Global VC investment soars past $170 billion

Global VC investment soars past $170 billion in 3rd-straight record quarter, says KPMG’s Private Enterprise’s Venture Pulse report.

Global VC investment soars past $170 billion in 3rd-straight quarter.

  • Americas sees high of $94 billion in VC investment in Q3'21, including record $82.8 billion n the US.
  • Global corporate VC investment surpasses previous annual record at end of Q3'21 - accounting for $230.7 billion YTD.

This year's healthy level of Global VC investment showed no signs of stopping in Q3'21, setting a record for the third-straight time with $171.7 billion across 8,682 deals. An incredible amount of dry powder, increasing participation by less traditional VC investors, and robust exit opportunities helped keep the VC market very healthy according to the Q3'21 edition of Venture Pulse - a quarterly report published by KPMG Private Enterprise on VC trends globally and in key jurisdictions around the world.

A record 11 deals at or over $1 billion during the quarter helped propel VC investment to the new high. India-based Flipkart raised $3.6 billion in the largest deal of Q3'21, followed by US-based Rivian ($2.5 billion) and Generate ($2 billion. Other companies that raised $1 billion+ funding rounds included India-based Byju ($1.7 billion), US-based Databricks ($1.6 billion), China-based Svolt ($1.58 billion), US-based Articulate ($1.5 billion) US-based Devoted Health ($1.2 billion), Brazil-based Nubank ($1.1 billion), US-based Chime ($1.1 billion), and US-based GoPuff ($1 billion).

The Americas accounted for more than half of the global VC investment total, with a record $94 billion in funding during Q3'21. The US accounted for $82.8 billion of this total - also setting a new quarterly record. VC investment in the Asia-Pacific region reached $48.1 billion in its best quarter since Q2'18 and its second-highest quarter of VC investment ever. After a record Q2'21, VC investment in Europe dipped slightly to $27.5 billion primarily due to a summer slowdown during which many dealmakers took vacation for the first time since the pandemic began.

Global exit activity remained robust - with $292 billion in exit value across 780 deals in Q3'21. This helped propel YTD totals over $1 trillion - more than double the previous high of $468 billion (set in 2020) with one quarter left in the year.

Key Highlights - Q3'21

  • Global VC investment rose from $166 billion across 9,217 deals in Q2'21 to a record $171.7 billion across 8,682 deals in Q3'21.
  • VC investment in the Americas reached a third-straight record high, with $94 billion invested across 3,934 deals. The US accounted for $82.8 billion of this investment and 3,518 of the deals.
  • VC investment in Europe remained strong, with $27.5 billion of investment across 1,910 deals in Q3'21 - down from the record $36 billion seen in Q2'21.
  • The Asia-Pacific region saw $48.1 billion in VC investment across 2,616 deals in Q3'21
  • the second highest quarter of VC investment after Q2'18.
  • Global corporate-affiliated VC investment reached a record $85.5 billon in Q3'21 - propelling annual CVC-related investment to a record $230.7 billion with a quarter left in the year.
  • VC-backed exit value fell from a record $399.2 billion in Q2'21 to $292.4 billion during Q3'20. Total annual exit value passed the $1 trillion for the first time ever with Q4'21 still to come.

Record VC investment in the US, Brazil and Mexico drive Americas' total to new high

VC investment in the Americas reached $94 billon in Q3'21, driven in part by record levels of funding in the US ($82.8 billion), Brazil ($3.7 billion), and Mexico ($1.4 billion). VC investment in Canada dropped from a record $4.5 billion in Q2'21 to $2.6 billion in Q3'21. While a significant decline, the investment remained high compared to historical norms. Together, the robust funding across the Americas helped push total investment in the region to a new high of $94 billion 3,934 deals.

Large deals remained a key feature of VC investment in the Americas, with a record eight deals larger than $1 billion, including 7 in the US (Rivian, Generate, Databricks, Articulate, Devoted Health, Chime, GoPuff) and one in Brazil (Nubank). Antigua-based cryptoexchange FTX also raised $900 million during the quarter.

VC investment in India doubles previous high as Asia-Pacific sees strong quarter

The Asia-Pacific region attracted $48.1 billion in VC investment across 2,616 deals during Q2'21. China attracted close to half of this total with $23.7 billon raised. During Q3'21, China's central government introduced new rules for tutoring companies and banned all cryptocurrency transactions. Despite these and other regulatory changes, hardware, healthcare, and consumer market companies continued to raise large VC rounds in China. During Q3'21, China's largest deals included energy storage company Svolt ($1.58 billion), life sciences firm AbogenBio ($700 million), and 5G tech company CICT Mobile ($569 million.

VC investment in India smashed previous records, more than doubling from its previous quarterly high of $6.7 billion in Q2'21 to $14.4 billion during Q3'21. India also saw a record 498 VC deals during the quarter - up from 376 the previous quarter. India accounted for four of the largest deals in the Asia-Pacific region this quarter - including the $3.6 billion raise by Flipkart, a $1.7 billion raise by Byju, a $650 million raise by Eruditus Executive Education, and a $570 million raise by Meesho. Australia and Japan also saw record quarters of VC investment in Q3'21, with $1.7 billion and $1.4 billion in funding respectively.

Second strongest quarter of VC investment in Europe despite seasonal lull

Following a record-breaking Q2'21 - which saw over $36 billion in funding, VC investment in Europe slid to $27.5 billion in Q3'21. The decline likely reflects a summer lull in deal activity - one more dominant in 2021 as many dealmakers took vacations for the first time since the beginning of the pandemic. Despite the drop in total funding, Q3'21 was the second strongest quarter ever in Europe. Exit activity was also incredibly robust, with a record $81.2 billion in exit value - more than double the previous high of $33.8 billion seen in Q1'21.

Jurisdictions across Europe continued to attract significant investment; in Q3'21, the five largest deals occurred in five different jurisdictions - with Germany-based Gorillas raising $950 million, followed by UK-based Revolut ($800 million), Estonia-based Bolt ($709 million), Netherlands based Picnic ($707 million), and France-based Sorare ($680 million). The UK saw VC investment reach a record $9.4 billion in Q3'21 - up slightly from the $9.1 billion seen in Q2'21.

Cleantech hits the big time

VC investment in ESG and cleantech hit the big time in Q3'21, with many of the largest deals globally having a cleantech or ESG element, including the $2.5 billion raise by electric vehicle manufacturer Rivian, the $2 billion raise by alternative energy infrastructure company Generate, the $1.5 billion raise by energy storage company Svolt, and the $766 million raise by battery recycling company Redwood Materials. Emerging ESG areas also continued to gain traction; in Q3'21, Israel-based cultured meat company Aleph Farms raised $105 million.

Heading into final quarter of 2021, VC investment expected to remain very strong

VC investment in Q4'21 is expected to remain very healthy, bringing an end to an incredible year for VC markets around the world. The continued abundance of capital, robust fundraising activity, rapidly maturing VC markets around the world, and a growing diversity of sectors attracting investment will likely keep total investment very strong.

*All figures are in USD

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