Get the latest news alerts: at Twitter.

Local Tech Wire

RESEARCH TRIANGLE PARK, N.C. – Global venture capital financing outside of the U.S. showed signs of life in the third quarter with investors putting $1.8 billion into 297 deals.

The figure nearly matches the $1.9 billion invested in the first quarter and is up $400 million from the second quarter, reported Tuesday.

However, investments were down sharply from a year ago, including some 41 percent in China. Average deal size also was smaller.

The number of deals made in China also plunged more than 40 percent from a year ago.

Global financing remains miniscule when compared to the U.S. where $5.1 billion was invested last quarter in 616 investments. But the director of global research for VentureSource praised the “consistency” of the market environment outside the U.S.

“Even as individual regions see dramatic ups and downs quarter over quarter, overall international investments have been steady in 2009,” she said. “This overall consistency is a promising sign as investors chart their course after the global downturn in 2008.”

The size of investments fell to $2.6 million from $3.7 million a year ago, a drop of 30 percent.

In China, the size of deals fell even more to $3.6 million from $7.4 million.

Average deal size in the U.S. was $5 million in the third quarter, down from $7 million a year earlier.

In Europe, investments rebounded to 201 deals worth nearly $1 billion, up 23 percent from the second quarter which was the lowest tracked by VentureSource since 2000. Still, the totals are nearly 50 percent lower from the same quarter in 2008.

Information technology invesments dominated with $425 deals followed by health care with $296.

Interestingly, software deals hit a record low of $72 million while for the first time medical device investments ($158 million) drew more than biopharmaceuticals ($122 million) for the first time.

Some country snapshots as provided by VentureSource:

• The second-favorite destination for venture capital, behind the U.S., the United Kingdom saw $393 million put into 67 deals during the third quarter. This is on par with the $419 million put into 83 deals during the same period last year.
• Despite a 41% drop from the same period last year, mainland China had its strongest quarter of 2009 as $465 million went into 40 venture deals during the third quarter. Notably, the country’s business and financial services sector captured the most dollars with $155 million put into eight deals.
• France had its worst quarter of 2009 and dropped 58% from the same period last year as venture investors put $173 million into 55 deals.
• Israel-based companies garnered $191 million in 29 venture deals, 57% less than the $449 million invested in 48 deals during the same period in 2008.
• In Switzerland, investors put $80 million into seven deals, on par with the previous quarter but down 37% from a year ago.
• In India, venture capitalists invested $81 million in 14 deals in the third quarter, a staggering 70% less than the $274 million invested in 31 deals last year.
• Capital investment in Germany plummeted to $74 million, down from $282 million a year ago.
• On par with the previous quarter, Canada garnered $115 million in venture capital with 13 deals completed in the third quarter. This is still a 48% drop from the $221 million put into 25 deals in the third quarter of 2008.
• Sweden had its best quarter of 2009 though venture investment was down 22% from one year ago. Capital investment in the country was $75 million in the most recent quarter.