Startupbootcamp China Industry Report

SBC China Report

Contents One Glance at China 01 Future of China 02 China Startup Ecosystem 03 Opportunities and Challenges for 04 Foreign Startups Future Key Industries 05

ONE One Glance at China First Impression of China “Big” Data in China China Economic Growth

First Impression of China The world’s largest population: 1.404 billion people The third largest geographical area: 9.6 million sq km CHINA

“Big” Data in China Internet Internet Infrastructure Resource Until December 2017, the number of Until 2017 Q2, the total length of the Chinese websites reached 5.33 million cable line reached 36.06 million with an annual growth rate of 10.6%. kilometers. Until December 2017, the number of Until 2017 Q3, the number of Internet Chinese web pages reached 260.4 billion broadband access ports reached 760 with an annual growth rate of 10.3%. million. Until 2017 Q3, the number of mobile Until November 2017, the number of communication base stations reached mobile applications (APPs) in the 6.041 million, and 3G/4G base stations Chinese market reached 3.9 million. accounted for 74%. Source: CNNIC “41th, Statistical report on the development of China Internet network”

“Big” Data in China Internet Data • The number of Internet users in China was 772 million, and the Internet Penetration Rate was 55.8%. Until • The number of rural Internet users in China was 209 million, accounted for 27%, the number December of urban Internet users in China was 563 million, accounted for 73%. 2017 • The proportion of Chinese people getting access to Internet by mobile phones, desktop computers, laptops and television was 97.5%, 53%, 35.8%, and 28.2% respectively.

“Big” Data in China Ali Data & WeChat Data In September 2017, The daily average users reached 902 million. The number of elderly users reached 50 million. The average daily WeChat messages reached 38 billion. Singles’ Day (“Double 11”) At 00:03:01 of November 11, the turnover was over 10 billion yuan! 2017 "Tmall Double 11 Global Carnival" turnover was over 168 billion 200 million yuan!

China Economic Growth 2016 1978 • The economic reform • The modernization program began. propelled the growth • China ranked tenth with of Tertiary Sector. nominal Gross Domestic • China jumped up to Product (GDP) of RMB second place with a 364.5 billion ($ 57.86 nominal GDP of RMB billion). 74.42 trillion ($11.81 billion). Source: National Bureau of Statistics of the People's Republic of China *Primary Sector: the industry providing materials for production, including planting, forestry, animal husbandry, aquaculture. *Secondary Sector: the industry processing basic materials and sold it. *Third Sector: the service industry containing all the other industries not included in Primary Sector and Secondary Sector.

China Economic Growth Chinese Cities Compared with Countries Source: Visual Capitalist. 35 Chinese Cities with economies as big as countries

China Economic Growth Chinese Cities Compared with Countries Source: Visual Capitalist. 35 Chinese Cities with economies as big as countries

China Economic Growth Chinese Cities Compared with Countries Source: Visual Capitalist. 35 Chinese Cities with economies as big as countries

TWO Future of China China’s Future Direction Digital China Manufacture China Green China Open-up China Innovation China Aging China Rural Areas’ Urbanization

China’s Future Direction China Communist Party’s (CCP) 19th Party Congress • Encourage more social entities to carry out innovation and entrepreneurship. • Carry out vocational skills training, focusing on solving structural employment contradictions. • Provide comprehensive public employment services, encourage entrepreneurship of young people and migrant workers. • Enhance the support for SMEs' innovation and promote the transformation of scientific and technological achievements. —CCP 19th Party Congress Two Centennial Goals “A moderately prosperous society” by 2021* A “strong, democratic, civilized, harmonious, and modern socialist country” by 2049* *2021: the 100th anniversary of the party’s founding. *2049: the 100th anniversary of the founding of the People’s Republic.

Digital China China’s digital globalization is only just getting started but gathering fast momentum. The bigger, younger China market is enabling rapid commercialization of digital business models on a large scale. China’s three Internet giants (Baidu, Alibaba, and Tencent) are building a multifaceted and multi-industry digital ecosystem that touches almost every aspect of consumers’ lives. The government gave digital players space to experiment before enacting official regulation and is now becoming an active supporter.

Manufacture China Made in China 2025: turn China into a “manufacturing superpower” Support the foreign-invested enterprises to get listed, and issued bonds in China, and Ten Key Sectors they are allowed to participate in the national science and technology project. In terms of New Energy Vehicles qualification licensing, standard formulation, government procurement, and the "China made 2025" policy, domestic and foreign enterprises are treated equally. Next-Generation —— Li Keqiang, Government Work Report Information Technology (IT) Biotechnology The Ministry of Industry In 2017, the Ministry of Industry and and Information Information Technology issued 25 New Materials China has set up a special Technology has reached an key areas under Made in China fund to support key projects. agreement with China 2025, including Internet of Aerospace Single project can get about Development Bank (CDB). things(IoT), new materials, smart 30 million to 50 million RMB, From 2015 to 2020, CDB will Ocean Engineering And appliances and high-end consumer some common technology provide financing of no less High-Tech Ships electronics, information security projects or key technology than 300 billion RMB, and capabilities of industrial control projects can get more than Railway multiple financial services systems, quality and safety 100 billion RMB. (like, loans, bonds, traceability system of infant Robotics investment, leasing, etc) to formula milk powder industry etc. "Made in China 2025". Power Equipment Agricultural Machinery Financial Services Support 25 Key Areas Special Fund Support

Green China Sustainable economic model: clean up environmental degradation Strict Enforcement Support Domestic of Environmental Standards Green Industries The Chinese government will support the growth of its energy-saving and environmental protection industries into Chinese government has stepped up its efforts to globally competitive firms. enforce environmental regulations through national emissions monitoring systems and central Strong support for two strategic emerging industries: new energy vehicles and government-led inspections in 15 provinces. advanced energy-saving technologies and equipment.

Open-up China One Belt, One Road(OBOR) aims to create world’s largest cooperation platform "One Belt, One Road(OBOR)" International Cooperation Forum • Create Entrepreneurial Space and Entrepreneurial Workshops for youth all over the world. • From 2018, China will hold the China International Import Exposition to attract politicians, exhibitors as well as professional purchasers all over the world to expand China Market, share cooperation opportunities between different countries. • China Development Bank and The Export-Import Bank of China will respectively provide 250 billion RMB and 130 billion RMB of special loans to support infrastructure construction, financial cooperation in OBOR. • In the next 5 years, 2500 young scientists will be engaged in short-term research work in China, 5000 people will be trained in science technology and management and 50 joint laboratories will be put into operation.

Innovation China Re-establish China as a global center of innovation and technology China’s Innovation-Driven 13th FYP innovation plan’s target Development Model - Building a national innovation system with high efficiency and synergy • Become an "innovative nation" by 2020. • Become an international leader in • Cultivate active innovation individuals or innovation by 2030. organizations. • Establish China as a world powerhouse • Deploy high level innovation base. of scientific and technological • Create high end innovation growth pole. innovation by 2050. • Build an open and cooperative innovation network. • Establish modern innovation governance structure. • Construct a good innovation ecology.

Innovation China Future Top Technologies: Cloud, IoT, Big Data, AI, BlockChain IoT Cloud / (Internet of Things) Edge Computing AI BIG Big BlockChain Data DATA “ When the Demographic Dividend is gone, here comes “ the Dividend of Technology. ——Baidu CEO, Robin Li When the Demographic Dividend is gone, here comes the Dividend of Technology. ——Baidu CEO, Robin Li

Aging China China already stepped into an aging society Aging population continues to grow, causing some problems In 2000, the Chinese population aged 65+ has reached 88.11 • The proportion of endowment insurance fund to GDP is increasing, million, accounting for 6.96%. According to international and the burden of pension expenditure is increasing. standards, China has stepped into an Aging Society. • The decrease of the labor population and the increase of human cost have caused the transfer of manufacturing activities to cheaper overseas markets. Source: National Bureau of Statistics of the People's Republic of China

Healthy China Health Service Healthy Life Health Level 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 and Security 1 5 2 0 30 1 5 2 0 30 1 5 2 0 30 Premature Mortality Life Expectancy Health Literacy ↓10％t ↓30％ of Major Chronic 19.1 20 30 10 Per Citizen 76.3 77.3 79.0 Level of Residents han2015 than2015 Diseases 2013 (%) The Number of Practitioners Infant Mortality (Assistants) Per 8.1 7.5 5.0 Rate (%) The Number of 2.2 2.5 3.0 Thousand Regular Physical Permanent 3.6 Exercisers 4.4 5.3 Residents 2014 (Hundreds of The Proportion of Millions of People) The Mortality of Personal Health 10.7 9.5 6.0 Child Under 5 About About Expenditure To Years of Age (%) 29.3 28 25 Total Health Costs (%) 2 0 2 0 2 0 Health Maternal Environment 1 5 2 0 30 20.1 18.0 12.0 Mortality (1/100 Health Industry 2 0 2 0 2 0 Thousand) The Ratio of Good 1 5 2 0 30 Weather Days In Continuous The Proportion of 76.7 >80 improvement The Industry Size Urban And Above Urban And Rural of Health Service Cities(%) —— Residents Meet >8 16 89.6 90.6 92.2 (Trillion Yuan) The Standard of National Physique Determination (%)

Rural Areas’ Urbanization The process of urbanization continues to move forward steadily Actively promoting the urbanization of rural migrants Improving urban functions By 2020, the target of urbanization rate of China's resident population • Speeding up the construction of urban traffic network. is 60%, and the urbanization rate of the household population is 45%. • Implementing the reconstruction of urban underground pipe network . • Promoting the construction of the sponge City. • Promoting the construction of new cities. • Improving the level of urban public service. Cultivate small and medium cities and characteristic town Drive the construction of New Countryside • Extending infrastructure and public services to the • Upgrading the infrastructure of the county and key towns. countryside. • Cultivating a batch of small and medium-sized cities. • Promoting the integration and development of China’s main • Speeding up the development of characteristic town. three industries in rural areas. • Promoting the development of rural e-commerce.

THREE Opportunities & Challenges for Foreign Startups Opportunities Challenges

If a startup becomes successful in China, its growth can be astonishing. Huge Growth Potential in China ％ Huge Market Capacity Consumption Growth & Upgrade Venture Capital Investment Unique Chinese Customer Profiles

Huge Market Capacity Second largest economy let firms attain huge scale Note: includes products or services ordered using the internet via any device, regardless of the method of payment or fulfillment; excludes travel and event tickets; numbers may not add up to 100% due to rounding; *excludes Hong Kong; **forecast from May 2016 Source: eMarketer, Aug 2016

Consumption Growth China will add nearly $2 trillion in new consumption by 2021

Consumption Upgrade Consumption has become the first driving force for China's economic growth 02 01 03 DPI Growth Rate is Surging Rural Huge Potential in Higher than GDP Consumption Service Consumption The Disposable Personal Income(DPI) The expenditure of residents for The number of migrant workers for per urban citizen has increased, service consumption has increased has decreased sharply, while the its growth rate has always been significantly, while the commodity number of local migrant workers significantly higher than the GDP consumption has been relatively rebounded. growth rate. decreased. In third-tier and forth-tier cities, the population of middle class grows significantly Accommodation Commodity Consumption(Food, Service consumption Apparel) GDP(constant price, on season-on-season basis) Dominant income ratio (right axis) Per capita disposable income of urban residents: cumulative on year-on-year Source: Wind, Suning Institute of Finance Source: Wind information, Suning Institute of Finance

Technology Venture Capital Investment Investors placed big bets on Chinese upstarts Chinese venture-capital investment by technology, 2016, $billion Fintech Virtual Reality Robotics and drones Autonomous Driving Artificial Intelligence Education Technology Source: Mckinsey Global Institute

Unique Chinese Customer Profiles Chinese customers have different consumption habits Globalization, technology (which gives people greater exposure to the world), and rising income levels (which give them the time and money to follow their interests) shaped Chinese customers into different profiles. 80% of Chinese consumers Consumption feel that brands and Demographic shifts are Chinese consumers are Customers tend to use boundaries—typically companies should be creating a growing passionately taking up more digitalized services. defined by age and environmentally number of single people new interests and they gender—are less relevant responsible. in China. Among urban to consumers today. -- GfK Survey are increasingly willing E-commerce was populations, 16% now live to spend money on welcomed by Chinese alone, compared with just 66 million (or 16.2%) bought Men develops grooming those wide-ranging customer due to its 5% ten years ago. five or more “green” habit, spending more on interests convenience. products in 2015, up from men skin care products. In general, single people just 4 million in 2011 (3.4%). seek smaller volumes, Notably, they are willing to Customers get accustomed Older generation begin to greater convenience, and pay a price premium - up to spend more on travel and to digitalization lifestyle. higher-quality goods. 33% - for those products. sports activities -- Alibaba’s customers study Eco-conscious Passionate Digitized Diversified Single Customer Trend Seeker Customer Customer Person Different customer profiles unravel new market trends Source: BCG Analysis, Five Profiles That Explain China’s Consumer Economy

Challenges for foreign entrepreneurs. Language Difference Cultural Differences Internet Accessibility Restriction Different Customer “ChinaSpeed” Challenging Regulatory Behavior Manifestation Environment

Different Customer Behavior Consumer behavior in China is different from the rest of the world • They are into mobile payments for its flexibility • They are natural omni-channel shoppers • They love a bargain, but price is no longer paramount • They are more demanding • They rely on social media and what their friends say about products • They prefer marketplaces to stand-alone shopping websites • They are into brands, but they aren’t very loyal (yet)

“ChinaSpeed” Manifestation ChinaSpeed In China, the time a company takes to reach over 50% domestic market penetration is much more less than other countries. Even if a product is not perfect yet, Chinese companies launch it and use customer feedback to release an improved version at ChinaSpeed. Cutthroat Domestic Competition For any successful startup hundreds or even thousands of copycats will emerge almost instantly.

Challenging Regulatory Environment Inconsistent regulations and enforcement are top challenges Top five business challenges in China 2012 2013 2014 2015 2016 2017 Inconsistent regulatory Inconsistent regulatory Shortage of qualified 01 Rising labor costs Rising labor costs Rising labor costs interpretation and unclear interpretation and unclear management laws laws 44% 46% 61% 43% 57% 58% Inconsistent Inconsistent Inconsistent regulatory Inconsistent regulatory regulatory regulatory interpretation and unclear interpretation and Rising labor costs Rising labor costs 02 interpretation and interpretation and laws unclear laws 54% 58% unclear laws unclear laws 37% 38% 39% 47% 03 Shortage of qualified Shortage of qualified Shortage of qualified Shortage of qualified Difficulty obtaining Increasing Chinese employees employees employees employees required licenses protectionism 29% 35% 37% 42% 29% 32% 04 Difficulty obtaining Shortage of qualified Shortage of qualified Shortage of qualified Shortage of qualified Corruption required licenses management management employees management 30% 26% 31% 32% 29% 30% Shortage of qualified Difficulty obtaining Increasing Chinese Difficulty obtaining required 05 Corruption Industry overcapacity management required licenses protectionism licenses 26% 29% 30% 31% 30% 29% Source: China Business Climate Survey Report 2017

FOUR China Startup Ecosystem Venture Capital in China Startups in China Typical High-tech Cities in China

Venture Capital in China Fundraising Trend Until Q3 2017, equity financings into China-based companies reached $36.73 billion through 1605 deals. Source: Dow Jones Venture Capital Report

Venture Capital in China The hottest sectors sought after by VCs The hottest sectors sought after by VCs Number of financing deals in different sectors, 2017 H1 Funds raised by different sectors, 2017 H1, billion (RMB) Source: IT Juzi and Tecent, China Venture Capital Report – 2017 H1

Venture Capital in China Venture M&A Market Activity Until Q3 2017, mergers and acquisitions(M&As) for venture-backed companies in China garnered $8.44 billion through 29 deals. The amount raised and the deal flow is already exceed the prior year. Source: Dow Jones Venture Capital Report

Venture Capital in China Chinese VC-backed IPOs Until Q3 2017, 98 Chinese VC-backed companies went public, raising $7.9 billion. Source: Dow Jones Venture Capital Report

Startups in China The newly funded startups in Chinese provinces(2017 H1) Source: IT Juzi and Tecent, China Venture Capital Report – 2017 H1

Startups in China The hottest sectors sought after by entrepreneurs Source: IT Juzi and Tecent, China Venture Capital Report – 2017 H1

China Typical High-tech Cities Listed in the 20 most high-tech cities in the world Rank 1 2 3 4 5 6 7 8 9 10 City San Francisco New York London Los Angeles Seoul Taipei Boston Singapore Toronto Chicago Country California New York England California South Korea Taiwan Massachusetts Singapore Canada Illinois Rank 11 12 13 14 15 16 17 18 19 20 Dallas-Fort City Tokyo Stockholm Vancouver Amsterdam Beijing Shanghai Montreal Bangalore Shenzhen Worth Country Texas Japan Sweden Canada the Netherlands China China Canada India China Source: 2thinknow : data innovation agency. • Startups • Smart Cities Ranking • Patents • City Innovation Policy Technological • Venture Capitalists • Number of Programmers Advancement Factors • Innovation Cities Index • Metropolitan Population Ranking • Industrial Designers

China High-tech Cities Shanghai – Building An International Startup Ecosystem Shanghai has the international culture, the economies of scale, the business infrastructure and a critical mass of talent and capital to provide fertile ground for a vibrant startup ecosystem. SHANGHAI

China High-tech Cities Shanghai – Building An International Startup Ecosystem Shanghai was ranked no.1 in English-language proficiency in China. ——EF English Proficiency Index 2017 Shanghai 56.76 ” Hong Kong 55.81 Beijing 53.83 Shenzhen 50.56 Guanghzou 50.09 Proficiency: Very low Low Moderate High Very High

China High-tech Cities Shanghai – Building An International Startup Ecosystem Government Policies Promote Innovation National “Mass Entrepreneurship And Innovation” Campaign China is hoping that technologies and Internet-driven startups can become the new economic engine, promoting growth of a successful startup ecosystem, replacing the old-style pursuit of GDP growth through manufacturing and industrial exports. The policy aims to compensate investors for as much as 60% of any actual losses resulting from the failure of seed investments in tech startups in Shanghai. The policy covers up to ¥3 million for each unsuccessful investment case, with a limit of ¥6 million per investment firm per year. Risk-compensation Policy for Angel Investors

China High-tech Cities Shanghai – Building An International Startup Ecosystem Affluent Financial Support Government Subsidy Programs Notable VC Firms In the third quarter of 2016, Shanghai was The Shanghai government offers various subsidy ranked no.2 among Chinese cities in terms of programs in different districts. the total number of angel investments. • Company Registration Subsidy • Entrepreneurship Loan • Rental Assistance Program • Social Insurance Subsidy • Service Business One-off Subsidy • Innovative Solution One-off Subsidy • Training Subsidy Kleiner Perkins Caufield & Byers

China High-tech Cities Shanghai – Building An International Startup Ecosystem Shanghai Jiao Fudan Tongji Tong University University University Science and Technology Education Hub Shanghai’s education system is extremely East China University East China competitive at all levels, of Science and Normal attracting top students from Technology University all over the country.

China High-tech Cities Shenzhen— Becoming An International Hub of Hardware Innovation A hub Of A world-class An original equipment Hardware Innovation manufacturers (OEM) Maker Hub of software

China High-tech Cities Shenzhen— Becoming An International Hub of Hardware Innovation The youngest city in China: The average age of its With 7,860,000 migrants in 2016, Shenzhen is also one population in 2016 is only 33. of the most diverse cities in the country. Shenzhen is a city with culture of tolerance and open-mindedness. It was voted China’s Most Dynamic City and the City Most Favored by Migrant Workers in 2014.

China High-tech Cities Shenzhen— Becoming An International Hub of Hardware Innovation Urban Master Planning of Shenzhen(2010-2020) Municipal Committee Secretary of Urban Layout Map Shenzhen Ma Xingrui laid out the city’s blueprint for the next five years: Qianhai: A Hong Kong-Shenzhen service center, focusing on high tech, education, art and logistics services. Futian: A political, financial and trading center. Luohu: A financial and trading services center. Longgang and Pingshan: A modern heavy industrial base. Longhua: A transportation and logistics hub. Guangming: A local high-tech and eco-agricultural base. Aerotropolis: An international logistics and supply-chain base. Shenzhen Municipal People's Government 2010 Yantian: A leisure tourism and logistics hub.

China High-tech Cities Shenzhen— Becoming An International Hub of Hardware Innovation Shenzhen has ranked No.1 for 13 years. R&D Spending in Shenzhen tops 80 billion yuan, accounts for 4.1% of GDP, putting it on a par with South Korea and Israel, In 2016, the number of PCT(Patent Cooperation which hold the world’s top-two positions in terms of investment Treaty) applications by Shenzhen is 19,648, in R&D, according to the OECD. accounts for 46% of national applications. Source: The Intellectual Property Office of Guangdong Province, Shenzhen, Shanghai, Beijing; The Statistics Bureau of related cities

China High-tech Cities Shenzhen— Becoming An International Hub of Hardware Innovation Strong Financial Support Government Subsidy Programs VC Firms and Enterprises The total amount of investment from the top • Start-Up Enterprise Subsidy 100 Shenzhen VC funds in 2016 was ¥58 • Rental Subsidy billion, up 40% year over year, which was • Social Security Subsidy invested in 987 transactions, up 16.4% year • Employment Subsidy • Micro-Financing over year. • Peacock Campaign: for High-level talents Shenzhen Capital Group Tencent Industry Win-Win Fund Source: Shenzhen Chamber of Investment

China High-tech Cities Shenzhen— Becoming An International Hub of Hardware Innovation Creative Innovation Ecosystem Makerspaces Accelerators Notable Startups Industry-Leading Companies Shenzhen is a hub for The incubator and accelerator In 2016, there are 131 Chinese Major industry-leading tech makers. network in Shenzhen is Unicorn with valuation at over companies are headquartered in relatively underdeveloped. $487 billion, among these 131 Shenzhen. Their success sets an companies, 13 are based in example and brings more Shenzhen with a valuation of investment and business around $39 billion in total. opportunities into the city.

FIVE Future Key Industries in China Digital Health Agri-food Tech Smart Manufacturing Clean Tech Ed Tech

Digital Health

Digital Health What is Digital Health? Digital health is the convergence of digital and genomic technologies with health, healthcare, living, and society to enhance the efficiency of healthcare delivery and make medicines more personalized and precise. Providers and other stakeholders are using digital health in their efforts to: Reduce inefficiencies Improve access Reduce costs Increase quality Make medicine more personalized for patients Patients and consumers can use digital health to better manage and track their health and wellness related activities.

Digital Health The Digital Health Revolution Digital Revolution Genomic Revolution + Wireless sensors & Devices PREVENTION RESULTS Mobile connectivity PREDICTION Social networking Genomics MANAGEMENT Internet DIAGNOSIS Imaging Data Universe DISEASE Health info systems

Digital Health Innovation Trends Policies and Regulations Patient-Generated Mobile Health = Healthcare Drive & Threaten Innovation Data Comes of Age Blockchain Health Empathetic Health Ecosystem Driversifies Interfaces Mature

Digital Health Digital Health is still picking up steam Source: CBINSIGHTS, Healthcare consumerization

Digital Health Global Funding Trend • On a quarterly basis, funding saw a 100% increase from $1.2B in Q4’16 to $2.4B in Q1’17. Deal flow, which picked up at the end of 2016, fell slightly in Q1’17, landing at 255. • In general, deals to digital health startups trended up through Q1’16. However, the sector has been on rocky footing lately with Q2’16 and Q3’16 seeing big drops in deal flow. In Q4 deals pushed back up, then declined again slightly in Q1’17. Source: CBINSIGHTS, Digital Health Funding Reaches Record Level

Digital Health The rate of chronic disease is increasing in China In 2016, Top 10 reasons causing Highest YLLs* in China: In 2016, three types of diseases causing the 1. Stroke Population maximum number of deaths 2. Ischemic heart disease Aging Intensity are: 3. Road traffic injury 1. Cardiovascular and 4. Lung cancer cerebrovascular diseases 5. COPD - 17.6 million 6. Liver cancer 2. Tumor - 8.93 million 7. Gastric cancer 3. Chronic respiratory 8. Alzheimer's disease disease – 3.54 million 9. Suicide 10. Esophageal cancer Environment Pollution *YLL: Years of life lost (percentage of total) Source: Global Burden of Disease Study 2016, GBD

Digital Health Policies promote the reform of medical health industry From 2016 to 2017, China issued 23 policies covering medical insurance, medical services, medical equipment, medicine and health care products. Most policies are about the field of medicine, the intensity of reform is huge. Encourage R&D, reduce costs, simplify approval procedure, Medicine open e-commerce platform. Realize de-administration of public hospitals, establish a modern management system, Medical Services reduce overall service costs. Change from license to record, standardize examination method, establish priority Medical Equipment approval system. Integrate the basic insurance system of urban and rural Medical Insurance residents, adjust the catalogue of insurance drugs. Standardize the registration process and strengthen the Supplements review of production license. Source: Qingke Research Institute, China Medical health industry’s investment report

Digital Health Health awareness is enhanced In 2017, Chinese families' awareness of health went through three great changes. 01 02 03 The awareness of Healthy life The idea of proactive The awareness of family health was enhanced prevention was deeply management was improved rooted in mind The survey found that, The survey found that, when The survey found that, 93% of respondents expressed a need for asked which factor is more respondents believe that everyone is health management services, important to health, 93% of one part of family, each family 81.8% of respondents wanted to get respondents chose "positive member's health behavior will health intervention services that health management plan", while interact with each other. Therefore, could improve their unhealthy only 6.8% of respondents chose health management should take lifestyles and habits, and 76.4% of "more advanced medical family as a unit. respondents wanted to get health technology, equipment and science information. treatment plan". Source: Chinese family health data report (2017)

Digital Health China Health Industry’s Market Size

Digital Health China Digital Health Funding Trend 721 689 239,497 204,537 366 324 The main reason for the 105,295 increase of financing scale is capital market's favor for the traditional medical service 136 115 38,904 and medical equipment. 80 64 13,275 6,714 3,771 4,904 The number of investment Unit: Million Source: Vcbeat, Medical Health Industry Financing Report, 2017 Q3

Digital Health Artificial Intelligence, Precision Medical Treatment, POCT, Non-public Health Care are the key words of industry financing in the first half of 2017 Precision medical treatment includes molecular diagnosis, targeted therapy, and so on *TCM: Traditional Chinese Medicine; CSO: Contract Sales Organization; CRO: Contract Research Organization; CMO: Contract Manufacturing Organization; POCT: Point of Care Treatment; PCR: Polymerase Chain Reaction; GCLE: a chemical raw material. Source: FIRESTONE, Health Industry Financing Report – 2017,H1

The Average Deal Digital Health Subdivisions Size (10000 RMB) Medical Equipment Sales 25,730 Community-oriented Primary 18.631 Care Medicine 18,079 Medical Finance 16,571 Biotechnology 14,857 Medical Informatization 10,770 Consumptive Medical 9,671 Treatment Circulation Channel 7,000 Medical Tools 6,971 Medical Science And 5,650 Technology Seek Medical Advice 4,825 gy Care Rehabilitation Nursing 4,285 Medicine Big Health Biotechnolo Treatment Technology Medical Tools Medical Support Big Health 4,147 Medical Finance Medical Equipment Circulation Channel Maternal Pregnancy Seek Medical Advice Medical Science And Consumptive Medical Medical Equipment 3,700 Rehabilitation Nursing Medical Informatization Medical Equipment Sales Medical Support Community-oriented Primary Source: Vcbeat, 2017 Medical Health Industry investment report Maternal Pregnancy 2,272

Digital Health Investment and financing in subdivision areas

Digital Health Startupbootcamp Alumni - Biosensorix Biosensorix Point of care and quantitative diagnostics tool

Digital Health Notable Chinese Startup – We Doctor We Doctor Online platform connecting connecting patients and doctors together

Agri-Food Tech

Agri-Food Tech The Age of Agri-Food Revolution Beyond 2030, the negative impacts of climate change on agricultural yields will become increasingly severe in all regions.

Agri-Food Tech China’s urgent need for agriculture innovation A fifth of the world’s population Only 5% to 7% of world’s arable land Resource Scarcity and Population Growth have pushed agricultural innovation to the top of China’s agenda.

Agri-Food Tech China’s Food Safety Issue consider food safety when buying food 86% give top consideration to food safety when buying food 52% are against food additives 88% Food Scandals Melamine Milk scandal ‘Aluminium’ dumplings ‘Sewer’ oil ‘Cadmium’ rice Glow-in-the-dark pork Note: Consumers investigated are mainly from 1st & 2nd-tier cities Source: Ipsos, Trends in Food, Beverage & Consumer Insights in China 2016

Agri-Food Tech Chinese Customer consumption habits are changing The urbanization and rapid growth of As the standard of living and disposable income rise the Chinese middle class are consumers are looking for natural, organic, significantly changing the consumption and imported foods most representative of habits of Chinese consumers. healthy foods in China (Euromonitor, 2016). No Artificial Additives Organic Ingredients Low Calorie Slimming Effect

Agri-Food Tech China’s huge potential for food consumption The change of urban residents' family population and disposable income Average family population of Urban Households Per capita disposable income of urban residents(RMB) Source: National Statistics Bureau ,Guoxin Securities Economic Research Institute

Agri-Food Tech What is Agri-Food Tech? Agri-food tech is aiming to improve or disrupt the global food and agriculture industry. it includes a wide range of processes, operations, and roles as food travels from the farm to the fork.

Agri-Food Tech Key Agri-Food Tech Enablers BIG DATA INTERNET PAYMENTS MOBILE WEARABLES IOT ECOMMERCE DRONES AI 3D PRINTERS BIO-TECH ROBOTS New generations of increasingly low cost technology hardware and software are challenging and disrupting the traditional models of producing, packaging, marketing, selling, delivering, securing, tracking, eating, recycling and even introducing new types of food substitutes.

Agri-Food Tech AgriFood Tech Category Definitions Source: AgFunder, AgriFood Tech Investing Report - MidYear 2017

Agri-Food Tech Global Funding Trend Source: AgFunder, AgriFood Tech Investing Report - MidYear 2017

Agri-Food Tech China provide administration support for agricultural innovation Government "Thirteen five" special plan for agriculture and rural science and technology innovation Policy By 2020, the contribution rate of agricultural innovation is over 60%, the ability of agricultural technology Target 01 innovation is in the forefront of the world. • Significantly improve agricultural technology innovation level. • Significantly improve agricultural comprehensive and industrial competitiveness. • Significantly improve innovative platform and talent team. • Significantly improve efficiency of agricultural science and technology innovation system. • The agricultural and rural innovation and entrepreneurship ecology being more optimized.

Agri-Food Tech China provide administration support for agricultural innovation Across the country, 260 national agriculture and Industry science technology parks are built to serve as Parks part-technology showcase, part R&D pilot farms. Projects run the gamut from plant and animal breeding programs to 02 precision agriculture and water-efficient farming. Top agricultural universities allocate subsidies and University working space for student and alumni startup teams. Innovation Cyb-Bot, a robotics and automation company received investment from a China Agricultural University Fund. 03

Agri-Food Tech China’s Agricultural Investment Trend China's Agricultural Fixed assets investment (excluding farmers) and its growth rate, 2012 - 2016 Unit: Billion RMB Unit: ％ The number of investment The amount of investment 31％ 30％ 28％ The growth rate of investment number 153％ 29％ 19％ The growth rate of investment amount 152％ 22,774 63％ 9％ -9％ 19,062 59％ 272 -31％ -25％ 14,574 189 11,401 183.81 167,74 8,772 108 91 72.72 68 44.48 40.97 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 The amount of investment Growth rate In 2016, the number of investment was 189, and the In 2016, Agricultural fixed investment in China (excluding amount of investment was RMB 16.774 billion. farmers) was RMB 2277.4 billion , up 19% from 2016. Source: Pintu Think Tank, 2017 China Agricultural Internet Research Report

Agri-Food Tech China’s Agricultural Investment Trend 0.58 Support Service Support Service After Series D Whole Industry Whole Industry Chain Series Chain After Series C/C+ D Series B/B+ Agricultural Products Sales Series C/C+ Series B/B+ Series A/A+ Agricultural Products Series Sales A/A+ Agricultural Products Logistics Pre-A Pre-A Agricultural Products Processing Agricultural Products Logistics Angel Round Agricultural Products Agricultural Products Processing Angel Round Production Agricultural Products Production Agricultural Materials Supply Seed Agricultural Seed Materials Supply 2016 2015 2017H1 2016 2015 2017H1 Invest more in early rounds. In 2016, investment in series A/A+ accounted for In 2016, the top 3 investment areas are Agricultural Products Sales(43%), 29.6%, in Pre-A accounted for 5.8%, in angel round accounted for 24.3%, in seed Agricultural Products Logistics(20%) Agricultural Products Processing(11%), in round accounted for 6.9%. In the first half of 2017, investment in earlier rounds the first half of 2017, the proportion of investment in agricultural products before A/A+ round accounted for over 60%, but the proportion decreased processing and logistics increased significantly. significantly, the proportion of investment in series B/B+ or later rounds is rising. Source：IT Juzi, ChinaVenture, CYZone, Pintu Think Tank

Agri-Food Tech The analysis of china agricultural industry chain Capital Agricultural Products Agricultural Product Agricultural Products Sales Agricultural Materials Supply Agricultural Products Processing Logistics Production Agricultural Materials Comprehensive Grain And Oil Crop Planting Agricultural Bulk Products Production E-commerce The agricultural E-commerce industry chain is Fresh Food E-commerc relatively complex, e Milk Drink Traditional Agricultural Animal Breeding Supermarket involving many Products Wholesale Chain Consumers segments, mainly Fresh Food Agricultural Materials Chain Seafood And Aquatic Products related to Chain agricultural Fishery Production B2B Fresh Raw Food chain Materials Wholesale materials supply, Animal Products agricultural Convenienc e Store products Storage And Logistics Of Forestry Production production, New Retail Agricultural Materials Agricultural Products Other E-commerce processing, logistics Restauran and sales. Besides t that, it also contains supporting services. Agricultural Products’ Whole Industrial Chain Support Service Agricultural Technical Service Agricultural Financial Service Agricultural Information Service Agricultural Information Service Source: Pintu Think Tank, 2017 China Agricultural Internet Research Report

Agri-Food Tech China Agriculture will develop in 4 core directions in the future In the future, with further integration of Internet and the whole agricultural industrial chain, the innovation mode emerge constantly. The main directions include logistics commercialization, services diversification, production intelligentization and industrial ecologicalization. Logistics Services Smart Agricultural Industrial Ecological Commercialization Diversification Production System Agricultural Materials Financial Service IoT(internet Of Things) Agriculture + Leisure Tourism E-commerce Training Services Big Data Agriculture + Real Estate Platform E-commerce System Service Ai(artificial Intelligence) Agriculture + Pension Vertical E-commerce Information Service Agricultural Technology Agriculture + Health O2O E-commerce Data Service Services Agriculture + Environmental Direct Supply From Origins Marketing Service Drone Protection Offline Brand Talent Service Intelligent Tracing Agriculture + Cultural Creativity Material Distribution Source: Pintu Think Tank, 2017 China Agricultural Internet Research Report

Agri-Food Tech Startupbootcamp Alumni - Eskesso Eskesso Smart sous vide cooking appliance and cloud platform Step 1: Put your Eskesso Step 2: Add a pack of in any pot of water food to the mix Step 3: Select the recipe you are cooking and push START in our App

Agri-Food Tech Notable Chinese Startup – ele.me Ele.me Online platform to order take-out

Smart Manufacturing

Smart Manufacturing What is Smart Manufacturing? Smart Manufacturing are systems that are “fully-integrated, collaborative manufacturing systems that respond in real time to meet changing demands and conditions in the factory, in the supply network, and in customer needs.” ——The National Institute of Standards and Technology (NIST)

Smart Manufacturing Smart Manufacturing’s Features Fast integration and People as key players Distributed intelligence flexible configuration Virtual real-time Digital life-cycle Secure value-creation Open standards representation management networks

Smart Manufacturing Key Smart Manufacturing Tech Enablers IoT AR 3D Printing / (Internet of Things) (Augmented Reality) Additive Manufacturing Advanced AI and Machine Robotics Learning Advanced Predictive Materials Analytics

Smart Manufacturing Smart Manufacturing’s Digital Dividend Boost Manufacturers’ Promote Business Spur Industrial Jobs’ Profit Model Innovation Revolution Some dangerous, mundane jobs that humans Smart manufacturers boost profits The digital transformation of formerly performed are indeed being conducted through improved quality, faster industry will serve as a basis for by robots now. throughput, less maintenance and new business models that can pay downtime, reduced material waste big dividends in terms of quality A shift to smart manufacturing makes companies and faster decision-making. and documentation. more competitive and increases revenues. Higher profits give companies more capital to finance improvements and expansions, which require The smart processes also enhance Digital technologies can help to hiring more workers. worker safety, reducing insurance make possible completely new and medical costs. value creation networks that As more manufacturers embrace high-tech extend beyond company solutions, workers with expertise in fields such as boundaries. electronics, engineering and IT (including cybersecurity) are needed.

Smart Manufacturing Benefits of Smart Manufacturing Benefits to stakeholders in a value chain Affordable access to new Technology & innovation. Better user app Better user experience. development & A more informed & Pilot new technologies for feedback. Fluid value chain larger manufacturers. Increased confidence & path. personal satisfaction. Less nitty-gritty Increased productivity integration. via sensors. Software Vendors & Manufacturers Customers Suppliers 3rd-Party Integrators

Smart Manufacturing Manufacturing + Technology is taking in 2017 Source: CBINSIGHTS, Advanced manufacturing trends

Smart Manufacturing Global Funding Trend Deals are making a come back While 2016 saw a tightening throughout all of venture capital, deal making has rebounded in Q1'17. Source: CBINSIGHTS, Advanced manufacturing trends

Smart Manufacturing Smart Manufacturing is inevitable for industrial countries to realize Manufacturing Upgrade. Germany Industry 4.0 EU Japan: New Industrial US Factories of the Revolution Driven by Robots Re-industrializatio Future n Strategy India Make in India Campaign

Smart Manufacturing China’s Manufacturing Upgrade Challenges for China’s Manufacturing Industry 01 02 03 Damage to environment Depletion of natural Rapid increase in resources production costs 04 05 06 Shrinkage in export Competition from other Lack of innovative products markets low wage countries and key manufacturing know-hows and technologies China needs to upgrade its manufacturing industry and move to higher value-added manufacturing.

Smart Manufacturing Support for Smart Manufacturing C T Capital Talent • “Made in China 2025” Special Fund. • Encourage enterprises to build smart manufacturing training bases, cultivating skillful technicians. • Collaborate with various financial institutions to provide comprehensive financial services, including loans, investment, bonds and leases, for key • Support universities to set up systems for cultivating smart projects of "Made in China 2025". manufacturing talents. • Attract smart manufacturing talents into China. I T Infrastructure Technology • Build Smart Manufacturing Innovation Centers, developing key • Develop equipment, construct test verification system and technology research. identification system based on industrial network. • Encourage enterprises, universities and scientific research • Promote “smart manufacturing” integrate with “Internet Plus”, establish institutions collaborate with each other to set up innovation alliance. information infrastructure made for industrial production.

Smart Manufacturing China’s Smart Manufacturing Market Size In 2016, China's smart manufacturing industry output value reached 1.2 trillion RMB. Since 2011, the average annual growth rate in the past 5 years is more than 20%, far higher than the growth rate of GDP. Smart manufacturing industry is developing at a high speed, the industry output value is estimated to reach 3 trillion RMB by 2020. Source: Qianzhan Research Academy, The analysis on development and market size of China Smart Manufacturing Industry in 2017

Smart Manufacturing Startupbootcamp Alumni - ThingTrax ThingTrax Connect your machines, motors, tools and labor in minutes

Smart Manufacturing Notable Chinese Startup- HuaZhi HuaZhi A globalized smart manufacturing solution provider and system integrator Top-Level System Intelligent Design Integration Factory

Clean Tech

Clean Tech About Clean Tech. A diverse range of products, services, and processes that harness renewable materials and energy sources, dramatically reduce the use of natural resources, and cut or eliminate emissions and wastes. ——Clean Edge, a clean technology research firm

Clean Tech Driving Forces for Clean Technology Environmental issues, Global investment in the Technological Many government Clean tech technologies including global climate energy sector fell 12 advances including leaders have recognized like AI and IoT will gain change, deforestation, air percent last year to $1.7 continued innovations that future global manufacturing pollution, and inadequate trillion, A drop in in microelectronics, competitiveness is conventional oil supplies of clean water, economies of scale from biology, chemistry, and directly linked to being exploration could cause a have stepped up pressure other industries like physics, have more resource-efficient shortage of crude and to find more automobiles and other fuels. significantly improved and less reliant on Older, environmentally benign robotics. Clean tech the performance of polluting technologies. Ways to meet the needs of • Australia: Coal Shortage prices are falling due to many Clean a growing world. The • America: Electricity technologies. manufacturing concern over climate Shortage economies of scale. • China: Gas Shortage change in particular has • Pakistan: Electricity led to new focus in Shortage alternative transportation and energy technologies. Political Manufacturing Energy Technologies Environment Winds Economics Of Scale Uncertainty Advances Issues

Clean Tech Revived Interest In Renewables Source: CBINSIGHTS, Renewable energy & the rise of solar

Clean Tech Countries with clean energy policies implemented

Clean Tech Global funding trend After years of growth, VC investment in cleantech companies has been on the decline

Clean Tech Source: CBINSIGHTS, Renewable Planet: Energy Deals Outside The United States

Clean Tech China’s Green Growth th 13 FYP encourage clean energy production and consumption. Targets for energy intensity, renewable energy share , and carbon intensity have been further tightened. Energy consumption Share of non-fossil in primary Carbon emissions per unit per unit of GDP energy consumption of GDP Source: PwC, Chinese Cleantech Market Opportunities, 2017

Clean Tech Environmental Protection Policies Air Pollution Prevention and Control Action Plan, Sept 2013 "By 2017, PM10 in cities at prefecture level and above must fall by 10% from 2012 levels; PM 2.5 in Beijing- Tianjin-Hebei, Yangtze River delta, and Pearl River delta must fall by 25%, 20% and 15% respectively " Water Pollution Prevention and Control Action Plan, April 2015 "By 2020, water quality in seven key areas must reach national standard Level III; black and odorous water to be reduced to less than 10%; and drinking water should reach Level III" Soil Pollution Prevention and Control Action Plan, June 2016 "By 2020, the safe utilization rate of contaminated arable land should reach about 90%, while the safe utilization rate of the polluted plots should exceed 90%. By 2030, the safe utilization rates of contaminated arable land and polluted plots should both exceed 95% respectively"

Clean Tech China Cleantech Investment Trend Government investment and total investment in environmental prevention (including renewable energy) By 2016, China's green investment had reached RMB 1.85 trillion (approx. USD 269 billion), which constitutes 2.5% of the GDP. It is estimated that the cleantech sector will reach RMB 17 trillion (approx. USD 2.47 trillion) by 2020, with an increase of RMB 2 trillion (approx. USD 290 billion) each year.

Clean Tech China funding trend Investment in China's Clean Tech Industry from 2014 to 2017 Q3 TM Source: PwC, MoneyTree China Clean Energy and Technology Industry investment report

Clean Tech China funding trend TM Source: PwC, MoneyTree China Clean Energy and Technology Industry investment report

Clean Tech China Cleantech Market Potential First Tier subsectors: Waste management and recycling, water, and air pollution controls account for 70% of the total investment. Second Tier Subsectors: Environmental monitoring and energy efficiency sectors account for about 20% of the Investment. Note: 1. Investment data from 2013.1-2016.7; 2.Only deals with disclosed company names are take into account; 3.Investee companies involved in several subsectors are calculated multiple times in different categories. Source: PwC, Chinese Cleantech Market Opportunities, 2017

Clean Tech China Cleantech Trends Solar Energy 1 Solar Energy’s installed capacity ranked the first globally; China would witness the rapid development of the distributed photovoltaic; and the photovoltaic manufacturing industrial chain is likely to be consummated gradually. Wind Energy 2 Wind power's global installed capacity has been increasing steadily, the energy pattern has been optimized with the respective development in the power restricted area and non-restricted area. New Energy Vehicles 3 The industry is standing at the inflection point with the deep integration of the vehicle market. Solid Waste Treatment and Disposal 4 The government is increasingly carrying out positive policies to support the industrial development, hence the solid waste treatment and disposal is stepping into the golden age. New Science and Technology of Energy 5 Conservation and Environment Protection Building energy conservation developed fast, near-zero energy buildings are ushering in many favorable policies. Besides that, Energy-saving household appliances have become a major trend in the home appliances development. Water Treatment 6 The water treatment industry remains prosperous, and the water treatment system will be continuously improved and perfected.

Clean Tech Startupbootcamp Alumni - Tespack Tespack Charge your mobile devices directly from sun

Clean Tech Notable Chinese Startup - NIO NIO High performance intelligent electric SUV (7 pedestal) Raised $1700 million in 2017

Ed Tech

Ed Tech The Existing Problems with Education 01 02 04 03 Unprepared Students Isolated Schools Anxious Parents Stressed Teachers Nowadays, students In order to give Teachers face constant Schools and their pupils are graduate from these children the greatest pressure from both often far removed from real institutions with deep chance of success in parents and school social issues; and schools confusion about the the future, there is administrations in a are very much closed off ‘in future and their more anxiety than unitary evaluation silos’, preventing them from direction in life. ever among parents. system. effectively connecting with social resources. The big disconnect is happening in education area, as the world becomes more connected at a global level.

Ed Tech Digital will soon be the nucleus of Students are born with digital DNA every industry Only 10 percent of schools offer any kind of computer Education institutions need to cater to the digital science class. If we don’t start at school-level exposing demand of their consumers — people who are learners to technology existing outside the classroom, constantly exposed to digital technologies outside of the skills gap will soon be a valley that cannot be the classroom have come to expect the same digital bridged. capabilities within the four walls of a learning environment. Ed Tech is poised to be the biggest and possibly most profitable digitalized sector

Ed Tech Ed Tech(Educational technology) is "the study and ethical practice of facilitating learning and improving performance by creating, using, and managing appropriate technological processes and resources". What is Ed Tech?

Ed Tech Global Funding Trend Quarterly deals to Ed tech startups increased throughout 2012, but have fluctuated since then. Deal count peaked in Q1’15 with 148, but fell below 130 at the end of 2015. Q1’17 is the first time since Q3’15 that deals to Ed tech startups broke 130. Source: CBINSIGHTS, High Marks: Ed Tech Deals Tick Up In Q1’17

Ed Tech Startup Landscape Landscape 2.0 maps 5000 companies into eight steps we call the next generation learning lifecycle. CREATE MANAGE DISCOVER CONNECT EXPERIENCE LEARN CREDENTIAL ADVANCE 573 companies 617companies 362 companies 803 companies 622 companies 1384 companies 266 companies 523 companies $4.8b invested $6.3b invested $7.0b invested $2.3b invested $5.6b invested $10.4b invested $2.1b invested $4.2b invested Publishers Ed Management Tech Student Financing Learning Management VR/AR Personalised Learning Testing & Assessment Hiring Digital Courseware Student Management Enrolments & Systems Robotics Proprietary Campus & Badging & Credentialing Internships Research & Scientific Systems Admissions Social Platforms Games & Simulation Online Faculty Artificial Intelligence Early Childhood Open Online Administration Language LEARNING DESIGN STUDENT LIFECYCLE AND MANAGEMENT Source: NAVITAS Ventures

Ed Tech Asia Market Size There are The average Asian family spends 600,000,000 K12* students in Asia 10x that of the United States >40% of their income on education related HUGE By 2020, China’s college-educated products and services talent pool is expected to number MARKET SIZE 195,000,000people There are 300,000,000 people learning English in China more than the entire US labor force that year more than the entire English speaking population of the United states *K12 : Kindergarden to 12th Grade

Ed Tech China Education Industry China's education industry is ushering into its “ Golden Age with expansion in terms of both industry size and market activity. Source: Deloitte Education Industry Report 2017

Ed Tech Future Major Growth Points Personal training grows because of better economic capability and higher willingness to improve competitiveness. Early childhood education is driven by 2 the implementation of two-child Vocational Training policy which brings sufficient demand and the government's policies to encourage preschool education. K12* Training 3 The growth of K12 extra-curricular training Early Childhood Education is attributed to the demand increase resulted from the pick-up of the school age population. Meanwhile, desire for further education and international education also 1 drives the demand for K12 examination- oriented education and language education. 126 Source: Deloitte Education Industry Report 2017 *K12 : Kindergartden to 12th Grade

Ed Tech Contributors to Ed Tech Golden Age – Favorable Policies Accelerated amendment of private education related laws and supporting policies. In terms of different education stages, relevant policies have outlined the future trends of each sector. Vocational education, benefited from the relevant development planning and the Belt and Road Initiative will see development trends of "running school by means of 4 collectivization", "investment of private Preschool education will see capital in education", and "going global" in positive development under the the future. guidance of policies including Higher Academic the proposals for China's 13th 2 Education Five-Year Plan which proposes the target to realize inclusive Vocational Training Higher academic education preschool education in 2020. is focusing on "boosting employment" and K12 Education "standardizing independent 3 colleges“. Preschool Education Key points of K12 educational informationization are accelerating informationization, and admission policies at the compulsory education 1 stage have created a favorable condition for fair distribution of high-quality resources. Source: Deloitte Education Industry Report 2017

Ed Tech Contributors to Ed Tech Golden Age – Capital Inflow There has been a rapid increase of social capital flowing into the education industry both in terms of total amount and frequency. Investment Cases Total Investment Amount 270 > twice 190 42% RMB15.9 billion RMB 6.1 billion 2014 2015 2014 2015 Source: Deloitte Education Industry Report 2017

Ed Tech Contributors to Ed Tech Golden Age – Capital Inflow Internet companies represented by BAT, large real estate companies, and non-educational listed companies are venturing into education. Internet companies represented by Real estate companies are BAT, are searching for segments of developing educational in-depth development to improve the related real estate. depth of their ecosystem. Source: Deloitte Education Industry Report 2017

Ed Tech Contributors to Ed Tech Golden Age – Exit Opportunities IPOs increased by 76 percent from a year earlier. More capital is expected to flow into the M&A industry under easy policies. The total amount of mergers and acquisitions (M&As) increased by 165 IPO percent year on year. Source: Deloitte Education Industry Report 2017

Ed Tech China Ed Tech Funding Trend Source: GETChina Insights, Digging into China EdTech 2017Q1

Ed Tech Educational Industry Fundraising Status Information-driven Education K12 International Early Career Quality Higher Other Education Comprehensive Education Education Education Education Education Service K12 • Among Educational Industry, capital is mainly Career Education focus on K12, International Education, Early Education, Career Education. Early Education • In 2016, the fundraising is went through a cold Quality Education winter, but career education fundraising is increasing. International Education Information-driven Education • In 2017, quality education fundraising events accounted for 18%, obviously higher than previous Education Comprehensive Service years. Higher Education Note: the data is from 2015 to April, 2017 Source: IT Juzi & Taoli Capital Other

Ed Tech China Ed Tech Industry Landscape K12 Career Education Early Childhood Education Higher Education 婷婷姐姐 International Education Quality Education Education Education Comprehensive Informationization Service

Ed Tech Startupbootcamp Alumni - BrainCo Focus EDU Focus EDU is the world's first integrated classroom system that improves education outcomes through real-time attention level reports.

Ed Tech Notable Chinese Startup - Vipkid Vipkid Online children's english education platform High Quality Teachers From Effectively Schedule Classes An Immersive Learning Experience North America Check Classroom Scene United States Common Core State High Quality Service From At Any Time Curriculum Standard (CCSS) Chinese Teachers

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