Venture capitalists from around the world invested $9.8 billion into 967 deals for companies based in the U.S., Europe, Canada, Israel, Mainland China and India during the first quarter of 2011. This represents a 20% jump in investment but a 7% decline in deal activity from the same period in 2010 when $8.2 billion was raised for 1,038 deals.
Investors put $1.5 billion into 182 deals for European companies during the first quarter of 2011, a 17% increase in investment but a 35% drop in deals from the same period last year. The median size of a venture capital deal also fell slightly, to $2.8 million in the first quarter of 2011 from $2.9 million in the same period last year.
Healthcare again led the way among industries, collecting $500 million for 39 deals, a 5% increase in investment and 47% drop in deal activity. The Information Technology (IT) industry hit record lows for both deal flow and capital invested as companies raised $227 million for 49 deals.
During the first quarter of 2011, venture investors put $1.4 billion into 62 deals for companies in Mainland China, representing a 3% decline in investment and 7% decline in deal flow from the same period in 2010. The median deal size hit a record high of $15 million, a 20% increase over the same period last year when the median was $12.5 million.
The Consumer Services industry raised $759 million for 36 deals in the first quarter, accounting for 55% of capital invested and 58% of deals completed in China. Investment in this industry was largely driven by interest in the Consumer Information Services sector, which includes social media, shopping and search companies. Consumer Information Services companies collected $592 million for 28 deals, up significantly from the same period last year when 11 deals raised $161 million.
The Business and Financial Services industry suffered a drop in both deal flow and capital invested as $87 million went into 9 deals in the first quarter, a 68% drop in investment and 25% decline in deal activity from the same period last year. Business Support Services, which benefited from strong interest in advertising and marketing companies, was responsible for closing 80% of capital raised within the industry.
In India, venture capitalists invested $232 million in 26 deals during the first quarter of 2011, a 30% decrease in capital invested but a 30% increase in deal activity. Fifty-eight percent of investment went to Consumer Services companies, which collected $134 million for 12 deals, a 26% drop in capital from the $182 million raised for 4 deals during the same period last year. The median deal size in India declined 40% to $6 million.
Investors put $60 million into 13 deals for Israel-based companies during the first quarter of 2011, a 53% drop in capital invested and 24% drop in deal activity. The median deal size was $4.5 million during the first quarter, 10% below the $5 million median seen during the first quarter of 2010.
In Canada, 23 deals garnered $185 million during the first quarter of 2011, a 12% decrease in deal activity and 13% decline in capital invested from the same period in 2010. The country's biggest draw continued to be the IT industry, which collected $88 million for 7 deals, 5% more capital and 42% fewer deals during the same quarter of the previous year. The median deal size increased 48% to $8 million during the most recent quarter from $4.8 million in the same period in 2010.
In the U.S., growth in venture capital investment was driven by large capital commitments within the renewable energy, healthcare and information technology sectors. Investors put $6.4 billion into 661 deals for U.S.-based venture companies during the first quarter of 2011, a 35% increase in investment and 5% increase in deals from the same period last year.
About Navasota Group
Founded in 2003, Navasota Group (navasotagroup.com) specializes in; alternative energy, biotechnology, oil and gas technology, medical devices and instrumentation, imaging and diagnostics, nanotechnology firms, heavy industry technology, and mining operations. Navasota Group funds total more than $800 million.