Global Investor

Risk-averse VC funds

Maulik Tewari | Updated on November 22, 2014

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Their investments rose 2 per cent in 2013



Venture capital (VC) funding at the start-up stage fell across countries, except India, in 2013. According to the latest EY Global Venture Capital Insights and Trends report, VC funds continue to prefer investing in later stages. India saw investments at the profitable stage rise to 33 per cent (double of that 2012) of the total deal value in 2013. In China, VC activity at the product development stage rose from 7 per cent to 12 per cent of the total.

With an improvement in market conditions in the latter half of the year, global venture capital (VC) investment rose 2 per cent to $48.5 billion in 2013.

Investments rose 19.4 per cent in Europe, accounting for a 15 per cent share of deal activity. While banks and insurance companies are scaling back investments in VC funds due to stricter capital norms, there's been a rise in corporate venture firm numbers.

But the story was sober elsewhere. The US, which accounts for close to 70 per cent share of global VC activity, posted a sub-one per cent rise in the amount invested.

China saw a 30 per cent decline during the year. With IPO markets closed in 2013, there were limited exit options for investors in China.

This, however, is expected to change with the markets now open. In contrast, India, with a 4 per cent share, saw venture investments grow 12.5 per cent.

Published on May 04, 2014

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