China equal to EUROPE in Venture Capital Financing

China surpassed the U.K. to become the second-largest recipient of venture capital equity financing in 2011. According to Dow Jones VentureSource, which tracks venture-backed companies, Chinese firms received 332 venture capital equity financing deals in 2011, surpassing the U.K.’s 274. The U.S. retained its lead with 3,209 deals. Each deal represents a single case of equity financing by a professional venture capital firm, corporation, other private equity firm or individual. Deals are an indicator of the emergence of start-up and growth companies in an economy. Venture capital firms are not only placing more bets on China, but bigger bets, as well. In total value, Chinese companies attracted US$6 billion in venture capital equity financing, compared with US$1.7 billion in the U.K. and US$6.1 billion in Europe as a total. The median deal size of a venture capital deal for a Chinese company was US$12.4 million in 2011 – more than four times the median deal size in Europe, at US$2.7 million. The U.S. median deal size for venture capital financing was US$5 million. Chinese companies’ gains in venture capital financing come as their European peers experience a decline. VentureSource data indicates a continuous decline in venture capital financing for European companies.

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