Venture Capitalists Look to China, Away From Europe

China has for the first time pulled in more VC deals and dollars than the U.K.

Image: iStockphoto

It’s no secret that venture capitalists like Chinese companies. Now, it appears they like them more than they do companies in the United Kingdom.

Dow Jones VentureSource reports this morning that China has passed the U.K. as the second-largest single-country recipient of venture dollars. Of course, Middle Kingdom companies still lag far behind those in the United States when it comes to attracting bucks from venture capitalists. But individual deals in China are actually larger than they are here.

Chinese companies did 332 venture equity financing deals in 2011, surpassing the 274 such deals done with U.K. companies, according to Dow Jones VentureSource. U.S. companies still get by far the biggest slice of the venture pie, with 3,209 deals done here.

The amount of money flowing to Chinese companies also topped the amount for the U.K., and China is closing in on Europe as the region outside the United States drawing both the most money and deals. In 2011, Chinese companies pulled in $6 billion in venture funding, compared to $1.7 billion for the U.K. and $6.1 billion for all of Europe.

Chinese companies tend to draw bigger investments than their counterparts in the United States or Europe too. The median deal size for a venture-backed Chinese company was $12.7 million, compared with $2.7 million for Europe and $5 million for the U.S.