The year’s healthy level of Global VC investment showed no signs of stopping with Q3 2021, setting a record for the third-straight time with USD171.7 billion across 8,882 deals.
An incredible amount of dry powder, increasing participation by less traditional VC investors, and robust exit opportunities helped keep the VC market very healthy, according to the Q3’21 edition of Venture Pulse – a quarterly report published by KPMG Private Enterprise on VC trends globally and in key jurisdictions around the world.
A record 11 deals at, or over USD1 billion during the quarter helped propel VC investment to the new high. India-based Flipkart raised USD3.6 billion in the largest deal of Q3’21, with many of the other larger deals globally having a cleantech or ESG element, including the USD2.5 billion raise by US-based electric vehicle manufacturer Rivian and USD2 billion raise by alternative energy infrastructure company Generate.
The Americas accounted for more than half of the global VC investment total, with a record USD94 billion in funding during Q3 2021. The US accounted for USD82.8 billion of this total – also setting a new quarterly record. VC investment in the Asia-Pacific region reached USD48.1 billion in its best quarter since Q2 2018 and its second-highest quarter of VC investment ever. After a record Q2 2021, VC investment in Europe dipped slightly to USD27.5 billion primarily due to a summer slowdown during which many dealmakers took vacation for the first time since the pandemic began.
Global exit activity remained robust – with USD292 billion in exit value across 780 deals in Q3 2021. This helped propel YTD totals over USD1 trillion – more than double the previous high of USD468 billion (set in 2020) with one quarter left in the year.
“The word ‘record’ has been a recurring theme each quarter when it comes to reporting on global VC investment and CVC investment, not to mention VC investment in many jurisdictions,” says Kevin Smith Head of KPMG Private Enterprise in EMA, and Partner at KPMG in the UK, “The reality is that 2021 has been a magical year for the VC market globally and we’re not done yet.”
VC investment in Q4’21 is expected to remain very healthy, bringing an end to an incredible year for VC markets around the world. The continued abundance of capital, robust fundraising activity, rapidly maturing VC markets around the world, and a growing diversity of sectors attracting investment will likely keep total investment very strong.
“It’s been an impressive year for VC investment, with robust interest in many diverse sectors including fintech, B2B services and healthcare and biotech,” says Conor Moore, Head of KPMG Private Enterprise in the Americas region, and Partner at KPMG in the US. “One of the most exciting areas of investment this quarter, however, was cleantech. Given the increasing global interest in ESG, the incredible importance of climate change and reducing GHG emissions, and COP26 centre of the world stage in November there will likely be even more investment in this space over the next quarter and into 2022.”
