China IT investment down as media gets money

First-quarter venture capital investments in China rose a healthy 46% to $719 million, even though the number of deals fell to a three-year low of 39.

The rise was driven by media, advertising and other business and consumer service companies, which accounted for 30 of the deals and $632 million of the total, according to the latest figures from Dow  Jones Venture Source.

By contrast, only five IT companies were funded, the lowest total in six years, with funding dropping 72% to just $44  million. And most of that amount, $30 million, went to one company, Shenzhen State Micro Technology.

It could be that much of the first-generation Internet infrastructure bets have already been made, and VCs are now looking at investing in startups that will build Web-based businesses on top of that platform.