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
"With Digital Experience Monitoring what used to be a simple visit to a web page has exploded into app on phones, data from social media feeds, competitive benchmarking - these are all components that are only available because of some type of digital asset," explained Leo Vasiliou, Director of Web Performance Engineering at Catchpoint Systems, in this SYS-CON.tv interview at DevOps Summit at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
21st International Cloud Expo, taking place October 31 - November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Me...
SYS-CON Events announced today that DXWorldExpo has been named “Global Sponsor” of SYS-CON's 21st International Cloud Expo, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Digital Transformation is the key issue driving the global enterprise IT business. Digital Transformation is most prominent among Global 2000 enterprises and government institutions.
SYS-CON Events announced today that Datera, that offers a radically new data management architecture, has been named "Exhibitor" of SYS-CON's 21st International Cloud Expo ®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Datera is transforming the traditional datacenter model through modern cloud simplicity. The technology industry is at another major inflection point. The rise of mobile, the Internet of Things, data storage and Big...
Kubernetes is an open source system for automating deployment, scaling, and management of containerized applications. Kubernetes was originally built by Google, leveraging years of experience with managing container workloads, and is now a Cloud Native Compute Foundation (CNCF) project. Kubernetes has been widely adopted by the community, supported on all major public and private cloud providers, and is gaining rapid adoption in enterprises. However, Kubernetes may seem intimidating and complex ...
"Outscale was founded in 2010, is based in France, is a strategic partner to Dassault Systémes and has done quite a bit of work with divisions of Dassault," explained Jackie Funk, Digital Marketing exec at Outscale, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"We focus on SAP workloads because they are among the most powerful but somewhat challenging workloads out there to take into public cloud," explained Swen Conrad, CEO of Ocean9, Inc., in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"We are still a relatively small software house and we are focusing on certain industries like FinTech, med tech, energy and utilities. We help our customers with their digital transformation," noted Piotr Stawinski, Founder and CEO of EARP Integration, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"I think DevOps is now a rambunctious teenager – it’s starting to get a mind of its own, wanting to get its own things but it still needs some adult supervision," explained Thomas Hooker, VP of marketing at CollabNet, in this SYS-CON.tv interview at DevOps Summit at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"We've been engaging with a lot of customers including Panasonic, we've been involved with Cisco and now we're working with the U.S. government - the Department of Homeland Security," explained Peter Jung, Chief Product Officer at Pulzze Systems, in this SYS-CON.tv interview at @ThingsExpo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"We're here to tell the world about our cloud-scale infrastructure that we have at Juniper combined with the world-class security that we put into the cloud," explained Lisa Guess, VP of Systems Engineering at Juniper Networks, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
Your homes and cars can be automated and self-serviced. Why can't your storage? From simply asking questions to analyze and troubleshoot your infrastructure, to provisioning storage with snapshots, recovery and replication, your wildest sci-fi dream has come true. In his session at @DevOpsSummit at 20th Cloud Expo, Dan Florea, Director of Product Management at Tintri, provided a ChatOps demo where you can talk to your storage and manage it from anywhere, through Slack and similar services with...
As enterprise cloud becomes the norm, businesses and government programs must address compounded regulatory compliance related to data privacy and information protection. The most recent, Controlled Unclassified Information and the EU’s GDPR have board level implications and companies still struggle with demonstrating due diligence. Developers and DevOps leaders, as part of the pre-planning process and the associated supply chain, could benefit from updating their code libraries and design by in...
"Peak 10 is a hybrid infrastructure provider across the nation. We are in the thick of things when it comes to hybrid IT," explained Michael Fuhrman, Chief Technology Officer at Peak 10, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
SYS-CON Events announced today that Calligo, an innovative cloud service provider offering mid-sized companies the highest levels of data privacy and security, has been named "Bronze Sponsor" of SYS-CON's 21st International Cloud Expo ®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Calligo offers unparalleled application performance guarantees, commercial flexibility and a personalised support service from its globally located cloud plat...