Global venture capital investment actually rose for the second straight quarter, reaching US$73.2 billion in Q3'20, said KPMG recently when releasing its Q3'20 edition of Venture Pulse report.
The strong level of investment was buoyed by a significant number of large, late stage funding rounds in different jurisdictions, including three US$1 billion+ megadeals: US-based aerospace company SpaceX (US$1.9 billion), China-based automotive company Weltmeister (US$1.5 billion), and India-based online retailer Flipkart (US$1.3 billion), according to the report.
“After several quiet quarters, the IPO market for VC-backed companies rocketed into high gear in Q3'20, with a number of high-profile unicorns making successful exits,” said Conor Moore, Co-Leader, KPMG Private Enterprise Emerging Giants Network KPMG International . “Given the recent filings by several other unicorns, coupled with the explosion of SPAC transactions, Q4'20 looks on-track to continue the record-setting pace.”
VC investment in Asia Pacific continues to recover
VC investment in Asia continued to recover, reaching US$21.1 billion in Q3'20 - up from US$17.2 billion during Q2’20, according to KPMG.
Increasing investment in China helped drive recovery in the region, the company said.
During Q3'20, China accounted for US$14.9 billion in VC investment, including eight of the Asia-Pacific region's largest deals in Q3'20, including $1.5 billion raised by Shanghai-based automotive company Weltmeister, US$830 million raised by JD Health, and US$500 million raised by automotive company Xpeng, according to the report.
VC investment in India also rose significantly quarter-over quarter — from US$1.5 billion in Q2'20 to $3.6 billion in Q3’20, the report adds.
At a sector level, edtech was very strong in India during Q3'20, with numerous deals, including Byju (US$500 million), Unacademy (US$150 million), Eruditus Executive Education (US$113 million), and Vedantu (US$100 million), the report states.
Highlights of Q3 2020
- Global VC investment rose from US$70 billion across 5,674 deals in Q2'20 to US$73.2 billion across 4,861 deals in Q3'20.
- The number of individual VC deals, however, dropped for the sixth straight quarter, dropping to the lowest volume seen since Q4'13.
- VC investment in Europe reached a new record of US$12.1 billion across 1,024 deals in Q3'20 - up from US$11.5 billion across 1,513 deals in Q2'20.
- VC investment in the Americas remained relatively steady quarter-over-quarter, with US$40 billion invested across 2,477 deals. The US accounted for US$37.8 billion of this investment and 2,285 of the deals.
- Asia Pacific saw US$21.1 billion in investment across 1,285 deals in Q3'20 - up from US$17.2 billion across 1,207 deals in Q2'20.
- Global corporate VC investment held steady for a third straight quarter, accounting for US$33.6 billion across 1,148 deals in Q3'20.
- VC-backed exit activity rose to US$156 billion during Q3'20 - up from just US$49.2 billion in Q2'20 and nearing the record high of US$171 billion set in Q2'19.
- The number of global angel/seed stage deals in Q3'20 (1,650) was the lowest seen since Q4'2012, while the number of global early stage deals (1,716) was the lowest seen since Q2’2014.