Thursday, October 4, 2012
International Venture Capital Deals Activity Declines in Q3
8% drop in the number and 20% decline in the value of VC deals in Q3 2012 in comparison to previous quarter Preqin’s quarterly venture capital deal-flow data shows that 1,226 venture capital financings were announced during Q3 2012, with an aggregate value of $9.3bn – an 8% drop in the number and a 20% decline in the value of deals in comparison to Q2 2012. This dip in activity brings VC deal value back to similar levels of venture capital investments witnessed in Q4 2011 and Q1 2012, while the number of deals taking place remains strong in comparison to recent quarters. Other Key Facts: • 70% of the number and 76% of the global aggregate value of VC deals announced in Q3 2012 occurred in North America, with 860 financings valued at $7.0bn during the quarter, a decrease of 4% in the number and 19% in the value of deals in the region in comparison to the previous quarter. • European deals accounted for 16% of the number and 11% of the global aggregate value of venture deals in Q3 2012, with 191 deals valued at $1.0bn during the quarter, a decline of almost a third in both the number and value of deals in comparison to Q2 2012. • 39 venture deals valued at $370mn were announced in China during Q3 2012, representing 3% of all deals globally. While the number of VC deals in China has increased slightly in comparison to Q2 2012, the value of deals fell 40% from the previous quarter, as investor worries over the Chinese exit market continue to subdue deal activity. • 78 VC deals valued at an aggregate $610mn were announced in India during Q3 2012, a 40% increase in deal value from the previous quarter; this represents the highest levels of VC activity in the country in any quarter from Q1 2010 to Q3 2012. • Israel saw virtually identical numbers of deals compared to the previous quarter, with 19 deals valued at $128mn announced. • Q3 2012 witnessed the continuing prominence of early stage investments in the venture capital sector, with angel/seed stage deals accounting for 22% of investments in Q3, whilst Series A deals represented 16% of deals. Additionally, Series B, C, D and later investments accounted for less than 20% of the number of all deals. • While companies in the internet sector once again received the highest number of VC financings, the aggregate value of these as a proportion of the total for all sectors fell four percentage points from 25% in Q2 2012 to 21% in Q3. • Software deals account for 17% of the value of VC deals in Q3 2012 (up from 11% in Q2 2012), while healthcare deals represent 16% of the number and 22% of the value of VC deals this quarter.