China VCs raise $3bn in second quarter

Chinese venture capital firms had a record $3bn in funds available to invest during the second quarter of 2008.

More than $1.2bn of that was invested in local firms, with IT and hi-tech companies receiving more than half, according to local venture capital consultancy Zero2IPO Group.

During the quarter, 29 local and foreign venture capital firms set up a total of 40 venture capital funds. IT related investments were up compared to the previous quarter.

Almost half the investments were of $1m or more. Thirteen major deals that involved an investment of $20m or more comprised almost half of the total amount invested.

"Expansion-stage and late-stage enterprises both gained much more favour from venture capital, with expansion-stage firms accounting for over half of the total deals," the research firm said in a statement.

Of the $3.02bn in funds raised during the quarter, $1.69bn was controlled by foreign venture capital firms and $1.18bn by local firms.

With only seven foreign funds, compared to 31 funds established by local firms, the average size of foreign funds was considerably greater at $241m.

The total amount invested is growing at an average rate of 73.5 per cent per year, according to Zero2IPO.

"Venture capital firms prefer to invest either in start-ups or in elite, mature enterprises to share their stable revenue," the company said in a statement.

Zero2IPO gathers its data from 300 venture capital firms involved in the Chinese market.

See also:

China spends big on the internet

City dwellers increasingly comfortable with e-commerce  17 Jul 2008

Chip equipment market slumps

Global spending expected to fall 20 per cent  15 Jul 2008

China and India lead mobile phone growth

But rate of growth expected to slow this year  10 Jul 2008

World of Warcraft Trojan spreads from Asia

Password stealing malware hits US and Turkey  02 Jul 2008

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