Published on February 24, 2014
Asia eCommerce Report TABLE OF CONTENTS EXECUTIVE SUMMARY 2 INVESTMENT & DEAL VOLUME 3 DEAL VOLUME BY SUB-INDUSTRY 5 GEOGRAPHIC REVIEW 1. 2. 3. 14 INDIA CHINA RUSSIA 6 7 8 TO INVESTORS 9 EXIT ACTIVITY 10 EXIT VALUATIONS 11 © 2013, CB Insights. All rights reserved. For more information about CB Insights, please email firstname.lastname@example.org. www.cbinsights.com
2 Asia eCommerce Report Asia eCommerce – Financing way up, exit activity growing but valuations still small. Asian eCommerce companies have attracted $6.9B across 383 deals from investors since 2010. India and China, not surprisingly, have been the largest markets for activity. While exit activity has also grown, exit valuations have been pint-sized. With forecasts that Asia will be home to over half of the world’s population by 2020 and 1/3 of the world’s consumer spend, it is perhaps only natural to expect that eCommerce activity to the region is on a tear. And it is. Since 2010, $6.9B has been invested in 383 deals involving Asian eCommerce companies. Deal volume and funding activity to the region are up 31% and 56% year-over-year (YoY) respectively. But while financing growth is high, the exit environment for Asian eCommerce companies has been flaccid. Yes – exit activity has grown but the majority of the exits are small (<$50 million) – clearly not venture-level exits. Based on their willingness to plow increasing amounts of money into Asia’s eCommerce sector, investors believe the tide will turn. Will it? India leads on financing deal activity … India has seen over 150 eCommerce deals since 2010 with 25 deals coming in 2013 already. Well-funded Indiabased companies include Amazon competitor Flipkart and eBay-backed Snapdeal. …While China is the clear financing winner Mega-deals to companies including 360buy.com and 55tuan.com saw Chinese eCommerce companies rake in $4.8B from investors since 2010. Over 2/3 of Russia Deals Go to Apparel and Travel Russia has seen 61 eCommerce deals since 2010 and 2/3 of the deals were to Apparel or Travel companies. Investment spans a diverse array of sectors Deal share is spread across everything from travel to apparel & accessories to food & grocery. As investors try to find each market’s Amazon, the multi-product category has seen an increase in deal activity. The most consistently large area of investment across Asia has been to Apparel & Accessories which has consistently taken 1 of 4 deals. Large deals to the likes of Rocket Internet-backed Zalora and China-based Moonbasa are among the more well-funded Asia-based apparel focused e-tailers. Tiger Global is region’s most active investor Tiger Global Management is the most active investor in Asia’s eCommerce sector. The top 5 is rounded out by Accel Partners, Intel Capital, Sequoia Capital and IDG. Tiger is doing deals across Asia but a vast majority of their eCommerce investment activity is in India. www.cbinsights.com Uptick in exit activity in 2012; 2013 also strong There were 29 exits of Asian eCommerce companies in 2012. And the momentum is continuing into 2013 with 14 exits year-to-date. Indian eCommerce companies have been responsible for more than 4 of 10 exits over time and are almost 50% of exits in 2012 and 2013 to-date. Despite all the excitement, exit valuations are humdrum 60% of Asia’s eCommerce exits with disclosed valuations have been for less than $50 million. The largest exits were to companies like China-based DangDang and VIPshop and India-based MakeMyTrip which all IPO’d. China-based LightInTheBox also went public last week. While the LightInTheBox IPO – the first of a Chinese company in 2013 – performed well and VIPshop’s price has rebounded, will it be enough to reverse the tepid post-IPO performance of other Asian eCommerce companies? The poor valuation outcomes for Asia eCommerce companies to-date coupled with the high degree of short interest in public Chinese companies (by firms like Muddy Waters) suggests that the sector overall may be exitchallenged for the time-being, and Chinese companies in particular face some significant headwinds. If LightInTheBox’s post-IPO performance continues to stay strong and if Alibab which is slated to IPO late this year fares well, this may portend good things for the Asian eCommerce industry.
3 Asia eCommerce Report $6.9B and 383 Deals – Asia eCommerce is Booming Deal volume and funding are up 31% and 56%, respectively, year over year (YoY). The significant uptick in Q2’11 funding was driven by several mega-deals in China including 360buy.com ($1.5B), 55tuan.com ($200M) and Lashou Group ($110M). www.cbinsights.com
4 Asia eCommerce Report India Leads Deal Activity; China Dominates Funding Investors have poured $4.8B into Chinese eCommerce companies. India has seen over 150 eCommerce deals since 2010, with 25 deals coming in 2013 already. www.cbinsights.com
5 Asia eCommerce Report Diverse Areas of Focus; Apparel is Biggest Area Venture-backed Apparel & Accessories websites in Asia, which include China-based Moonbasa and Rocket Internet’s Zalora, consistently take more than 1 of 4 every Asian eCommerce deals. www.cbinsights.com
6 Asia eCommerce Report While YoY deal activity is up just 7%, YoY funding through Q2’13 has grown 12% behind big deals to Flipkart ($150M round in Q3’12) and Snapdeal ($50M round in Q2’13). The majority of all eCommerce deals in India went to Apparel, Discount or Travel companies. Highlights: 2010 - 2013 154 deals | $978M Top Deals Flipkart Snapdeal Yatra Online Cleartrip Fashionandyou.com Top Investors Tiger Global Management 16 deals Accel Partners 12 deals Blume Ventures 10 deals Nexus Venture Partners 10 deals Norwest Venture Partners 9 deals Sequoia Capital 9 deals Select Exits MakeMyTrip $477M | IPO | 2010 UrbanTouch 2012 | Acquired by Fashionandyou.com LetsBuy.com 2012 | Acquired by Flipkart SoSasta 2011 | Acquired by Groupon www.cbinsights.com India India: Close to $1B Across 154 Deals in the Last 3 Years
7 Asia eCommerce Report YoY funding through Q2’13 has ticked up 106% driven by two large rounds for 360buy.com. YoY deal activity has declined 39% with lackluster deals activity in Q2’13. The lion’s share of deals in the past three years have gone to the Apparel, Discount or Multi-Product eCommerce vendors. Highlights: 2010 - 2013 83 deals | $4.8B Top Deals 360buy.com VANCL 55tuan.com Lashou Group Dianping Top Investors IDG 11 deals Doll Capital Management 9 deals Sequoia Capital 9 deals GSR Ventures 8 deals Lightspeed Venture Partners 7 deals Select Exits Dang Dang $1.25B | IPO | 2010 Vipshop $633.6M | IPO | 2012 LightInTheBox $465M | IPO | 2013 www.cbinsights.com China China: Funding On the Rise But Deals Slip
8 Asia eCommerce Report While deal activity through Q2’13 has increased 15%, funding has fallen 90% YoY driven by a big Q2 2012 when investors poured $244M into Russian eCommerce cos. Large deals in Q2’12 included Avito.ru and Ulmart. Most deals went to Apparel or Travel companies. Highlights: 2010 - 2013 61 deals | $731M Top Deals Ozon.ru Avito.ru Ulmart Lamoda.ru KupiVIP.ru Top Investors Kinnevik 5 deals ru-Net 5 deals Mangrove Capital Partners 4 deals Tiger Global Management 4 deals Selected Exits Wikimart 2010 | Acquired by Tiger Global Management Darberry 2012 | Acquired by Groupon Sapato.ru 2012 | Acquired by Ozon.ru Foodik 2012 | Merged with Delivery Hero www.cbinsights.com Russia Russia: Deal Activity Rises Slightly but Funding Dips
Asia eCommerce Report 9 Tiger Global Tops Most Active Asia eCommerce Investors Tiger Global Management leads investment activity, followed by Accel Partners. Both are heavily involved in India, where each has participated in 12 or more eCommerce deals since 2010. Investor Companies Deals Tiger Global Management Accel Partners Intel Capital Sequoia Capital IDG Blume Ventures Doll Capital Management Rocket Internet Lightspeed Venture Partners ru-Net Helion Venture Partners SeedFund GSR Ventures Norwest Venture Partners Summit Partners Mangrove Capital Partners Nexus Venture Partners Inventus Capital Partners Kalaari Capital Kinnevik 18 17 12 12 12 10 8 7 7 6 6 6 5 5 5 5 5 5 5 5 25 17 14 18 16 10 11 7 10 7 6 6 8 11 7 7 10 5 6 8 India China Russia Singapore Thailand Japan Hong Kong Taiwan UAE 16 12 7 9 5 10 4 1 2 1 2 3 9 11 4 2 3 2 1 9 2 3 2 6 6 9 1 3 10 5 6 1 1 1 7 5 8 2 1 4 2 1 5 1 2 2 www.cbinsights.com Data Integrity Note: All investments made by an international sub-fund are listed under the umbrella investor. Accel Partners, for example, would include all relevant e-Commerce investments from its Accel India Venture Fund. www.cbinsights.com
10 Asia eCommerce Report 2012 Sees Uptick in Exits; 2013 Sees Momentum Continue There have been 14 exits of Asian eCommerce companies in 2013 already. Indian eCommerce companies represent more than 4 of 10 exits over time and are almost 50% of exits in 2012 and 2013 to-date. www.cbinsights.com
11 Asia eCommerce Report 60% of Exits with Disclosed Valuations < $50 Million Although some large exits by the likes of DangDang and VIPshop of China and MakeMyTrip of India have occurred, most of Asia’s eCommerce exits have been small. Post IPO performance by public Asian eCommerce firms doesn’t portend great things for the sector. www.cbinsights.com
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