Front Core Capital Shift Focus To China As VC Investment & IPOs Remarkably Steady
The median size of a venture capital deal during the second quarter of 2011 was $10.5 million, up 50% from the same period a year earlier.
- (1888PressRelease) September 02, 2011 - Front Core Capital observes that in the first half of 2011, China-based companies with venture backing raised $3.2 billion through 145 deals. Initial public offerings (IPOs) of venture-backed companies were similarly in line with the previous year, as 54 IPOs raised $9.2 billion in the first half of 2011 compared with 57 IPOs at $10.1 billion in the same period in 2010.
Through a continued focus on late stage deals, venture capitalists, such as Front Core Capital, are able to bring their companies public in less than three years. With a short timetable from investment to exit and valuations on the rise, investors in Chinese companies have a good story to tell their limited partners.
The median size of a venture capital deal during the second quarter of 2011 was $10.5 million, up 50% from the same period a year earlier.
After hitting a record 140 IPOs in 2010, venture-backed companies in China were just three IPOs short of matching the number of offerings in the first half of last year. Companies that went public during the second quarter raised a median of $6.4 million and were founded a median of 2.8 years prior to their IPO. Compared to the second quarter of 2010, it took companies 78% more capital to reach an exit but only slightly more time -- the median tracked during the most recent quarter marked a negligible increase from the 2.7-year median a year ago.
In the first half of 2011, the Consumer Services industry was the most popular investment area for venture capitalists. Sixty-nine deals for Consumer Services companies raised $1.7 billion in the first half of the year, a 57% increase in deal flow but a 16% decline in capital invested.
Front Core Capital sees that investment in the industry was driven by interest in the Web-heavy Consumer Information Services sector, which includes social media, entertainment and shopping companies. These companies raised $942 million through 44 deals during the first half of the year, more than triple the amount raised in the 23 deals the same period a year ago.
The Information Technology (IT) industry recorded 25 deals collecting $533 million in the first half of the year, a 29% decline in deal activity. Software was a bright spot within the industry, with $429 million raised in 17 deals, more than triple the capital raised in the 12 deals completed the same period last year. The Communications and Networking and Electronics and Computer Hardware sectors each had four deals completed.
Driven by increased interest in advertising and marketing companies, the Business and Financial Services industry recorded a 21% increase in deal activity, with 23 deals raising $334 million. Within the industry, companies offering advertising and marketing technologies or services accounted for 13 deals at $279 million raised.
In other areas, the Healthcare industry's deal activity halved to eight deals collecting $205 million. Industrial Goods and Materials also declined, with nine deals raising $155 million. Consumer Goods companies closed up by one deal over the prior year, with 10 deals raising $189 million.
- About Front Core Capital -
Front Core Capital is a Venture Capital and Financial service company. Front Core Capital caters to the expectations of knowledgeable and discerning investors who seek the highest return on their investments. Front Core Capital is a wholly independent company and, as such, is not restricted in any of the funds or investment products we may wish to utilize for our clients' wealth management and financial planning purposes.
- Press Contact at Front Core Capital -
Zach Amiran, press-contact ( @ ) frontcorecapital dot com
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