Venture capital investment records $170 billion in third-straight quarter

The global venture capital (VC) investment rose in the third-quarter after setting a record for the third-straight time with $171.7 billion across 8,682 deals.

An increased amount of dry powder (marketable securities that are highly liquid and considered cash-like), participation by less traditional VC investors, and exit opportunities helped the VC market very healthy, according to Venture Pulse, a quarterly report published by KPMG Private Enterprise.

The market saw a record 11 deals over $1 billion during this time which propelled it to a new high. Global exit activity remained positive with $292 billion in exit value across 780 deals in Q3’21, it added.

This helped propel YTD totals over $1 trillion more than double the previous high of $468 billion (set in 2020) with one quarter left in the year.

Global VC highlights of Q3

• VC investment in the Americas reached a third-straight record high with $94 billion invested across 3,934 deals
• VC investment in Europe dropped to $27.5 billion across 1,910 deals in Q3’21 from $36 billion seen in Q2’21
• The Asia-Pacific region saw $48.1 billion in VC investment across 2,616 deals in Q3’21 – the second highest quarter of VC investment after Q2’18.
• Global corporate-affiliated VC investment reached a record $85.5 billion in Q3’21 – propelling annual CVC-related investment to a record $230.7 billion with a quarter left in the year
• VC-backed exit value fell from $399.2 billion in Q2’21 to $292.4 billion during Q3’21

Indian VC highlights of Q3

• India sets an all-time high for VC invested
• India saw a record 498 VC deals during the quarter – up from 376 in the previous quarter
• IPO activity was also very strong in India in Q3’21, with indications Q4’21 will be even stronger
• Edtech and Fintech continues to attract significant investment and attention from Indian investors
• While payments continued to attract the most fintech investments in India, VC investors have also shown strong interest in the insurtech space given the low penetration of insurance in the country compared to other jurisdictions around the world

VC are after ESG and cleantech as some of the largest deals globally includes a cleantech or ESG element. Emerging ESG areas also continued to gain traction in Q3’21, KPMG said.

The outlook is expected to remain healthy after an abundance of capital, fundraising, rapidly maturing VC markets around the world, and a growing diversity of sectors has attracted investment.