SINGAPORE (Jan 18): Singapore closed 2017 with US$1.2 billion ($1.6 billion) worth of venture capital (VC) investments across 112 deals, with exit value of investments reaching US$1.6 billion across eight exits and a total of US$732.9 million raised from seven funds.
According to KPMG’s 4Q17 edition of Venture Pulse, a quarterly report on global VC trends published by KPMG Enterprise, this comes despite a 41.4% q-o-q decline to US$205 million of investments over 4Q, with 2Q17 remaining the strongest performing quarter for the city state after booking US$724.3 million invested across 33 deals.
In a media release on Thursday, KPMG notes that that Singapore had maintained “historically healthy tallies by and large” barring 4Q17’s lower volume, with the tech sector still producing quite a few peaks in VC investments.
Globally, 4Q VC fundraising rose to US$46 billion such that full-year contributions surged to a new annual of US$155 billion, the highest in a decade. Asia saw a total of US$15.6 billion in VC investments, while Europe clocked a new quarterly high of US$5.7 billion in 4Q.
KMPG highlights that the latest quarter’s global VC investments were buoyed by six mega-deals exceeding US$1 billion each in value, as well as numerous US$10 million-plus deals in all major markets. In particular, artificial intelligence (AI) and machine-learning saw a massive US$4.1 billion in global investments over 4Q17, compared to just US$3.1 billion the quarter before.
Companies based in China and the US dominated 4Q’s list of top 10 deals, with each country accounting for five of the largest deals including China’s Didi-Chuxing and online retail services provider Meituan-Dianping.
Other big winners notably comprised automotive-focused companies such as ride hailing company Lyft and electric car manufacturers Nio and Faraday Future, which joined Didi-Chuxing in raising US$1 billion-plus rounds.
Moving forward, KPMG sees a likely uptick in VC fundraising this year as VC firms globally look to create larger global funds than they have in the past, in response to competition from the US$100 Softbank Vision Fund.
The professional services firm expects this year’s investment rounds to be driven by the continued rapid growth of areas like healthtech, biotech and autotech, with newer areas such as foodtech and agtech expected to gain traction in the year ahead.
“Globally and in Singapore, we can expect to see cross-industry solutions being a key focus of VC investors heading into the next few quarters... The tech sector will also continue to take a lion’s share of overall investments,” says Chia Teck Yew, Head of Financial Services Advisory, KPMG in Singapore.
Based on Chia’s observations, more private and seed/Series A corporate VC funds are on the rise in Singapore and many are now “ready to make their bets”.
As such, he expects deal activity in Singapore to remain robust in 2018, along with VCs that are regrouping to focus on Series B to D deals as well as the continued trend of late-stage transactions, with investors placing larger but safer bets on companies with “proven business models and the strongest path to profitability”.
Concludes Chia: “Looking ahead, Singapore companies are also likely to be more aggressive in seeking earlier and larger rounds of funding from the local, US, China and overseas markets. All these developments will continue to drive global and local VC investment and momentum to the next level.”
