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NEW YORK, N.Y. – Venture capitalists from around the world invested $10.3 billion in 1,160 deals for companies based in the U.S., Europe, Canada, Israel, Mainland China and India, according to industry tracker Dow Jones VentureSource.

This represents a 29 percent increase in capital invested and a 14 percent rise in deals over the $8 billion invested in 1,022 deals during same period last year.

“Almost every major venture hub saw an increase in deal activity and capital raised,” said Jessica Canning, global research director for Dow Jones VentureSource. “While some regions are still well below pre-recession levels, the growing investment numbers are a positive sign of recovery for the global economy.”

U.S. sees strongest quarter since recession; Activity picks up for Canadian companies

Venture investors put $7.7 billion to work in 744 deals for U.S.-based companies during the second quarter of 2010. This is the highest quarterly total for capital invested since $8.4 billion was put into 699 deals during the third quarter of 2008.

Venture-backed companies in Canada raised $114 million for 19 deals in the second quarter of 2010. This marks an increase in deals but a slight drop in capital raised from the same period last year when 15 deals garnered $120 million. The majority of investment went to IT companies, which raised $71 million for nine deals.

The median deal sizes in North America were essentially flat. The U.S. saw a median of $4.9 million, a slight decrease from the $5 million median in the year-ago period. Canada’s median deal size was $4.8 million, the same as the 2009 median.

Europe: Growth returns after last year’s record low

Venture investors put $1.4 billion U.S. into 289 deals for European companies during the second quarter of 2010, a 40-percent increase in investment from the year-ago which saw record-low investment levels.

“It’s reassuring to see European venture investment beginning to bounce back after the record lows of 2009,” said Arno Castanet, research manager at Dow Jones VentureSource. “After the debt crisis, cautious optimism is emerging about the economic outlook. Investors are refocusing their goals, going back to what they know, and investing in areas and industries where they have seen previous success including information technology, software, and healthcare.”

In Europe, the IT industry, which bore the brunt of the venture market’s losses during the economic downturn, was the star performer in the most recent quarter.

IT companies raised $428 million U.S. for 90 deals and garnered 31 percent of the region’s venture investment. Taking 30 percent of the region’s investment, the Healthcare industry grew by half to $417 million for 65 deals.

Europe’s median deal size was the smallest of any region, with $2.7 million in the most recent quarter. In Israel, the median deal size rose to $4 million, from $3.5 million in the year-ago period.

Asia: Record healthcare investment in China; Services are biggest draw in India

Venture investment in Mainland China during the second quarter of 2010 rose 52 percent over the same period last year to $689 million for 58 deals. Capital invested, however, was still well below levels seen in 2008, when the second quarter saw $1.8 billion put into 96 deals.

In China, the Healthcare industry saw an unprecedented $125 million put into seven deals during the most recent quarter. In India, venture capitalists invested $182 million in 23 deals, almost double the $95 million put into 15 deals during the same period last year. The Services industries were the big winners as Business and Financial Services companies collected $81 million for 10 deals and the Consumer Services industry garnered $61 million for six deals.

Mainland China and India saw the greatest increases in median deal sizes. In China, the median deal size jumped 59% to $10 million. In India, the $8.7 million year-to-date median was more than double the $3.9 million median seen in 2009.

Israel: Investment jumps despite drop in deal activity

In the second quarter of 2010, investors put $220 million into 27 deals for Israel-based companies.

While this represents a 21-percent drop in deal activity from the year-ago period, capital invested jumped 57 percent thanks to a trend toward more capital-intense second- and later-stage rounds.

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