A Comparison of Asia and Europe-Focused Venture Capital Fundraising

by Meaghan Conlon

  • 30 Mar 2017
  • PE
  • VC

In 2016, Asia-focused funds acquired 23% of total fundraising capital, up from the 19% market share they held in 2009. Europe-focused funds, over this same time span, dropped from representing 18% of total fundraising in 2009 to 13% in 2016.

Over the past eight years, Asia-focused funds have been second only to North America in terms of the capital raised and number of vehicles closed, with Europe trailing third. With $97bn in capital committed since 2009 across 941 funds, Asia-focused fundraising was over double that of Europe-focused funds, which raised $44bn in committed capital through 502 vehicles.

The disparity between Asia- and Europe-focused fundraising is partly due to the higher number of large venture capital funds focused on Asia. In the past eight years, only one Europe-focused fund, Rocket Internet Capital Partners Fund, closed in 2017 reaching $1bn in capital commitments. Meanwhile, since 2009 13 Asia-focused funds have raised $1bn or more in capital commitments, with three funds even closing above $2bn. In 2011, Shanghai Municipal Creative (Design) Industrial Investment Fund and DST Global II closed on $4.2bn and $2.2bn respectively, and Nanjing Jianning Zijin Equity Investment Fund I closed on $3.2bn in 2012.

In both regions, the majority of capital has been raised by local fund managers as opposed to international firms. In recent years, Europe-focused funds have a higher percentage of local GPs than Asia-focused funds, perhaps due to the greater number of international fund managers looking to break into the Asian market. However, in 2016, the proportion of capital raised by local fund managers decreased in both Europe and Asia from the previous year: 86% of Europe-focused capital raised was by domestic fund managers, down from 96% in 2015. Asia-focused capital raised by local fund managers saw an even sharper decline, with 61% of capital coming from local fund managers in 2016 compared with 92% in 2015.

The changing geopolitical environment will likely lead to subtle shifts in the venture capital industry in Asia and Europe. The different set of challenges facing these firms means that while the majority of Asia-based GPs are primarily concerned with fundraising and attracting capital, political and economic uncertainty is one of the leading concerns for Europe-based fund managers, according to the recent Preqin Special Report: Private Equity Fund Manager Outlook, H1 2017. In the coming months, it will be interesting to see whether these concerns will have an impact on fund manager and investor activity in these two regions.

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