Global investment in venture capital-backed companies hit a record high in the first nine months of 2015, with surging numbers of Chinese investors a key driver, new analysis has shown.
In the first three quarters, there were 5,640 investment deals worth a total US$98.4 billion in VC-backed companies globally, breaking the record of US$88.7 billion through 7,687 deals in the whole of 2014, according to a quarterly global report on VC trends jointly published by KPMG International and CB Insights.
Global funding in the third quarter surged from the same quarter of last year by 82 percent to US$37.6 billion, with Asia, particularly China, fueling the growth. During the period, Chinese VC-backed companies raised US$9.6 billion, an increase of 315 percent from a year earlier.
However, China’s slowing economy has had some impact.
“We’ve seen a shift in China in the past quarter. Downward pressure on the economy has led a lot of companies to shift their focus from purely burning capital to gain market share toward building efficiencies and driving profit,” said Lyndon Fung, a partner at KPMG China in charge of its US Capital Markets Group.
The report also highlighted a trend in Asia — and in China in particular — toward more conservative investments.
Increasing Chinese investment has come on the back of the government’s encouragement of startups. For example, central authorities announced last month that they will work with other investors to set up a 60 billion yuan (US$9.5 billion) fund to finance small and medium-sized firms in their early stages.