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July 20, 2016

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Funds in VC-backed firms rise in Q2

INVESTMENTS in venture capital-backed companies in China rose slightly in the second quarter but there were fewer deals amid economic concerns and global uncertainties, a joint report said.

Investments in VC-backed companies in China jumped 26 percent to US$5.6 billion between April and June from the previous quarter, said Venture Pulse, a quarterly global report on VC trends released yesterday jointly by KPMG International and CB Insights.

Several mega deals such as in ride-hailing service provider Didi Chuxing and Weiying Technology Co, which offers movie ticket booking, were cited for the increase in investment.

The number of deals fell 20 percent from the first quarter to 74 in the second quarter of this year, the report said.

The value dropped 13 percent year on year, and the number of deals tumbled 33 percent. The decline was in line with the global trend as investors took a wait-and-see stance amid economic concerns and uncertainties.

“While the Brexit referendum in the UK caused many investors to hold back from making significant investments, the upcoming US presidential election, the potential increase in US interest rates, and the economic slowdown in China also added to investor caution,” the report said.

Globally, VC investments gained 3 percent quarterly to US$27.4 billion between April and June, while the number of deals fell 6 percent to 1,886.


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