Asia VC fundraising overtakes North American for first time in Q2


Asian venture capital fundraising overtook North America for the first time in the last quarter thanks to another record-breaking result, new research has revealed.

The region saw $19bn of transactions completed in Q2, up from the $17bn recorded in the first three months of the year, and about $600m above than its previous $18.5bn high set in Q3 last year, data from Preqin shows.

North America, the perennial heavyweight of the industry, attracted $17.5bn in Q2, only just above the $17bn attracted by Greater China alone.

That figure also represents a record quarter for the Chinese venture capital industry, up from the previous record aggregate deal value of $14bn from Q1 2016, Preqin said.

The total value of VC transactions in India saw a slight dip over Q2 at $1bn, down from the $1.6bn seen in Q1 and well down on the record $4.2bn seen in Q3 2015, the data showed.

The rest of Asia saw venture capital deals worth $1.3bn take place over the quarter, up from the $1.1bn seen in Q1, and approaching the record $1.9bn seen in Q2 2015.

The two largest venture capital deals of H1 were financings for Didi Chuxing and Ant Financial, at $4.5bn each. All of the top five largest Asian venture capital deals in 2016 so far have been for Chinese companies.

In terms of fund performance, VC in Asia has outperformed North America and Europe for median net IRRs for 2011-2013 vintage funds.

Preqin said that Asia-focused venture capital funds of vintage 2010-2012 have median net IRRs above 15 per cent.

Felice Egidio, head of venture capital products at Preqin, said, “The venture capital industry continues to go from strength to strength in Asia with the region attracting record levels of investment from fund managers, overtaking North America for the first time ever.

“Greater China remains the driving force behind this growth, accounting for more than four-fifths of the aggregate deal value and as such it was unsurprising that the region also registered its highest ever aggregate value of venture capital financings.

“India is also developing within the venture capital industry, recording over $1bn worth of deals for eight consecutive quarters.

“Meanwhile, other Southeast Asian economies such as Singapore and Indonesia are actively fostering their venture capital industries, and appetite among both investors and fund managers is growing as the start-up scene gains traction across the continent.”

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