Recently we have come across an interesting post on Facebook, discussing venture capital investments in America.
And it made us mull over a bit...So we decided to make a little research on the topic:
Which countries have the most venture capital investments?
The result was not that very much surprising.
Venture capital that investors like Marc Andreessen or Peter Thiel put into high-potential start-ups such as Twitter, Facebook or Alibaba.com is on the rise – and, like the sun, it’s rising in the east.
The United States, most particularly the Bay Area, continues to be the largest recipient of investments, according to a study by Ernst & Young.
But China and India, the largest emerging markets for venture capital, are closing in, doubling their share of the global market in just a few years. Taken together, China and India now account for a quarter of the venture-capital market.
In Europe, Germany has for the first time surpassed the United Kingdom, signalling a growing start-up scene in cities such as Berlin.
Overall, 2014 was the best year for the sector since 2001. On graph #1 you can see statistic presenting the value of global venture capital investment worldwide from 2008 to 2014. The global venture capital investment in 2014 reached 86.7 billion U.S. dollars.
Graph #2 from World Economic Forum shows what the venture capital market looked like from 2006 to 2013.
In that period, a total of about $373 billion was invested in venture capital worldwide, a number equivalent to Thailand’s GDP.
The country in which most venture capital was invested in that time was the US, with about $255 billion (or almost 70% of the total).
But these numbers have changed dramatically in the last year for which data is available — 2014. The same countries and regions dominated the venture-capital market in 2014, but the proportions have changed.
The US still came in first, with about $52 billion. But its proportion of the total fell to just over 60%, compared with 70% in the eight years previously. Graph #3:
You can also see that on the graph #4 presenting the value of global venture capital investment worldwide from 2011 to 2014, by region. Venture capital investments in the United States amounted to 52.1 billion US. dollars in 2014 (and were still far larger than those in other presented regions).
The countries that made a big jump were the large emerging economies – China and India. In a single year, the proportion of Chinese venture capital in the global total doubled, from an average of 9% from 2006 to 2013, to 18% in 2014.
In one year, Chinese venture capitalists invested half of the amount they had invested in the previous eight years combined. As a consequence, China surpassed Europe as the world’s second-largest market for venture capital.
All in all, the sectors that are mainly invested are:
- Computer & consumer electronics
- Life science
- Consumer goods & retail
- Energy & environment
- Consumer services
- Business & industrial services
- Business & industrial products
- Financial services
- Chemicals & materials
Now speaking about Europe...
If to take a look on the graph #5 that depicts the statistics of venture capital investments by sector in selected European countries (according to 2012 in Million US dollars), we can observe quite an active investments development.
But if to compare venture capital investments of US and Europe by some sectors in the same year... The results are somewhat disappointing. Graph # 6
And you can also compare the percentage of investments in US and Europe in different sections.
Thus, the winner in this so called "race" is obvious. And for the finishing touch here is another statistics: all of the Europe invests in venture capital projects less than 10% of what the US invests. Tiny Israel aims at innovation more than Germany and the United Kingdom. Enjoy the graph “Venture capital investments per country as a % of US” :)