In the first quarter of 2010 venture capitalists from around the world invested USD7bn in 919 deals for companies based in the US, Europe, Canada, Israel, mainland China and India, according to Dow Jones VentureSource.
This is a 13 per cent increase over the USD6.2bn invested in 860 deals during same period last year.
"It appears that the rebound in venture capital investment took hold in 2009," says Jessica Canning, global research director for Dow Jones VentureSource. "After bottoming out in the first quarter of 2009, most regions around the world are seeing investment gradually pick up."
Companies based in the US accounted for the majority of deals (65 per cent) and dollars invested (67 per cent) worldwide. During the first quarter of 2010, venture investors put USD4.7bn to work in 597 deals, up 12 per cent from the same period in 2009.
Investment in Canadian companies spiked 81 per cent over the same period last year. In the first quarter of 2010, venture-backed companies in Canada raised USD166m for 21 deals. The information technology and energy and utilities industries accounted for the majority of capital invested, raising USD63m and USD58m respectively.
Europe saw 212 deals garner USD1.1bn (EUR777m) in the first quarter of 2010, down seven per cent from the same period in 2009. This marked the lowest deal count and the second lowest quarterly investment total for Europe since Dow Jones VentureSource began reporting on the region in 2000.
"Coming off the worst year of the decade for European venture investment in 2009, Europe is off to a troubled start in the new decade, tracking below levels seen in 2009," says Arno Castanet, research manager, Dow Jones VentureSource.
In Europe, the IT industry attracted USD273m (EUR190 m), up 15 per cent from the first quarter of 2009. The increase was thanks to the semiconductors segment which saw an 81 per cent increase in investment. Software remained the largest IT segment as it raised USD113m (EUR79m) for in 28 deals.
The healthcare industry raised USD437m (EUR304m) in 56 deals, essentially flat from the same period last year. Meanwhile, the energy and utilities industry saw a 73 per cent decline in investment, the consumer services industry dropped 43 per cent and the business and financial services industry bucked the region’s downward trend by jumping 97 per cent.
Investments in mainland China rose 35 per cent over the same period last year as USD579m went into 45 venture deals during the most recent quarter. The customer services industry claimed the largest proportion of capital as USD191m was put to work, more than double the capital invested during the same period last year. IT was the second largest industry in China, garnering USD144m in venture investment.
In India, venture capitalists invested USD259m in 21 deals during the most recent quarter, more than double the USD113 m put into 13 deals during the same period last year. The services industries garnered the most capital as USD108m was put into business and financial services companies and USD102m was invested in consumer services companies.
Despite a drop in deal activity from 38 deals completed in the first quarter of 2009 to 23 deals completed in the most recent quarter, Israel experienced a 21 per cent increase in capital invested. In the first quarter of 2010, investors put USD212m to work in Israel-based companies.
According to Dow Jones VentureSource, the size of venture deals increased in all markets except the US. The median size of a venture capital deal in the US was USD4.5m, down from USD5m in the first quarter of 2009. Europe’s median deal size was the lowest of any region, despite rising 23 per cent to USD3.4m (EUR2.25m) in the most recent quarter. Mainland China boasted the highest median deal size with a median of USD12m for the most recent quarter.
In India, the median deal size spiked from USD3.2m in 2009 to USD10.4m in the most recent quarter. In Israel, the median deal size more than doubled to USD8m. In Canada, the median deal size jumped 31 per cent to USD5.4m.
