2018 sees VC investment record set

BY Richard Summerfield

Venture capital (VC) funding has continued to pour into jurisdictions the world over, with 2018 seeing a record high of $255bn invested globally, according to KPMG’s Enterprise Venture Pulse Report. The fourth quarter of 2018 alone saw almost $64bn.

Activity was not limited to just one jurisdiction. The US, the wider Americas, Asia and Europe all recorded a record high level of annual VC investment during 2018.

“The record levels of funding we are seeing around the world highlight the intense focus VC investors are placing on late-stage deals. One billion+ mega-deals alone in Q4 2018 accounted for $22 billion in investment – approximately a third of the total funding raised this quarter,” said Brian Hughes, national co-lead partner at KPMG Venture Capital Practice, and a partner with KPMG in the US.

He continued: “While the extended decline in the number of deals, particularly at the earliest deal stages, is somewhat concerning, the highest quality companies are still attracting investment and we expect to see a strong IPO market in 2019.”

Across the Americas, VC investment rose to $41.8bn in Q4 2018, up from $32.5bn in Q3. For the third year running, Europe set new records for VC investment (despite ongoing uncertainty around Brexit) with a total of $24.4bn for 2018, although deal volume fell markedly year-on-year.

In Asia, VC investment reached an annual high of $93.5bn during 2018 – a significant increase on the $65.2bn recorded in 2017.

Looking forward, activity seems likely to drop this year, however there should still be significant investment, particularly in the tech space where autonomous vehicles, alternative energy vehicles and ride hailing continue to garner interest.

Despite the increase in investment value, the total number of VC deals globally declined to a six year low of 15,299 deals during 2018, compared to 17,314 in 2017 and a peak high of 20,172 in 2015. The drop in quarterly deal volume was also notable, with the 3048 deals seen in Q4 2018 the lowest number since Q3 2012.

Report: Venture Pulse Q4 2018

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