Venture capital investment is expected to hit more than $32 billion this year, the highest since recording more than $51 billion in 2001, according to an Ernst & Young/Dow Jones VentureOne report. According to the report, growth has been fueled by interest in burgeoning markets such as China, clean technology and seed/early stage funding. "Venture capitalists are responding to the need of large multinationals to get closer to the innovation pipeline, whether through partnerships with promising start-ups or acquisitions of innovative companies," said Gil Forer, global director of E&Y’s Venture Capital Advisory Group. This helps explain why in Europe 42% of completed funding rounds so far this year were in seed and early-stage – the highest percentage in five years. In addition, the year has seen "robust" levels of liquidity in major geographic areas, such as the U.S. and Israel, where VC-backed mergers and acquisitions are up as well as the median amount of those sales by $50 million. Median deal sizes have climbed to their highest level in six years, according to Forer, noting that this demonstrates that "investors are placing bigger bets on selectively fewer companies to sustain the most promising emerging market leaders as they compete worldwide to become the next global market leaders." As for cleantech, investment in the U.S. is already 30% greater than in all of 2005, while the media size cleantech deal in China surged to $6.3 million from $1.3 million a year ago. Looking ahead to 2007, the report says the industry will "likely see even more strengthening of new venture capital markets in Asia, along with additional investment focused on emerging areas of the Internet and the environment."