China’s Venture Capital Shows Strong Rebound

Chinese venture capital fundraising rose to US$3.06 billion across 13 funds during the second quarter, the highest quarterly number since the fourth quarter 2011, according to the latest data released by Dow Jones VentureSource.

Venture capital fundraising for the first half of 2014 stood at US$4.27 billion across 19 venture capital funds, over three times the amount recorded during the first half of last year.

IDG Capital Partners’ China Venture Capital IV fund was the largest fund raised during the second quarter, collecting US$586 million.

Investment into Chinese venture-backed companies continued to improve in the second quarter as well, as companies raised US$2.8 billion from 121 deals, a 13% increase in the number of deals and a 19% improvement in capital invested from the previous quarter.

Investment for the first half of 2014 dwarfs that of the equivalent in 2013, with US$5.1 billion invested compared with a little over US$2 billion invested last year. Similarly, deal flow has also risen, from 151 to 228, representing a 51% increase.

As for exits, 11 venture-backed companies went public during the second quarter, 16 fewer than in the first quarter, but still considerably more than the two listings completed during the second quarter of 2013.

Despite the decline in IPOs for the quarter, a total of US$2.75 billion exits were realized through IPOs, an increase of 34% over the previous quarter and the highest quarterly figure since the third quarter 2011.

A total of US$4.8 billion have been realized for Chinese venture-backed IPOs during the first half of this year, the most since the first six months of 2011 when US$9.3 billion were raised. Inc. had the largest IPO of the quarter, raising US$1.3 billion for its May listing on the NASDAQ.

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