Recently, KPMG Enterprise in partnership with CB Insights released our Q3-2015 Venture Pulse Report – highlighting key trends and information relating to venture capital investment globally and in key regions around the world.
Globally, what we found is that venture capital investment continues to rise. In Q3-2015, venture capital (VC) backed companies raised $37.5 billion dollars in investment. This brings total VC investment for 2015 to $98.3 billion in the first three quarters of the year alone. That’s 11 percent more than all of the VC-backed investment in 2014, and 100 percent higher than all of the VC-backed investment in 2013.
When you look at the deals making the news, it’s strongly apparent that VC investors are continuing to focus on big deals. In Asia, Didi Kuadi raised $3 billion alone – making it the biggest deal this quarter. But a number of other significant rounds also made headlines globally, including Uber, Palantir Technologies and Social Finance.
With the total number of deals down compared to Q2, deal size is making up the difference and then some. In Q3, mega-rounds drove a substantial part of deal activity, with 10 $500m+ rounds and over 60 rounds in total.
On the late stage deals front, Asia far exceeded the US and Europe – primarily thanks to investments in the on demand and e-commerce space. Some of Asia’s rise may be a result of VC investors looking to Asia as a high growth market for disruptive business models that have already saturated the North American market. For example, many investors believe that on demand food delivery services in the US have reached a saturation point, while food delivery service Ele.me reached unicorn status in China during Q3.
The fact VC investors are focusing on big deals, along with the continued availability of late stage deals, may be spurring the continued growth in unicorns: VC-based companies that have achieved a valuation above $1 billion. In Q3, there were 23 new unicorns globally, including 17 in the US, 3 in Asia and 3 in Europe.
Looking at investments from an industry perspective, it’s no surprise that internet and mobile technologies continue to dominate the VC deals space. At the same time, healthcare is quickly becoming a key industry to watch. In Q3 alone, Immunocore and other healthcare deals (e.g. Helix, Stemcentrx, ZocDoc) grabbed significant investor attention. We expect momentum to continue to grow in the healthcare space over the next few quarters.
Over the next few blog posts, we will explore many of the findings from our Q3 Venture Pulse Report, and explore some of the more interesting trends we are seeing in key regions of the world. If you’d like to see the Q’2 and Q’3 report, please visit our Venture Pulse Report website.
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As Co-Chair of the KPMG Enterprise Global Innovative Startups Network, Mr. Arik Speier is responsible for setting the vision and strategy for KPMG’s global initiatives as it relates to working with the innovation ecosystem, including entrepreneurs, fast growing venture backed companies.
Mr. Arik Speier is also head of the technology practice in Israel, where has significant experience serving both private and public companies in the United States and in Israel. He has been an audit and business advisory partner since 2001 and has gained vast experience auditing and consulting U.S. SEC registrants, private clients, venture capital and investment funds (including advising on IPO and M&A transactions).