SINGAPORE (Apr 11): Venture capital (VC) investment in 2018 had a rousing start, with US$49.3 billion ($64.5 billion) raised across 2,661 deals in 1Q, just shy of the global record for a single quarter, according to KPMG’s quarterly report on global VC trends, Venture Pulse Q1 2018.
A record-breaking US$29.4 billion of investment in the Americas – including US$28.2 billion in the US alone – combined with high investment in Asia helped fuel the strong VC market.
Despite venture capital deals declining, the median deal size globally has been continuously increasing across all deal stages during the quarter, reaching US$1.3 million for angel and seed stage rounds, US$7.7 million for early stage rounds, and US$15 million for later stage rounds.
Brian Hughes, national co-lead partner of KPMG Venture Capital Practice, and a partner for KPMG in the US says, “Venture capital investors continue to pour money into late-stage companies, in part because of the number of aging unicorns that have remained private.”
During the quarter, the spotlight was on the ride-hailing industry, which attracted massive VC investment and accounted for four of the quarter’s five largest deals.
The deals include US$2.5 billion raised by Singapore-based Grab, US$1.7 billion raised by US-based Lyft, US$1.5 billion raised by Indonesia-based Go-Jek, and US$1.25 billion raised by US-based Uber.
Electric car manufacturer Faraday Future rounded out the top five, raising US$1.5 billion.
The Asian market saw remarkably high deals in 2017, and this continued on to 2018. 18. These include two megadeals worth more than US$1 billion, which were struck outside China, with Singapore-based Grab’s Series G financing and Go-Jek in Indonesia’s Series E round.
Chia Tek Yew, Head of financial services advisory of KPMG, “Singapore saw a record US$2.68 billion of VC investment in Q1 2018, despite a relatively muted level of activity. It is testament to the maturing of Singapore’s ecosystem that a business such as Grab could be built here to tackle the regional market. In addition, the top deals in Singapore also span across diverse sectors, from logistics, internet retail to biotechnology.”
The VC activity globally is expected to remain strong heading into 2Q18, with an increasing focus on artificial intelligence (AI), autotech, and healthtech. With exit and IPO activity also expected to increase over the next few quarters, there will likely also be a renewal of activity at the earliest deal stages.
In Asia, AI is expected to be one of the biggest bets for the foreseeable future, with activity occurring in a number of jurisdictions, including Singapore, China and Indonesia. Healthtech and edtech are also expected to gain more attention from investors over the next few quarters.
Meanwhile, a number of new technology sectors are also expected to see continued consolidation over the next few quarters – particularly bike sharing – in China.
