VC investment in the Americas was extremely strong in Q2’21, led by a $2.5 billion deal by Waymo and $1 billion+ funding rounds by SpaceX and Epic Games in the US.

Bumper quarter for fintech investment across Americas

Fintech saw a banner quarter of investment across the Americas in Q2’21, attracting numerous $100 million+ funding rounds. During the quarter, US-based e-commerce company Perch raised $775 million, while Better and DailyPay both raised $500 million; in Latin America, Nubank raised $1.5 billion, Bitso raised $250 million, and Cloudwalk raised $201 million; and in Canada, Wealthsimple raised $600 million.

While fintech-focused VC investments in Latin America have primarily focused on payments and lending, the US and Canada have seen a more diverse range of investments, including into subsectors such as wealth management, insurtech and, more recently, real estate. Buy now and pay later companies have also gained a lot of traction in recent quarters.

Unicorn status becoming common in US, still a milestone elsewhere in Americas

In the first half of 2021, 148 new unicorn companies were born in the Americas. With valuations clearly becoming less of a sticking point to investors, unicorn status appears to be losing some of its significance, at least in the US, which saw 137 of the new unicorns. In the US, decacorn status (reaching a valuation of $10 billion+) could become the next major differentiator.

In the rest of the Americas, however, unicorn status is still a major milestone. Canada saw six new unicorns in Q2’21, including e-commerce financing company Clearco, legal practice management company Clio, AI-focused chip maker Tenstorrent, AI-powered chatbot provider Ada Support, ID verification firm Trulioo, and e-commerce focused retailer Ssense. Mexico, meanwhile, saw its second new unicorn ever during Q2’21: cryptocurrency platform Bitso.

Canada sees another banner quarter of VC investment

After almost doubling its previous record in Q1’21, VC investment in Canada remained very high in the second quarter, led by a $600 million raise by Wealthsimple, a $130 million raise by Ada Support, and a $110 million raise by Clio.

B2B solutions were particularly hot in the eyes of investors during Q1’21, in addition to fintech and biotech AI also generated a lot of interest in Canada given its strong research pedigree. Over the last few quarters there has been a lot of activity among AI-focused startups and scaleups, including a C$100 million Series A raise by autonomous vehicle startup Waabi, highlighting confidence in the growing capacity for Canadian companies to commercialize AI innovations.

Deep tech also continued to garner attention, primarily from investors with the long-range capital to make option bets on globally impactful future technologies, such as BDC and OTPP. During Q2’21, for example, photonics quantum computer company Xanadu raised $100 million in a deal which included funding from BDC’s Deep Tech Venture Fund, and follow-ons from OMERS Ventures.

Latin America attracts several $200 million+ funding rounds in Q2’21

VC investment in Latin America was very robust in Q2’21, led by a $1.5 billion raise by Brazil-based Nubank, a $300 million raise by Brazil-based rental company QuintoAndar, a $250 million raise by Mexico-based cryptocurrency platform Bitso, and a $201 million raise by Brazil-based payments firm CloudWalk. The raise by Bitso made the company Mexico’s second unicorn, following pre-owned car sales platform Kavak in Q4’20.

Fintech continues to be a dominant focus for VC investment across Latin America, accounting for three of the four largest deals of the quarter. Nubank alone has already raised $1.5 billion in VC funding in the first half of 2021; its recent fund round valued the digital bank at $30 billion.1

Trends to watch for in the Americas

VC investment across the Americas is expected to remain strong heading into Q3, 21. Investment in fintech will likely remain very hot, along with investment in B2B, AI-based solutions, and health and biotech.

At a macro level, there is growing concern about inflation, particularly in the US, which could potentially have a resonating impact on the public markets and on VC investment.

Venturing financing in Americas chart

VC investment and deals activity in Canada has been literally gangbusters—and the pace doesn’t seem to be subsiding. No surprise, health and biotech has been a hot area of investment. When you think about it, mNRA is a technology and there’s a lot of companies looking at how it can apply outside of COVID-19 vaccines—such as for diabetes research, for cancer research, and otherwise. Given the potential applicability, we’re going to see a lot more investment in the future.

Sunil Mistry
Partner, KPMG Private Enterprise Technology
KPMG in Canada

  • New record high of $84.1 billion invested across 3659 deals

  • Series A sees surge in deal value

  • Median pre-money valuation for Series D+ reaches $1 billion in H1’21

  • Canada blasts to new record, powered by 19 mega rounds

  • Brazil sees over $2.5 billion invested with mega deals including Nubank

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