VC SURGED IN CHINA Last Quarter

The third quarter was an active one for the venture capital sector in China. More than $1.3 bn in invested capital found new homes, up 84 per cent year over year, according to Dow Jones VentureSource. Of course, capital invested today is the lifeblood of the IPO market tomorrow. Here’s what you need to know:

1. The top line: investors pumped $1.3 bn into venture-backed companies in China last quarter. Deal flow grew 19 per cent year over year, while the amount invested was up a staggering 84 per cent for the same period. Year to date in China, $4.4 bn has been raised across 236 deals.

2. IPOs: in Q3, 29 IPOs were completed, raising $4.6 bn in capital. In Q3 2010, there were more IPOs (33), but they were only good for $3.9 bn in capital. After last year’s record 140 IPOs in China, the pipeline is now thin, and venture capital investors are focused on filling it back up, according to Dow Jones VentureSource.

3. Doubled the median: in Q3 2010, the median venture capital deal in China was $5.1 mn. In Q3 this year, it surged to $11.7 mn.

4. The future: there haven’t been man exits in the consumer space, the slowest sector in Q3. But, it was the most active among venture capital investors, as it has been since 2005. Entries without exits imply a swelling pipeline for the future. In Q3, $674 mn was invested in consumer services companies, up from $287 mn a year ago.

5. Here and now: industrial goods and materials was the most active sector for IPOs. Nine companies went public in Q3.

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Source: Down Jones VentureSource (via email)

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