This year, the sound level of global VC investment showed no signs of slowing down in the third quarter of 2021, setting a record for the third consecutive quarter, with US $ 171.7 billion through 8,682 transactions. High liquidity, increasing participation of less “traditional” VC investors and divestment opportunities helped maintain a healthy VC market, according to Venture Pulse for the third quarter of 2021, KPMG Private Enterprise’s quarterly trend report VC worldwide and in key regions around the world.
The record of 11 transactions worth more than US $ 1 billion each during the quarter, helped VC investments climb to a new high. The Indian Flipkart raised US $ 3.6 billion in the largest transaction of the third quarter of 2021, followed by the US Rivian (US $ 2.5 billion) and Generate (US $ 2 billion). Other companies with funding rounds of over US $ 1 billion include Byju based in India (US $ 1.7 billion), Databricks in the US (US $ 1.6 billion), Svolt in China (US $ 1, 58 billion), Articulate in the US (US $ 1.5 billion), Devoted Health in the US (US $ 1.2 billion), Nubank in Brazil (US $ 1.1 billion), Chime in the US (US $ 1.1 billion) and GoPuff in the US (US $ 1 billion).
More than half of the global VC investments were made in the Americas, setting a record funding of US $ 94 billion during the third quarter of 2021. Of this, US $ 82.8 billion – also a new quarterly record – came from USA. VC investments in the Asia-Pacific region amounted to US $ 48.1 billion in the best quarter after the second quarter of 2018, but also the second best quarter for VC investments in general. Following the record of the second quarter of 2021, VC investments in Europe recorded a slight decline to US $ 27.5 billion, mainly due to the summer slowdown as many investors went on vacation for the first time since the pandemic began.
Global divestment activity remained strong – worth US $ 292 billion through 780 transactions in the third quarter of 2021. This contributed to the total divestment amount since the beginning of the year to over US $ 1 trillion. – more than double the previous high of US $ 468 billion (in 2020), with another quarter left to close the year.
“The word ‘record’ is constantly reappearing quarterly in reports on global VC investments as well as VC investments in each region,” said Kevin Smith, Head of KPMG Private Enterprise at EMA and KPMG Partner in the UK. “The reality is that 2021 was an amazing year for the VC market worldwide and we are not done yet.”
Key points – third quarter 2021
– Global VC investments increased from US $ 166 billion through 9,217 transactions in the second quarter of 2021 to US $ 171.7 billion through 8,682 transactions in the third quarter of 2021.
– VC investments on the American continent recorded a record for the third consecutive time, with investments of US $ 94 billion through 3,934 transactions. The US $ 82.8 billion of these investments and 3,518 of the transactions came from the US.
– VC investments in Europe remained strong, with investments of US $ 27.5 billion through 1,910 transactions in the third quarter of 2021 – lower than the US $ 36 billion record set in the second quarter of 2021.
– The Asia-Pacific region recorded VC investments of US $ 48.1 billion through 2,616 transactions in the third quarter of 2021 – the second highest quarter of VC investments after the second quarter of 2018.
– VC Global Corporate Investments hit a record $ 85.5 billion in the third quarter of 2021 – boosting annual CVC investments to a record US $ 230.7 billion with a quarter to go close the year.
– The value of divestment business from VC-funded activities fell from a record US $ 399.2 billion in the second quarter of 2021 to US $ 292.4 billion in the third quarter of 2020. The total value exceeded US $ 1 trillion for the first time in history, with the fourth quarter of 2021 not yet completed.
VC investment record in USA, Brazil and Mexico, launching the whole continent to a new high
VC investments in the Americas totaled US $ 94 billion in Q3 2021, thanks in part to record levels of US funding (US $ 82.8 billion) in Brazil (US $ 3.7 billion). and Mexico (US $ 1.4 billion). In Canada, VC investment fell from a record US $ 4.5 billion in the second quarter of 2021 to US $ 2.6 billion in the third quarter of 2021. Although this is a significant decline, investment remains high compared to the historical trend. Together, strong financing across the continent has managed to boost total investment in the region to the new high of US $ 94 billion through 3,934 transactions.
Large transactions remained a key feature of VC investments in the Americas, with eight record transactions of over US $ 1 billion each, 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 to a record high, with a strong quarter for the Asia-Pacific region
The Asia-Pacific region attracted US $ 48.1 billion in VC investments through 2,616 transactions in the second quarter of 2021. China attracted half of that total by raising US $ 23.7 billion during the third quarter. In the first quarter of 2021, China’s central government enacted new rules for tutoring companies and banned all cryptocurrency transactions. Despite these and other regulatory changes, hardware, healthcare and consumer market companies continued to draw large cycles of VC financing in China. In the third quarter of 2021, China’s largest transactions included energy storage company Svolt (US $ 1.58 billion), life sciences company AbogenBio (US $ 700 million) and technology company 5G CICT Mobile (US $ 569 billion) million)
VC investments in India broke all previous records, more than doubling the previous high of US $ 6.7 billion in the second quarter of 2021, to US $ 14.4 billion in the third quarter of 2021. India also set a record 498 VC transactions during the quarter – up from 376 in the previous quarter. India generated four of the largest transactions in the Asia-Pacific region this quarter – including $ 3.6 billion from Flipkart, $ 1.7 billion from Byju, and $ 650 million from Eruditus Executive Education and US $ 570 million from Meesho. Australia and Japan also set quarterly records for VC investment in the third quarter of 2021, with US $ 1.7 billion and US $ 1.4 billion respectively.
The second strongest quarter for VC investment in Europe despite the seasonal slowdown
After breaking the record in the second quarter of 2021 – when more than US $ 36 billion was recorded, VC investments in Europe fell to US $ 27.5 billion in the third quarter of 2021. This decline rather reflects a summer slowdown in trading activity – which dominated in 2021 – as many investors took a break for the first time since the pandemic began. Despite the reduction in total funding, the third quarter of 2021 was the second best quarter ever recorded in Europe. Deinvestment activity was also particularly high, with record import value of US $ 81.2 billion – more than double the previous high of US $ 33.8 billion recorded in the first quarter of 2021.
Regions across Europe continued to attract significant investment. In the third quarter of 2021, the five largest transactions took place in five different regions – with the German Gorillas raising US $ 950 million, followed by the British Revolut (US $ 800 million) and the Estonian Bolt (US $ 709 million). ), the Dutch Picnic (US $ 707 million) and the French Sorare (US $ 680 million). Global investment in the UK reached a record US $ 9.4 billion in the third quarter of 2021 – a slight increase from US $ 9.1 billion in the second quarter of 2021. Switzerland also jumped to the US record $ 1.4 billion, dominated by US $ 553 million raised by Quantus Holding Strategies.
Cleantech in the spotlight
VC investments in ESG (Environment, Society, Governance) and cleantech were very successful in the third quarter of 2021, with many of the largest transactions worldwide including the cleantech or ESG component, including US $ 2.5 billion from electric vehicle maker Rivian, $ 2 billion from Generate Alternative Energy Infrastructure, US $ 1.5 billion from energy storage company Svolt and US $ 766 million from battery recycling company Redwood Materials. ESG’s emerging sectors also continued to gain ground: in the third quarter of 2021, Israeli-based synthetic meat farming company Aleph Farms raised US $ 105 million.
Towards the last quarter of 2021, VC investments are expected to remain particularly strong
VC investments in the fourth quarter of 2021 are expected to remain very healthy, closing an incredible year for VC markets around the world. The continued abundance of capital, the strong fundraising activity, the rapidly maturing VC markets around the world and the growing variety of sectors that attract investment are likely to keep overall investment very strong.
“It has been an impressive year for VC investments, with strong interest in many different areas, including fintech, B2B services, health and biotechnology,” said Conor Moore, Head of KPMG Private Enterprise in America and Partner KPMG in the USA. “One of the most exciting areas of investment this quarter, however, has been cleantech. internationally, there will probably be even more investment in this sector in the next quarter and in 2022 “.
Commenting on the report, Dimitris Lambropoulos, General Manager, Deal Advisory of KPMG in Greece said “The activity of VCs continues to show a special dynamic worldwide due to high liquidity and risk-taking. This trend is expected to be further strengthened by industry-oriented ESG investment, which will reshape the structure of the real economy and financial markets in the near future. ”
.
Source From: Capital
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
