Global Venture Capital Volume Up in Q1, Deal Number Down

(U.S. Mint)

The volume of venture deals for companies in the U.S., Europe, Canada, Israel, China, and India jumped 20 percent to $9.8 billion in the first quarter of 2011 compared to the same quarter in 2010. However, the number of deals worldwide declined 7 percent in the first quarter, to 967.

The data compiled by Dow Jones VentureSource show venture capital (VC) investments in the U.S. accounted for two-thirds (66%) of the total volume in the first quarter, with Europe (15%) and China (14%) next in line. In the U.S., VCs invested $6.4 billion — up 35 percent over Q1 2010 — in 661 deals — down 5 percent — particularly in renewable energy, health care, and information technology.

In both China and India, the first quarter volume and number of VC deals declined compared to Q1 2010. China’s $1.4 billion invested in the first quarter represents a 3 percent decline, while the 62 deals is 7 percent less than Q1 2010. The volume of VC investment ($232 million) and number of deals (26) in India both dropped 30 percent in the first quarter compared to Q1 2010.

In both China and India a majority of the investment volume went into consumer services companies. While information technology investment volume rose 64 percent in China to $334 million in the first quarter, the number of deals declined by 36 percent. Dow-Jones VentureSource says this is part of a longer term declining trend by investors in Chinese IT companies.

Europe experienced an increase in investment volume and but a sharp decline in deals in the first quarter. VCs put $1.5 billion into 182 deals for European companies during the first quarter of 2011, a 17 percent increase in investment. However, the 35 percent drop in deals from the same period last year represents the lowest quarterly deal count since Dow Jones VentureSource began tracking the region in 2000.

Health care companies in Europe collected $500 million (up 5%) in 39 deals (down 47%) in the first quarter. Most of the health care volume and deals went for biopharmaceutical companies. Investments in information technology companies hit record lows for both deal flow and capital invested as companies raised $227 million in 49 deals.

In Canada for the first quarter of 2011, both the volume ($185 million) and number of deals (23) declined 13 and 12 percent respectively. VCs put $60 million into 13 deals for Israel-based companies during Q1, a 53 percent drop in capital invested and 24 percent decline in deal activity.

Read more: Q1 2011 Venture Fund Raising Up in U.S., Down in Europe

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