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Venture capital investment up 60 per cent YTD in 2014

A total of USD59bn has been invested in 5,272 venture capital deals globally in 2014 so far, compared to USD37bn invested in 5,940 deals over the same period in 2013, an increase of 60 per cent, according to Preqin.

While activity for the third quarter is below that of Q2 2014, the amount of capital invested is 45 per cent higher than during the same quarter in 2013.
 
A total of 1,664 financings took place in Q3 2014 valued at an aggregate USD19bn. This represents an eight per cent drop in the number of deals compared to the previous quarter, with a 16 per cent decrease in aggregate value.
 
The number of deals in North America is six per cent lower in Q3 2014 compared to Q2 2014, with a 26 per cent fall in aggregate value.
 
There has been a 16 per cent increase in deal flow in India, with 111 financings in Q3 2014 compared to 96 in Q2 2014.
 
More deals took place in the telecoms sector (266) than the healthcare sector (233) in Q3 2014, the first time this has happened in any quarter.
 
The two largest venture capital financing rounds in Q3 2014 were both in Asia – the USD1bn investment in India-based Flipkart and the NZD615m PIPE deal in China-based Beingmate Group Co, Ltd.
 
The average deal value for Series D stage and later deals in Q1-Q3 2014, at USD59m, is 75 per cent larger than the average in 2013 of USD34m.
 
The Alibaba Group’s USD25bn IPO is the largest venture capital exit in Q3 2014, followed by the USD1.7bn trade sale of Seragon Pharmaceuticals Inc. 

 
“Entrepreneurial companies worldwide have received a welcoming boost in 2014, with almost USD60bn invested in young companies throughout the first three quarters of the year – 60 per cent up on the amount invested during the same period last year,” says Christopher Elvin, head of private equity products at Preqin. “Asia in particular has seen a notable surge in activity, with investment levels across India and Greater China increasing significantly over the course of the year. The two largest venture capital deals of the quarter also took place in India and China. While the pace of new investments has slowed in 2014 compared to 2013, all stages of investment, with the exception of growth capital/expansion, have larger average deal sizes in 2014 so far than in 2013.” 

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