Global VC investment comes roaring back due to a resurgence in mega deals, says KPMG
Global venture capital (VC) deal value increased by 55.3 per cent to USD40.07 billion in Q2 2017, propelled by an uptick in mega-deals around the world, according to Venture Pulse Q2 2017 — the quarterly global VC trends report published by KPMG Enterprise.
Globally, the United States led VC investment, accounting for USD21.8 billion, followed by Asia (USD12.7 billion) and Europe (USD4.1 billion). The increase in funding was strongly affected by a continued resurgence in mega-deals, including Didi Chuxing's record-breaking USD5.5 billion round and Toutiao's USD1 billion Series D round. Globally, there were nine deals at or over USD500 million in value during the quarter including Mobike (USD600 million) from Asia and Outcome Health (USD600 million) from the United States. Europe also saw one of its largest funding rounds ever with Improbable's USD502 million Series B raise.
While deal value increased, the total number of deals fell for the fifth straight quarter in Q2'17. The ongoing decline has affected the earliest deal stages the most, with angel and seed-stage deal count down for the ninth straight quarter – from a high of 2,674 in Q1 2015 to just 1,310 this quarter. In spite of the decline in transaction volume, the venture environment remains healthy and vibrant, with median valuations increasing at all stages of investment on a global level. Late stage valuations, in particular, demonstrated exceptional strength this quarter, leaping from USD175 million in 2016 to USD260 million in 2017, year to date, the largest median increase observed this decade.
"The IPO markets gained strong momentum ending the second quarter which should set up for a strong second half of 2017," says Brian Hughes (pictured), National Co-Lead Partner, KPMG Venture Capital Practice, and a partner for KPMG in the US. "Venture capital invested has improved significantly this quarter, with large deals in Asia, the Americas and Europe."