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Adapting and evolving - Global venture capital insights and trends 2014

Author: EY
Date: March 2014

2013 was a solid year for the global venture capital industry. Reversing the decline seen in 2012, investment levels rose 2% to US$48.5b.

This flat performance masks an exceptional fourth quarter in which investment soared by 10% and the number of rounds by 10%, reflecting improving economic fundamentals toward the end of the year and paving the way for a stronger 2014.

European and Israeli rebound fails to counterbalance flat US and Chinese decline

Stronger signs of growth in the US economy, which account for 68% of global venture capital activity, came too late in the year to make a significant impact on the overall figures.

The remarkable rebound in Europe, which saw a 19% rise in capital invested and 6% rise in the number of deals, although highly encouraging, was not enough to drive significant movement in the global total. Europe accounts for only 15% of global venture capital activity.

China, the third largest hotbed in the global venture capital rankings, had a poor year in which the value of deals fell by US$1.5b, marking the lowest point for the country since 2009. In previous years, China has been a close second to Europe in terms of its global significance for venture capital activity.

The closure of the domestic stock exchanges during 2013 had a significant impact on the sector, as China declined from 11% of global venture capital dollars invested in 2012 to 7% in 2013.

Geography: Global

Type of study: Consulting research

Relevant for: Limited partners, GP Venture Capital, Funds of funds, Associates

Source: EY