VC firms receive less investment in Q1
Print Edition
VENTURE capital-backed firms in China continued to receive less investment in the first quarter of this year amid an economic slowdown and cautious investors, a report said.
Investments in the VC-backed companies in China in the first three months of 2016 slumped 45 percent from the previous quarter to US$4 billion, according to Venture Pulse, the quarterly global report on VC trends released yesterday jointly by KPMG International and CB Insights. The slump followed a 29 percent drop in the fourth quarter of 2015.
Investments fell because of a dearth of mega-deals as only one transaction valued at more than US$1 billion was completed last quarter, unlike the heady days of past quarters that saw multiple mega-deals, the report said.
Other factors such as China’s economic slowdown, rising interest rates and the coming US presidential election were driving VC investors globally to be more cautious, it said.
Meanwhile, Chinese VC investors were increasingly looking to overseas markets for investment opportunities. In the first quarter, international VC investors took up 27 percent of investment in US-based companies. China-based VC funds came second after those from the UK.
“Chinese VCs are starting to go out and invest overseas,” said Irene Chu, head of KPMG High Growth Technology & Innovation Group in Hong Kong.
“There has been a much stronger push from the central government for Chinese investors, especially large corporate investors, to look internationally for opportunities.”
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