Welcome!

News Feed Item

China Venture Capital Investment Continues Decline In Fourth Quarter

China stays ahead of the U.K. in investment, but drops behind in deal flow

HONG KONG, Feb. 24, 2013 /PRNewswire/ -- Venture capital investment in mainland China experienced a decline during the fourth quarter, with companies raising $854 million, a drop of 42% from the same period a year ago, according to Dow Jones VentureSource.  The number of deals completed over the three month period also fell, by 52% to 39 in total.

Overall in 2012, investment declined by 40% from 2011 levels to $3.7 billion, with the number of deals falling by 44% to 202. China stayed ahead of the U.K. in terms of investment, where companies raised €1.4 billion, but not in deal flow, as the U.K. completed 295 deals. Europe as a whole collected €4.4 billion in 1074 deals. The U.S. raised $29.7 billion for 3,363 deals.

So far, 2011 has been the highest year on record for investment in mainland China, with US$6.2 billion deployed across 362 deals over that 12-month period.

Commenting on the decline, Guido Schenk, Asia Pacific sales director for Dow Jones VentureSource, said, "Although the decline of VC investments during 2012 follows similar trends to those recorded in 2008, the key difference was that last year the share of profitable companies to receive VC funding was much smaller than it was five years ago.  Given that companies need to be profitable prior to IPO in China, it is unlikely that 2012 VC investments will lead to the same boom of IPOs that we witnessed between 2009 and 2011."

In addition, IPOs as a main exit route for Chinese VC investments showed a sharp decline in the fourth quarter, where only three IPOs were recorded; a fifth of the number recorded in the same period a year earlier.  From these, only $167 million was raised, the lowest number in China since 2009, and just 10% of the amount raised in the fourth quarter of 2011.

Continuing Investment Declines for Most Industry Groups

Investment in Consumer Services, the leading industry for venture capital in China, declined by 35% to $591 million during the fourth quarter of 2012. Deal flow declined by 59% to 17 deals completed.

Despite receiving 55% of all venture capital invested in China during 2012, overall Consumer Services investment and deal flow declined by 42% and 44% respectively from 2011, with $2 billion collected in 96 deals.

Information Technology (IT) managed to secure the second largest allocation, despite a 46% decline in investment and a 39% drop in the number of completed deals year-over-year. The industry collected $536 million for 43 deals. This decline was due largely to a weak fourth quarter in which investment amounted to $34 million for 6 deals, a respective 83% and 63% drop from the same quarter a year earlier.

Financial Services Rounds Out a Strong Year

Investment in Business and Financial Services companies defied the downturn during the year with the industry collecting $458 million, a 2% uptick from 2011. Deal activity fell, however, by 41% to 27 completed. The uptick in investment was a result of a strong year for the Financial Institutions and Services sector, in which seven venture capital deals amassed $203 million.

Investment in the Healthcare industry fell in 2012, with 11 deals collecting $179 million, a respective drop of 15% and 45% from 2011 figures. Biopharmaceuticals, the dominant industry segment, experienced a drop of 68% in capital invested and 29% in deals completed, with companies raising $85 million in a total of five deals. In contrast, Medical Devices and Equipment companies managed to garner $70 million for four venture capital deals, doubling the equivalent figures for 2011.

Energy and Utility companies also experienced substantial drops in venture capital invested during 2012. The industry collected $58 million, a decrease of 48% from 2011. Deal flow halved from eight in 2011 to four completed for 2012.

For information on Dow Jones VentureSource's research methodology, visit http://bit.ly/VSFAQs.  For general information about Dow Jones VentureSource, visit http://www.dowjones.com/pr/privatemarkets

SOURCE Dow Jones VentureSource

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Cloud-based NCLC (No-code/low code) application builder platforms empower everyone in the organization to quickly build applications and executable processes that broaden access, deepen collaboration, and enhance transparency for all team members. Line of business owners (LOBO) and operations managers know best their part of the business and their processes. IT departments are beginning to leverage NCLC platforms to empower and enable LOBOs to lead the innovation, transform the organization, an...
As enterprises around the world struggle with their digital transformation efforts, many are finding that innovative digital teams are moving much faster than their hidebound IT organizations. Rather than struggling to convince traditional IT to get with the digital program, executives are taking advice from IT research firm Gartner, and encouraging existing IT to continue in their desultory ways. However, many CIOs are realizing the dangers of following Gartner’s advice. The central challenge ...
Unless you don’t use the internet, don’t live in California, or haven’t been paying attention to the recent news… you should be aware that self-driving cars are on their way to becoming a reality. I have seen them – they are real. If you believe in the future reality of self-driving cars, then continue reading on. If you don’t believe in the future possibilities, then I am not sure what to do to convince you other than discuss the very real changes that will roll out with the consumer producti...
Cloud Object Storage is effectively infinitely scalable and boasts the lowest total costs. But cloud SLAs and T&Cs are traditionally optimized for huge customers like Netflix, so applications demanding better confidentiality or higher availability typically can’t reap the benefits of public cloud storage. In his session at 18th Cloud Expo, Don Martin, CTO of Security First Corp, will provide an overview of innovative technologies available today – secret sharing and information dispersal algori...
There is an ever-growing explosion of new devices that are connected to the Internet using “cloud” solutions. This rapid growth is creating a massive new demand for efficient access to data. And it’s not just about connecting to that data anymore. This new demand is bringing new issues and challenges and it is important for companies to scale for the coming growth. And with that scaling comes the need for greater security, gathering and data analysis, storage, connectivity and, of course, the...
The IETF draft standard for M2M certificates is a security solution specifically designed for the demanding needs of IoT/M2M applications. In his session at @ThingsExpo, Brian Romansky, VP of Strategic Technology at TrustPoint Innovation, will explain how M2M certificates can efficiently enable confidentiality, integrity, and authenticity on highly constrained devices.
In the world of DevOps there are ‘known good practices’ – aka ‘patterns’ – and ‘known bad practices’ – aka ‘anti-patterns.' Many of these patterns and anti-patterns have been developed from real world experience, especially by the early adopters of DevOps theory; but many are more feasible in theory than in practice, especially for more recent entrants to the DevOps scene. In this power panel at @DevOpsSummit at 18th Cloud Expo, moderated by DevOps Conference Chair Andi Mann, panelists will dis...
See storage differently! Storage performance problems have only gotten worse and harder to solve as applications have become largely virtualized and moved to a cloud-based infrastructure. Storage performance in a virtualized environment is not just about IOPS, it is about how well that potential performance is guaranteed to individual VMs for these apps as the number of VMs keep going up real time. In his session at 18th Cloud Expo, Dhiraj Sehgal, in product and marketing at Tintri, will discu...
trust and privacy in their ecosystem. Assurance and protection of device identity, secure data encryption and authentication are the key security challenges organizations are trying to address when integrating IoT devices. This holds true for IoT applications in a wide range of industries, for example, healthcare, consumer devices, and manufacturing. In his session at @ThingsExpo, Lancen LaChance, vice president of product management, IoT solutions at GlobalSign, will teach IoT developers how t...
The pace of innovation, vendor lock-in, production sustainability, cost-effectiveness, and managing risk… In his session at 18th Cloud Expo, Dan Choquette, Founder of RackN, will discuss how CIOs are challenged finding the balance of finding the right tools, technology and operational model that serves the business the best. He will discuss how clouds, open source software and infrastructure solutions have benefits but also drawbacks and how workload and operational portability between vendors...
When it comes to IoT in the enterprise, namely the commercial building and hospitality markets, a benefit not getting the attention it deserves is energy efficiency, and IoT's direct impact on a cleaner, greener environment when installed in smart buildings. Until now clean technology was offered piecemeal and led with point solutions that require significant systems integration to orchestrate and deploy. There didn't exist a 'top down' approach that can manage and monitor the way a Smart Buildi...
So, you bought into the current machine learning craze and went on to collect millions/billions of records from this promising new data source. Now, what do you do with them? Too often, the abundance of data quickly turns into an abundance of problems. How do you extract that "magic essence" from your data without falling into the common pitfalls? In her session at @ThingsExpo, Natalia Ponomareva, Software Engineer at Google, will provide tips on how to be successful in large scale machine lear...
You think you know what’s in your data. But do you? Most organizations are now aware of the business intelligence represented by their data. Data science stands to take this to a level you never thought of – literally. The techniques of data science, when used with the capabilities of Big Data technologies, can make connections you had not yet imagined, helping you discover new insights and ask new questions of your data. In his session at @ThingsExpo, Sarbjit Sarkaria, data science team lead ...
SYS-CON Events announced today that Peak 10, Inc., a national IT infrastructure and cloud services provider, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Peak 10 provides reliable, tailored data center and network services, cloud and managed services. Its solutions are designed to scale and adapt to customers’ changing business needs, enabling them to lower costs, improve performance and focus inter...
Digital payments using wearable devices such as smart watches, fitness trackers, and payment wristbands are an increasing area of focus for industry participants, and consumer acceptance from early trials and deployments has encouraged some of the biggest names in technology and banking to continue their push to drive growth in this nascent market. Wearable payment systems may utilize near field communication (NFC), radio frequency identification (RFID), or quick response (QR) codes and barcodes...