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Venture capital investment in China up to $719m in first quarter21/05/2008. Source: AltAssets. 
 Venture capital investment in China was up to $719m across 39 deals during the first quarter of 2008 from $492m in the first quarter of 2007, with media and advertising companies accounting for the bulk of deal activity and investment, according to the China Quarterly Venture Capital Report released by Dow Jones VentureSource. However, deal count was the lowest the region has seen in three years.
Jessica Canning, global research director for Dow Jones VentureSource, said, 'The first quarter marked the continuation of a broader trend we have been watching, not only in China but in India as well, as venture capitalists have focused on capitalising on opportunities for local media, advertising and other business services companies.
'While some of these investments are for web-based technologies, many of the larger deals are going to finance traditional services like billboard and signage companies and travel-related services. With a ramp-up in transit infrastructure and the increasing popularity of automobiles in China, there is a real opportunity for venture-backed companies to exploit the newfound mobility of the region's emerging middle and upper classes,' Canning continued.
The report found that China's consumer/business services sector accounted for 54 per cent of all deal activity in the first quarter as 21 deals attracted a record $491m in investment. This is an increase of 136 per cent over the $208m invested in the sector in the first quarter of 2007. In total, the business, consumer and retail industry accounted for 30 deals and $632m worth of investment in the first quarter. Beijing's Skyflying Media, which provides outdoor transit-focused advertising services, closed one of the largest rounds of quarter in China with its $83m later stage financing.
'Larger deals drove the jump in investment in the first quarter with the median deal size in China reaching $10m, the highest total since we began tracking the region,' Canning added. 'And it is clear that this money is going to finance the expansion of well developed companies, even those raising first rounds. In fact, nearly 99 per cent of all investment in the first quarter went to companies already generating revenues or are profitable.'
Even though the vast majority of capital went to developed companies, early stage rounds still dominated, according to the report. First rounds made up 54 per cent of all venture rounds in the first quarter, up from 42 per cent in the first quarter of 2007. Second rounds made up 28 per cent of the deal count, down from 36 per cent, and later stage rounds accounted for 13 per cent, up from eight per cent.
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