Global Venture Capital Investments (VCs) in the first quarter of 2022 reached US $ 144.8 billion, higher than most quarters – with the exception of the four consecutive 2021 record quarters – thus recording a strong result despite the fall, according to the report Venture Pulse for the first quarter of 2022.
The quarterly report published by KPMG Private Enterprise contains analyzes of major VC transactions and trends worldwide. While overall investment remained strong, the number of VC transactions decreased significantly – from 10,775 in the fourth quarter of 2021 to 9,349 in the first quarter of 2022 – as the combination of geopolitical and economic factors created intense uncertainty. at the market.
The Russo-Ukrainian War, rising inflation and interest rates, global capital market turmoil, continuing supply chain management challenges and rising COVID-19 cases in several regions have contributed to the slowdown in more prudence and focused more on due diligence.
VC investment in both the Americas and Asia fell in the first quarter of 2022. VC investment in the Americas shrank from US $ 103.3 billion in the fourth quarter of 2021 to US $ 77.6 billion in the first quarter. VC investment in Asia fell from US $ 55.2 billion to US $ 32.6 billion in Europe alone of 2021 to US $ 31.7 billion in the first quarter of 2022.
After a record year of divestment transactions, their value in the first quarter of 2022 fell more than 60% on a quarterly basis, to just US $ 122.3 billion through 684 transactions, compared to US $ 344.2 billion through 941 transactions in the fourth quarter of 2021.
“The start of the year for global capital markets has been episodic, closing the door on most IPOs at the moment,” said Conor Moore, Head of KPMG Private Enterprise in the Americas and KPMG Partner in the USA. “Given the increased geopolitical intensity, as well as changing macroeconomic factors, such as interest rates and inflation, the number of IPO transactions is likely to remain low as we enter the second quarter of 2022.”
Commenting on the report, Dimitris Lambropoulos, Partner, Deal Advisory of KPMG in Greece said: “Unfortunately, the negative assessments regarding the significant impact of the ‘perfect storm’ on negative geopolitical developments, supply chain disruption and high inflation However, their ability to effectively assess the risk taken and to make decisions quickly makes them suitable vehicles for identifying and exploiting investment opportunities that emerge in such a fluid environment, in which case their actions in the near future will depend from the pressure to achieve a certain range of returns in relation to the managed funds in a predetermined time horizon “.
Key points – first quarter 2022
Global VC investment fell from a high of US $ 191.9 billion through 10,775 transactions in the fourth quarter of 2021 to US $ 144.8 billion through 9,349 transactions in the first quarter of 2022.
VC investments in the Americas fell from US $ 103.3 billion through 4,628 transactions in the fourth quarter of 2021 to US $ 77.6 billion through 4,138 transactions in the first quarter of 2022. From the US came US $ 70 , 7 billion of the first quarter 2022 investments of the American continent (US $ 95.4 billion in investments in the fourth quarter of 2021).
VC investments in Asia fell from US $ 55.2 billion through 3,139 transactions in the fourth quarter of 2021 to US $ 32.6 billion through 2,712 transactions in the first quarter of 2022.
In Europe, there was a small increase in VC investments during the first quarter of 2022, attracting US $ 31.7 billion through 2,219 agreements, compared to US $ 31.5 billion through 2,705 agreements in the fourth quarter of 2021.
VC funding for the first time was marginal in the first quarter of 2022, reaching just US $ 12.6 billion.
– Corporate Venture Capital (CVC) investments in Europe increased to US $ 14.4 billion in the first quarter of 2022 compared to US $ 12.5 billion in the fourth quarter of 2022. CVC investments in America fell from US $ 43.7 billion to US $ 30.8 billion, while also declining in Asia – from US $ 33.3 billion to US $ 18.2 billion on a quarterly basis.
– The value of divestment transactions decreased significantly on a quarterly basis, to US $ 122.3 billion in the first quarter of 2022 compared to US $ 344.2 billion in the fourth quarter of 2021.
Seven countries attract the ten largest VC transactions highlighting geographical diversity
The number of transactions worth more than US $ 1 billion and more decreased to two during the first quarter of 2022 (Altos Labs, Checkout.com), both of which took place in the first three weeks of the quarter, before the start of the Ukraine crisis. The reduction in US $ 1 billion or more has helped to highlight the range of countries that are now attracting large VC transactions. Companies from seven countries attracted the ten largest transactions this quarter, including the US (Altos Labs – US $ 3 billion, Flexport – US $ 935 million, Ramp – US $ 750 million), the United Kingdom (Checkout. com – US $ 1 billion), Germany (Wefox – US $ 871 million), India (Byju – US $ 800 million), China (JD Property – US $ 800 million), Changan New Energy Vehicles Technology – US $ 781 million), Turkey (Getir – US $ 768 million) and Estonia (Bolt – US $ 710 million).
Despite the decline, VC investment in the Americas remains strong – Canada records its second best quarter
Investment in the Americas reached US $ 77.6 billion in the first quarter of 2022. Of this, US $ 70.7 billion was recorded in the US – as well as the continent’s top three transactions for this quarter, such as US $ $ 3 billion from Altos Labs, a biotechnology company for cellular rejuvenation, US $ 935 million from Flexport, a logistics company and US $ 750 million from Ramp, a business management and support company.
Canada recorded the second best quarter for VC investments in the first quarter of 2022, attracting US $ 3.4 billion in investments, including US $ 650 million raised by cybersecurity company 1Password. After two astonishing quarters – including a record US $ 3 billion in the third quarter of 2021 – VC investments in Brazil fell to US $ 1.5 billion in the first quarter of 2022. Despite the sharp decline, This quarter marked the third highest level of VC investment ever recorded in Brazil.
Investments worth US $ 31.7 billion for Europe in the first quarter of 2022
Europe attracted US $ 31.7 billion in VC investments during the first quarter of 2022, a marginal decrease compared to US $ 31.5 in the fourth quarter of 2021. Six different countries attracted the top 6 financial cycles in Europe in the quarter this. US $ 1 billion raised by UK payment company Checkout.com was the largest for the first quarter of 2022, followed by US $ 871 million from German insurtech Wefox and US $ 768 million from Turkish delivery company Getir , US $ 710 million from the Estonian Bolt platform, US $ 566 million from the Finnish business productivity company Relex and US $ 557 million from the French healthtech Doctolib.
The United Kingdom attracted the most VC investments in Europe in the first quarter of 2022, worth more than US $ 9 billion. VC investments in France increased to a record US $ 5.6 billion, which is the largest amount of financing in area. Germany, Israel and the Nordic countries attracted US $ 3.8 billion, US $ 2.9 billion and US $ 2.8 billion respectively.
Fall in VC investment in the Asia-Pacific region
VC investment in Asia fell to a six-quarter low of US $ 32.6 billion this quarter amid global geopolitical uncertainty, macroeconomic factors and growing concerns about developments in China’s ongoing regulatory environment. No more than US $ 1 billion was traded in the region in the first quarter of 2022.
Among the largest transactions were US $ 800 million in financing by Indian education technology company Byju and Chinese real estate technology company JD Property, US $ 784 million by Chinese Changan New Energy Vehicles Technology and US $ 700 million by the Indian food delivery company Swiggy. In addition to India and China, major rounds of funding this quarter were also completed by Singapore-based Princton Digital Group ($ 505 million) and Korea-based Megazone Cloud ($ 442.1 million).
Liquidity is expected to help the VC market remain stable despite growing uncertainty
Despite the strong uncertainty affecting the VC market worldwide, VC investments are expected to remain relatively stable in the second quarter of 2022 thanks to the significant available stock of funds to be invested. VC investors may continue to be prudent, focusing on advanced companies and trades that are definitely considered bets. This could be a particular concern for start-ups looking for their first financing or in the early stages of development.
“It’s a bit early to predict the impact of the Russo-Ukrainian war on the global VC market, although investors are likely to remain conservative in the second quarter of 2022 and beyond,” said Jonathan Lavender, Global Head of KPMG Private Enterprise. “Despite the uncertainty, VC investments appear to remain stable thanks to the abundant funds available in the market. Significant amounts of VC funds have been raised in recent quarters and this funding is looking for attractive targets for its placement.”
You can find the KPMG Venture Pulse exhibition here.
Source: Capital
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