition to Hefei and Shenzhen, the direct investment of state-owned assets and government guidance funds in Jiangsu is more active, and the state-owned assets in Suzhou, Wuxi and other places have investment entities on the list. This further shows that under the guidance of the current policy, RMB funds in the domestic new economy venture capital are in a strong position.
At present, among the top market-oriented institutions, Sequoia China, Shunwei Capital, Qiming Venture Capital, etc. are more active. Among the early-stage investment institutions, Zhongke Chuangxing and MiraclePlus are currently more active, the former mainly invests in hard technology, and the latter focuses more on artificial intelligence and large model investment.
In the list of active new economy investment banks/financial advisors in the first half of 2024, Light Source Capital and Huaxing Capital ranked first and second respectively.
Other active FA institutions are: Cathay Capital, Index Capital, Qingtong Capital, Taihe Capital, Haoyue Capital, Gengxin Capital, Yuewei Capital, Yunxiu Capital, etc.
Financing stars and unicorns in the first half of the year
From the perspective of the financing ecology of start-ups, how is the cake of the entire investment amount divided?
There are 407 start-up companies in China with a single financing of one million yuan, with a total financing amount of 766 million yuan; A total of 1,511 start-up companies with a single financing of 10 million yuan shared a financing amount of 41.442 billion yuan; A total of 721 start-ups received 100 million yuan in a single transaction, with a total financing amount of 139.494 billion yuan; A total of 41 start-ups raised 1 billion yuan in a single transaction, with a total financing amount of 122.075 billion yuan.
There are only 2 start-ups with a single financing of 10 billion yuan: Wanda Commercial Management won 60 billion yuan, and Changxin Storage raised 10.8 billion yuan; 2 companies accounted for 19% of the overall share. Nearly 1,000 startups with a single financing of less than 100 million yuan share only 11% of the financing pie.
In the first half of 2024, there are 20 domestic companies that have received financing of 2 billion yuan or more, including Zhiji Automobile, Maple Group, Dongchedi, Nezha Automobile, etc., as shown in the following table:
In the first half of 2024, a total of 21 domestic startups will be promoted to unicorns with a valuation of $1 billion+, of which 11 will be in Q1 and 10 will be new in Q2, including:
Q1 announced the newly financed large model company Moonshot AI, and the photovoltaic listed company "Sungrow" spun off Sunshine New Energy; In the second quarter, it announced that it would raise RMB 1 billion for a commercial satellite system development and development provider, for the AI pharmaceutical company JTiThe, which raised US$100 million, and for the automotive information platform KnowChedi, which raised US$800 million and was spun off from ByteDance.
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