Although global funding for venture capital-backed companies declined in the third quarter, Chinese investors and companies remain on the lookout for potential deals especially in Israel, according to a recent analysis from accounting and consulting concern KPMG International.

Global venture capital (VC) investment in the third quarter fell 14 percent from the previous quarter, to $24.1 billion, the lowest quarterly funding total since the third quarter of 2014, the report said. Global deal activities, however, climbed slightly from the second quarter to 1,983, according to Venture Pulse, the quarterly global report on VC trends published by KPMG and CB Insights.

Irene Chu, head of the High Growth Technology and Innovation Group at KPMG China, said that Chinese VC investors are focusing on markets outside of China, taking advantage of government incentives.

"In particular, Chinese companies have recently acquired or invested in technology companies in Israel, Canada and the United Kingdom. Israel-based companies have been especially keen to work with tech VC funds in China in order to promote their technologies to the Chinese market for their mutual benefit," Chu said in a statement.

Earlier this month Lenovo Group Ltd, the world's largest personal computer maker, said it would invest about $100 million in Israeli startups over the next three years to better tap into local talents and cutting-edge technology to grow its core business.

"We will focus on the internet of things, cloud computing, cyber security, image recognition and other areas which Israel excels in," Song Chunky, vice-president of Lenovo, said in an interview with China Daily.

Israel, known for its innovative engineering, has become one of the most popular destinations for Chinese investment as China seeks to upgrade from a manufacturing hub into a tech center.

In China, 84 VC investment deals were recorded in the third quarter totaling $3.9 billion, compared to 79 deals and $5.7 billion three months earlier, according to KPMG.

"It's becoming more of a buyer's market in China. There's less bidding going on and VCs are taking more time to evaluate each company. Investment committees are asking deal teams to put personal funds into projects to ensure they have a real stake in a company's success," said Lyndon Fung of the US Capital Markets Group in KPMG China in a statement.

Ma Si contributed to this report