U.S., China see reduction in VC deals

While the U.S. and China accounted for the majority of global venture capital (VC) investment in the second quarter, deals tapered off in both countries in May and June.

A new report from data analytics firm GlobalData showed that both countries collectively made up 60% of deal volume in the quarter, but the total number of VC investments they produced declined month by month.

In April, the U.S. and China collectively had 1,003 VC investments, a number that shrunk to 961 in May and 775 in June.

“With the ongoing U.S./China trade dispute showing no signs of slowdown, VC investors in these two markets will keep a close watch on the developments,” Aurojyoti Bose, a financial deals analyst with GlobalData, said in a release.

Other countries, such as Canada, the U.K. and France, saw “consistent growth” in VC investments, although Brexit is expected to influence VC investment, Bose said.

Of the deals where values were disclosed, low-value deals (investments of US$10 million or less) dominated the quarter, accounting for 75.2% of overall deal volume. There was only one deal worth more than US$1 billion, which was struck in April.

Deal volume declined by 0.4% in May, although the month had six deals with reported values ranging from $US500 million to $US1 billion — the highest of the quarter. U.S. deal volume declined by 2.6% during the month, while deal volume in China shrunk by 17%.

Deal volume contracted 14% in June, with no deals with reported values of more than $US500 million. Deal volume was down 22% in the U.S. in June, while China recovered to its April volume.

Staff

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