Q3 2008 Venture Capital Investing Up 22% in China

According to Dow Jones VentureSource, Venture Capitalists invested $964m in China during the third quarter of this year, 22% increase from the $790m invested in during the same period last year. However, the actual number of deals saw a marked decline as just 59 investments were made in Q3 2008 compared to the 73 deals VC’s made in Q3 2007. Through the first three quarters of this year $3.29bn of Venture Capital money has been invested in China, beating the previous annual record of $2.88bn set in 2001.

China’s consumer services industry accounted for $267m in investment with nine deals completed in the third quarter, up 57 per cent from the $170m put into 15 deals during the same period last year. Through the first nine months of 2008, the industry has seen a record $731m invested in 37 deals. Within consumer services, $143m was invested in four deals for retail companies in the third quarter.

The business and financial services industry saw 13 deals completed in the third quarter, garnering $254m, a 38% increase over the $184m put into the same number of deals during the same period last year. The industry as a whole has seen a record $712m invested in 44 deals so far in 2008, with the business support services sector producing the vast majority of deal activity and investment.

Dow Jones VentureSource also found that the IT industry saw investment decline 17% to $230m in the most recent quarter from $277m in Q3 2007 and the industry’s deal count dropped to 18 from 29.

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