Deals to e-commerce startups fell for the third consecutive quarter in Q4’16, dropping to a five-year low of just 119 deals. In Q4’16, e-commerce startups attracted fewer than half the number of deals they did at their peak, in Q3’15. In total, e-commerce deal count fell 23% in 2016 to 713 deals, while funding dropped 44% to roughly $9.1B.
We define the e-commerce category as internet and mobile startups that sell physical goods, not including food or services.
Annual deals and dollars
The drop in deal count in 2016 put the full-year at its lowest level since 2012, while funding came in below 2014’s total.
UAE-based e-commerce platform Noon raised the largest round of the year in Q4’16 deal, with a $1B investment from the Public Investment Fund of Saudi Arabia, among others. Chinese e-commerce conglomerate China Internet Plus followed, with a $500M growth equity round in Q1’16, while Chinese e-commerce and financing platform Qufenqi placed third with its $449M Series F in Q3’16.
China Internet Plus ranked first in 2015, when it raised a $2.8B growth equity investment in Q4’15. 2015 also saw a second $1B+ deal: a $1B Series E investment into South Korean e-commerce platform Coupang by the SoftBank Group in Q2’15.
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Quarterly deals and dollars
E-commerce startups saw 119 deals in Q4’16, worth nearly $2.1B in total. While deal count fell to a five-year low, funding remained above 2012-2013 levels. However, a single deal boosted Q4’16 funding: the $1B investment into Noon.
Noon, which had not yet launched at the time of the investment, aims to become a broad e-commerce platform serving the Middle East, and will likely compete with Dubai-based e-commerce unicorn Souq.com ($390M in disclosed funding, $1B valuation).
We saw three $100M deals tie for second place in Q4’16. Indonesian online marketplace Matahari Mall raised a $100M corporate minority round from Lippo Group and Mitsui & Co, and two Chinese used car e-commerce sites – Souche, and Tiantian Paiche – each raised a $100M Series C. In other notable deals in the fourth quarter, Daling, a mobile platform that sells overseas goods to Chinese consumers, raised a $72M Series D; beauty subscription startup Memebox raised a $60M Series C tranche, growing total funding to $157M; and Rent the Runway raised a $60M Series E, to reach $176M in total funding.
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