There were 362 VC deals in the Chinese market in 2006, an increase of 21.5% compare with the 298 deals in 2005. Total VC investment for 2006 was USD2.181 billion, an increase of 52.5% compare with the USD1.43 billion in 2005. The average investment per deal was USD6.03 million, an increase of 25.6% compare with the USD4.8 million in 2005.
VC deals and investment for the TMT industry in the Chinese VC market in 2006 was much higher than that for the Non-TMT industry. 237 deals for the TMT industry, of which 65.5% of the total were VC deals, raised USD1.381 billion, which was 63.3% of the total VC investment. 117 deals for the Non- TMT industry, accounting for 32.3% of the total VC deals, raised USD755 million, which was 34.6% of total VC investment. Average investment per deal for the Non-TMT industry was USD6.45 million, slightly higher than the USD5.83 million for the TMT industry.
There were 99 exit deals in 2006 in the Chinese VC market. IPOs and equity transfers were the 2 main exit channels, which accounted for 84.8% of the exit deals. There were 43 overseas or local IPO exits in 2006, 43.4% of total exit deals. Among the 43, 33 exits went overseas IPOs, which was 33.3% of total exit deals for 2006. Local IPOs gradually matured with the number of exit deals at 10, or 10.1% of the total.
There were 41 equity transfer exits in 2006, which was 41.4% of total exit deals. Among them, 25 deals, or 25.3%, were joint ventures, 4 deals, or 4%, were management buy-outs, and 12 deals, or 12.1%, were trade sales. In addition, there were 6 exits of liquidation in 2006, which was 6.1% of total exits, 7 exits of second offerings, or 7.1%, and 2 exits of unknown type, or 2%.
There were 41 newly raised funds for the Chinese VC market in 2006 with a total financing of USD4.443 billion and an average financing per single fund at USD108.36 million. Among the 41 newly raised funds, 27 funds, or 65.9%, were foreign investment dominant with a total financing of USD3.386 billion, or 76.2% of total, and an average financing per single fund at
USD125.43 million. 11 funds were local investment dominant, which was 26.8% of total funds with a financing of USD961.4 million, or 21.6% of the total, and an average financing per fund at USD87.4 million. 3 funds were joint venture investments, which was 7.3% of total with a total financing of USD95 million, or 2.1% of total, and an average financing per fund at USD31.67 million.
The gap between foreign investment and local investment is still wide for the newly raised funds in 2006. 76.2% of the total newly raised funds were foreign investment dominant, 21.6% were local investment dominant and 2.1% were joint ventures.
