European TMT attracts Chinese investors

Published on 22.07.2015

Chinese investment in Europe has seen a spike in recent years. One of the areas which appears to be most appealing to Chinese companies is TMT – and investors are especially looking at companies within the subsectors of FinTech, big data, smart city, game and wearable hardware, TMT Finance understands.

Speaking to TMT Finance, Lin Feng, CEO of DealGlobe, said that Chinese investors have a set of preferred TMT subsectors to focus on in different regions within Europe. Feng – who trained as an investment banker before joining growth equity fund Summit Partners – said Chinese companies are currently looking for investment opportunities in a few main areas: FinTech and smart city businesses in the UK; gaming companies in Germany and Northern Europe; and med-tech, software and advertising tech businesses in Israel, with the latter becoming a hub for Chinese investment in TMT.

Feng said: “The new media sector is another hot sector, especially the AV content production, advertising tech… we have quite a few clients who are very interested in investing in these businesses.” Feng founded DealGlobe in early 2014 after he left Summit Partners as an investment professional. The company, which has offices in London, Shanghai and Beijing, operates a digital platform providing capital raise & M&A services, matchmaking European SMEs with Chinese investors. DealGlobe has been active in recent months helping Chinese companies such as Fosun, Blue Focus, Kalends (Kunlun Wanwei), IDG Ventures, Nord Engine, Legend Group, Cathay Capital and China Equity evaluate investment opportunities in Europe.

Feng also said that some clients have shown interest in SARS software businesses, as B2B software businesses are still underdeveloped in China. Several British or European companies specialising in B2B software have recently received strong interest from Chinese investors, he added.

“In the TMT sector, especially in tech or internet businesses, Chinese investors are not currently interested in bringing the acquired business into the Chinese market. Investors are choosing to make financial investments [in TMT], rather than pure strategic investments,” said Feng.

Aside from TMT, Chinese investors are also targeting sectors such as fashion & lifestyle, industrial technology, as well as healthcare. In these sectors, Chinese investors are increasingly looking to make controlling acquisitions with the goal of bring foreign products and services into China.