China’s tech M&A in 2017: Less consolidation, higher valuations

Consolidation, a normal part of any industry, generally consists of three stages: fragmentation, acquisitions & expansion. The stages are the same for all industries, yet every industry will experience these stages differently.

2015 was a banner year of consolidation for China’s technology industry, marked by a frenzy of M&A cases among top players across various vertical sectors while leaders began to emerge from the early fragmented stage.

Such M&A cases could be found everywhere in joint attempts to scoop the market and share the resources, from red-hot sectors like ride-hailing (Didi/Kuaidi), local listing services (58.com/Ganji.com) and O2O (Meituan/Dianping) to smaller fields such as online education (51talk/91waijiao) and social e-commerce service (Pinduoduo/Pinhaohuo). The market consolidation trend continues in co-working space with the merger between URWork and New Space earlier this year.

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