GP Bullhound, a leading technology advisory and investment firm, provides transaction advice and capital to leading entrepreneurs and founders. In its “Asian Insights” newsletter, the company summarises the key themes occurring in the Asian technology ecosystem and explores the flow of capital from Asia into Europe and the US, by analysing M&A and fundraising activity.
Elsa Hu, Executive Director, comments, “We are starting to see a clear shift of Asian investment destination from the US to Europe. It will be interesting to see how data from later this year plays out.
“We also see UK targets gaining strong momentum in deal volume with Chinese investors this quarter despite a decline in Chinese outbound tech investments across the board.”
The newsletter reports a clear shift of tech investment destination from the US to Europe, with a QoQ increase in both deal volume and value of Asian money into European fundraising rounds.
The number of US fundraising deals with Asian investors has dropped to its lowest point since Q1 2018, and that includes eight Softbank deals.
There has been a low level of M&A activities across the board; compared to investing, Asian investors are becoming less interested in acquiring European assets.
US tech assets lost appeal to Asian investors in both M&A and fundraising scenarios.
Fintech and transport-tech rose to the top of target sector charts; for Europe, fintech is clearly the hyped sector as it brought in over US$1bn investment in seven deals.
Transport-tech gained traction in both Europe and the US, with over US$2bn transaction value in the US and a further eight deals in Europe.
Asian tech startups continue to attract European and US investors, with a steady increase in deal volume from European investors since Q1 2018.
US investors are becoming more comfortable and sophisticated with the Asian tech market as they participate in more rounds of fundraising with smaller ticket sizes.
Sector wise, apart from an identical appetite for digital media and e-commerce, US investors show a preference for software, while European investors favour data & analytics.
Chinese outbound tech investment has hit a new low since Q1 2018, with the UK nevertheless enjoying the spotlight. In spite of a decline in Chinese outbound tech investments into the rest of the world, deal volume with UK targets gained strong momentum this quarter. Six deals from China made the UK the most popular destination in Europe and the third globally for Chinese investors.
Sector wise, Chinese investors have a strong preference for fintech (crypto inclusive) and data & analytics.