<article><p>After a disappointing end to 2016, the venture capital industry has rebounded strongly in the first part of 2017, with Asia-focused funds rising to the fore.</p></article>

<p>After a disappointing end to 2016, the venture capital industry has rebounded strongly in the first part of 2017, with Asia-focused funds rising to the fore.</p>
<p>According to a recent Preqin report, North America continues to dominate across all areas of venture capital, but it is Asia that is seeing a large uptick in dry powder levels, along with deal activity and fund performance.</p>
<p>There are currently a record 995 venture capital vehicles out in the market with a combined capital of $132 billion. Of that, $36 billion has already been secured through interim closes.</p>
<p><a href="https://media.dealstreetasia.com/uploads/2017/05/preqin-table1.png"><img loading="lazy" decoding="async" class="alignnone size-full wp-image-72553" src="https://media.dealstreetasia.com/uploads/2017/05/preqin-table1.png?resize=624,334" alt="" srcset="https://media.dealstreetasia.com/uploads/2017/05/preqin-table1.png?w=624 624w, https://media.dealstreetasia.com/uploads/2017/05/preqin-table1.png?resize=300,161 300w" sizes="(max-width: 624px) 100vw, 624px" data-recalc-dims="1" /></a></p>
<p><strong><span style="color: #00ccff;"><em>Venture Capital Funds Closed by Primary Geographic Focus, 2010 &#8211; 2017 YTD (As at April 2017)</em></span></strong></p>
<div class="page" title="Page 3">
<div class="section">
<div class="layoutArea">
<div class="column">
<p>“Asia is now starting to rival the US as the primary global venture capital market, with a number of state-backed mega funds looking to encourage and channel investment in a burgeoning entrepreneurial class. However, fund managers in the region will be acutely aware that in order to sustain their current rate of expansion, they will have to ramp up their level of distributions and prove that the industry can provide long-term gains for investors in order to drive further commitments,” said Felice Egidio, Head of Venture Capital Products, Preqin.</p>
</div>
</div>
</div>
</div>
<p><strong>DRY POWDER</strong></p>
<div class="page" title="Page 6">
<div class="section">
<div class="layoutArea">
<div class="column">
<p>According to the Preqin report, record dry powder held by venture capital funds should also lead to increased deal activity in 2017.</p>
<p>As at April 2017, venture capital funds held a total of $166 billion in dry powder. North America-focused funds hold half of the industry’s dry powder, while Asia-focused funds hold a third. Asia-focused dry powder levels have grown substantially since the end of 2016, up $21 billion in roughly one quarter.</p>
<p><img loading="lazy" decoding="async" class="alignnone size-full wp-image-72554" src="https://media.dealstreetasia.com/uploads/2017/05/preqin-2.png?resize=615,422" alt="" srcset="https://media.dealstreetasia.com/uploads/2017/05/preqin-2.png?w=615 615w, https://media.dealstreetasia.com/uploads/2017/05/preqin-2.png?resize=300,206 300w" sizes="(max-width: 615px) 100vw, 615px" data-recalc-dims="1" /></p>
<div class="page" title="Page 6">
<div class="section">
<div class="layoutArea">
<div class="column">
<p><span style="color: #00ccff;"><strong><em>Venture Capital Dry Powder by Primary Geographic Focus, 2000 &#8211; 2017 (As at April 2017)</em></strong></span></p>
</div>
</div>
</div>
</div>
<p>Throughout Asia, and primarily Greater China, the most likely industries to benefit from this surplus of dry powder are the internet and telecom industries, which have accounted for 27 per cent and 41 per cent respectively of deals in the region in 2017.</p>
<p>Asia-focused funds, which account for just 19 per cent of the total funds, are seeking the most capital as compared to other regions at around $62 billion. However, North America is the focus of the largest number of funds (554) on the road.</p>
<p>&nbsp;</p>
<div class="page" title="Page 6">
<div class="section">
<div class="layoutArea">
<div class="column">
<p><a href="https://media.dealstreetasia.com/uploads/2017/05/preqin-3.png"><img loading="lazy" decoding="async" class="alignnone wp-image-72555" src="https://media.dealstreetasia.com/uploads/2017/05/preqin-3.png?resize=625,337" alt="" srcset="https://media.dealstreetasia.com/uploads/2017/05/preqin-3.png?w=745 745w, https://media.dealstreetasia.com/uploads/2017/05/preqin-3.png?resize=300,162 300w" sizes="(max-width: 625px) 100vw, 625px" data-recalc-dims="1" /></a></p>
<div class="page" title="Page 4">
<div class="section">
<div class="layoutArea">
<div class="column">
<p><span style="color: #00ccff;"><strong><em>Venture Capital Funds in Market by Primary Geographic Focus (As at April 2017)</em></strong></span></p>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
<p>The average size of funds focused on Asia has more than doubled over the past seven years, followed by Europe-focused funds (112 per cent).</p>
<p><a href="https://media.dealstreetasia.com/uploads/2017/05/preqin-4.png"><img loading="lazy" decoding="async" class="alignnone size-full wp-image-72556" src="https://media.dealstreetasia.com/uploads/2017/05/preqin-4.png?resize=590,361" alt="" srcset="https://media.dealstreetasia.com/uploads/2017/05/preqin-4.png?w=590 590w, https://media.dealstreetasia.com/uploads/2017/05/preqin-4.png?resize=300,184 300w" sizes="(max-width: 590px) 100vw, 590px" data-recalc-dims="1" /></a></p>
<p><span style="color: #00ccff;"><strong><em>Average Size of Venture Capital Funds by Primary Geographic Focus, 2010 vs. 2016</em></strong></span></p>
<div class="page" title="Page 4">
<div class="section">
<div class="layoutArea">
<div class="column">
<p>Helped by the Chinese government&#8217;s push to drive entrepreneurship, four of the largest venture capital funds in the market are focused on China. These include the China State-Owned Capital Venture Investment Fund, which is set to become the largest venture capital fund ever with a target size of $29 billion.</p>
<div class="page" title="Page 5">
<div class="section">
<div class="layoutArea">
<div class="column">
<p><a href="https://media.dealstreetasia.com/uploads/2017/05/preqin-6.png"><img loading="lazy" decoding="async" class="alignnone wp-image-72558" src="https://media.dealstreetasia.com/uploads/2017/05/preqin-6.png?resize=640,163" alt="" srcset="https://media.dealstreetasia.com/uploads/2017/05/preqin-6.png?w=1065 1065w, https://media.dealstreetasia.com/uploads/2017/05/preqin-6.png?resize=300,77 300w, https://media.dealstreetasia.com/uploads/2017/05/preqin-6.png?resize=768,196 768w, https://media.dealstreetasia.com/uploads/2017/05/preqin-6.png?resize=1024,262 1024w" sizes="(max-width: 783px) 100vw, 783px" data-recalc-dims="1" /></a></p>
<p><span style="color: #00ccff;"><em><strong>Five Largest Venture Capital Funds in Market (As at April 2017)</strong></em></span></p>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
<div class="page" title="Page 4">
<div class="section">
<div class="layoutArea">
<p>According to the Preqin report, there are currently 421 first-time venture capital funds in market, seeking an aggregate $45 billion in capital. Asia-focused first-time venture capital funds in market make up the same proportion of both targeted capital and number of funds (50 per cent and 19 per cent respectively) as all Asia-focused funds in market.</p>
<p>Sixteen of the Asia-focused first-time funds in market are managed by firms based in China, targeting $18 billion in capital, while 31 are managed by India-based firms, seeking just over $1 billion in aggregate capital.</p>
<div class="page" title="Page 5">
<div class="section">
<div class="layoutArea">
<div class="column">
<p>While venture capital interest in Asia has increased among GPs and LPs, the North American market continues to grow, with a total of 244 first-time funds focused on the region, seeking an aggregate $17 billion. Fifty first-time funds are targeting an aggregate $3 billion to be invested in Europe, significantly less than for Asia and North America.</p>
</div>
</div>
</div>
</div>
<p><a href="https://media.dealstreetasia.com/uploads/2017/05/preqin-7.png"><img loading="lazy" decoding="async" class="alignnone wp-image-72559" src="https://media.dealstreetasia.com/uploads/2017/05/preqin-7.png?resize=640,154" alt="" srcset="https://media.dealstreetasia.com/uploads/2017/05/preqin-7.png?w=1086 1086w, https://media.dealstreetasia.com/uploads/2017/05/preqin-7.png?resize=300,72 300w, https://media.dealstreetasia.com/uploads/2017/05/preqin-7.png?resize=768,185 768w, https://media.dealstreetasia.com/uploads/2017/05/preqin-7.png?resize=1024,246 1024w" sizes="(max-width: 832px) 100vw, 832px" data-recalc-dims="1" /></a></p>
<div class="column">
<p><span style="color: #00ccff;"><em><strong>Five Largest First-Time Venture Capital Funds in Market (As at April 2017)</strong></em></span></p>
<p><strong>DEALS</strong></p>
<div class="page" title="Page 5">
<div class="section">
<div class="layoutArea">
<div class="column">
<p>The Preqin data showed that as on April 2017, 2,779 venture capital deals have been announced globally in 2017, with a total value of $38 billion. The aggregate deal value of $31 billion for first quarter of 2017 represents an increase in value from the preceding two quarters, which saw total deal values of $29 billion in Q3 and $26 billion in Q4 of 2016.</p>
</div>
<div class="column">
<p>According to the report, the trends witnessed in the last part of 2016 represented a continuation of the shift in venture capital activity from North America to Greater China. So far in 2017, Greater China has seen 482 financings, representing 17 per cent of transactions – this is more than double its historical average of 8 per cent (2007-2014). On the other hand, North American venture capital financings account for 40 per cent of transactions, below its historical average of 62 per cent (2007-2014).</p>
</div>
<div class="column">
<p>In terms of aggregate deal value for 2017 so far, North America retains the top spot, with over $18 billion (47 per cent), followed by Greater China with $11 billion (29 per cent) and Europe with $3.6 billion (10 per cent).</p>
<p>On the back of a mega $1.4 billion fund raise by local e-commerce giant Flipkart, venture capital-backed financings in India have amounted to $3.1 billion, representing 8 per cent of all transactions so far this year, which is nearing its aggregate total for all of 2016. Last year, India accounted for just $4.1 billion in aggregate value, a 53% decrease from 2015.</p>
<p><a href="https://media.dealstreetasia.com/uploads/2017/05/preqin-8.png"><img loading="lazy" decoding="async" class="alignnone size-full wp-image-72560" src="https://media.dealstreetasia.com/uploads/2017/05/preqin-8.png?resize=605,416" alt="" srcset="https://media.dealstreetasia.com/uploads/2017/05/preqin-8.png?w=605 605w, https://media.dealstreetasia.com/uploads/2017/05/preqin-8.png?resize=300,206 300w, https://media.dealstreetasia.com/uploads/2017/05/preqin-8.png?resize=260,180 260w" sizes="(max-width: 605px) 100vw, 605px" data-recalc-dims="1" /></a></p>
<div class="page" title="Page 5">
<div class="section">
<div class="layoutArea">
<div class="column">
<p><span style="color: #00ccff;"><em><strong>Proportion of Aggregate Value of Venture Capital Deals* by Region, 2007 &#8211; 2017 YTD (As at April 2017)</strong></em></span></p>
<p><strong>Also Read:</strong></p>
<p><span style="color: #ff0000;"><em><strong><a style="color: #ff0000;" href="https://www.dealstreetasia.com/stories/71238-71238/" target="_blank" rel="noopener noreferrer">Asia to see lower number of VC-backed fintech deals in 2017</a></strong></em></span></p>
<p><span style="color: #ff0000;"><em><strong><a style="color: #ff0000;" href="https://www.dealstreetasia.com/stories/69972-69972/" target="_blank" rel="noopener noreferrer">Flipkart funding helps Asia VC investments rebound in Q1, top $9b</a></strong></em></span></p>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
<p>&nbsp;</p>


North America continues to dominate across all areas of venture capital, but it is Asia that is seeing a large uptick in dry powder levels, along with deal activity and performance.

As fund sizes increase, Asia-focused VCs hold one-third of global dry powder

Bring stories like this into your inbox every day.

Sign up for our newsletter - The Daily Brief

As fund sizes increase, Asia-focused VCs hold one-third of global dry powder

Start your deal-making journey now!

Bring stories like this into your inbox every day.

Sign up for our newsletter - The Daily Brief