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Venture Capital

Preqin: Asia shines in record quarter for venture capital deals; fundraising, exits lag

Venture capital funds put a record $47 billion to work in the quarter ended June 30, and Asia, with a record $23 billion for the region, accounted for almost half of that deal value, according to a report Thursday by Preqin.

The $5.5 billion financing in April of Beijing-based ride-sharing company Didi Chuxing, likewise a record for a single deal, further bolstered the region's prominence in global venture capital activity, as well as China's status as the main hunting ground in the region for investors, Preqin reported.

Year-to-date through July, Asia accounted for 31% of venture capital deals and 47% of deal value globally, the report said. Greater China led the way, with 901 deals and $28 billion in aggregate deal value over the first seven months of the year, followed by India, with 448 deals for $6 billion.

The corresponding numbers for North America were 42% of deals and 41% of deal value. Europe accounted for 22% of deals but only 10% of deal value.

In contrast to the hot pace of dealmaking, exit activity and fundraising in the region have been relatively quiet, the report said.

Following the first quarter of 2016, which saw a flurry of exits with aggregate value of $4.8 billion, the following five quarters have seen average exits of just more than $1 billion, the report said.

Felice Egidio, head of venture capital products with Preqin, said in a news release the weakness of exit activity bears watching for its potential to depress dealmaking. A lack of distributions from exits "may deter investors from committing further capital," he warned.