Global venture capital investment slows, but market remains strong | Business

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NEW YORK–(BUSINESS WIRE)–April 20, 2022–

Global venture capital investment in the first quarter of 2022 reached $144.8 billion, more than anything but the record four consecutive quarters seen in 2021 – which delivered a robust result, despite the decline, according to the KPMG’s Venture Pulse report, covering the first quarter of 2022.

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The first quarter of 2022 is in the books. Although significant volatility and major concerns have emerged given the growing ripple effects of the Russian-Ukrainian war, as well as ongoing geopolitical tensions and issues with supply chains around the world, investment in venture capital remained remarkably robust. (Graphic: Business Wire)

The quarterly report, published by KPMG Private Enterprise, analyzes top venture capital deals and trends globally in major jurisdictions around the world. While total investment remained strong, the number of VC deals dropped significantly – from 10,775 deals in Q4’21 to 9,349 in Q1’22 – as geopolitical and economic factors combined to create a storm of uncertainty in the market.

The Russian-Ukrainian war, rising inflation and interest rates, turmoil in global capital markets, ongoing supply chain challenges and a surge in COVID-19 cases in a number jurisdictions likely contributed to a slowdown in trading activity as venture capitalists strengthened. their caution and focused more on due diligence.

Venture capital investment declined in the Americas and Asia in Q1’22. Venture capital investments in the Americas fell from $103.3 billion in Q4’21 to $77.6 billion in Q1’22, while venture capital investments in Asia fell by 55.2 billion to $32.6 billion. Only Europe bucked the downward trend, recording a modest increase from $31.5 billion in Q4’21 to $31.7 billion in Q1’22.

After a banner year for exits, Q1’22 saw exit value fall by more than 60% quarter over quarter – with just $122.3 billion in exit value across 684 transactions, compared to $344.2 billion in exit value across 941 trades in Q4’21.

“Capital markets globally have had a rocky start to the year, which has effectively closed the door to most IPO activity for the time being,” said Conor Moore, head of KPMG Private Enterprise in the Americas region and partner of KPMG in the United States. “Given heightened geopolitical tension in addition to shifts in macro factors such as interest rates and inflation, IPO activity is likely to remain weak heading into Q2’22.”

Main Highlights – Q1’22

  • Global venture capital investment fell from a high of $191.9 billion across 10,775 deals in Q4’21 to $144.8 billion across 9,349 deals in Q1’22.
  • Venture capital investment in the Americas grew from $103.3 billion across 4,628 deals in Q4’21 to $77.6 billion across 4,138 deals in Q1’22. The United States accounted for $70.7 billion of investment in Q1’22 in the Americas ($95.4 billion of investment in Q4’21).
  • Venture capital investments in Asia grew from $55.2 billion across 3,139 deals in Q4’21 to $32.6 billion across 2,712 deals in Q1’22.
  • Europe saw a slight increase in venture capital investment in Q1’22, attracting $31.7 billion from 2,219 deals, compared to $31.5 billion from 2,705 deals in Q4’21.
  • First global venture capital funding was weak in the first quarter of 2022, amounting to just $12.6 billion.
  • Investments affiliated with CVC increased in Europe to $14.4 billion in Q1’22 from $12.5 billion in Q4’22. Investments by CVC participants in the Americas fell from $43.7 billion to $30.8 billion, while Asia-based CVC also fell – from $33.3 billion to $18.2 billion from one quarter to the next.
  • Exit value fell significantly quarter over quarter, with $122.3 billion in exit value in Q1’22, compared to $344.2 billion in exit value in Q4’21.

Seven countries attract top ten venture capital deals – highlighting geographic diversity

The number of billion-plus mega-deals fell to 2 in the first quarter of 2022 (Altos Labs, Checkout.com) – with both deals occurring in the first three weeks of the quarter, before the start of the crisis in Ukraine. The drop in deals of $1 billion and above helped highlight the breadth of countries that are now attracting large venture capital deals. Companies from seven countries attracted the ten largest deals this quarter, including the United States.

Americas saw $77.6 billion in investments during Q1’22. The United States accounted for $70.7 billion of that total — and for the three largest deals in the Americas this quarter, including a $3 billion raise by cell regeneration-focused biotech Altos Labs, an increase of $935 million by the logistics company Flexport and an increase of $750 million. raised by business management company Ramp.

Europe attracted $31.7 billion in venture capital investment during the first quarter of 2022, a slight increase from the $31.5 billion in deal value seen in the fourth quarter of 2021. Six different countries have attracted the first 6 funding rounds in Europe this quarter. UK-based payments company Checkout.com’s $1 billion rise was the largest in the first quarter of 2022, followed by an $871 million rise by German insurtech Wefox, d ‘a $768 million increase by Turkish delivery company Getir, a $710 million increase by Estonia-based payment platform Bolt, a $566 million increase by the Finnish company productivity boost from Relex companies and a $557 million boost from French health tech Doctolib.

Meanwhile, venture capital investments in Asia fell to a six-quarter low of $32.6 billion in the first quarter of 2022, due to global geopolitical uncertainty, macroeconomic factors and lingering regulatory concerns in China. The region recorded no transactions over $1 billion during the quarter. The biggest deals included $800 million raises by Indian edtech Byju and Chinese proptech JD Property, a $784 million raise by China-based Changan New Energy Vehicles Technology and a $700 million raise by Indian food delivery company Swiggy. Outside of India and China, Singapore-based Princton Digital Group ($505m) and Korea-based Megazone Cloud ($442.1m) also raised big rounds this quarter.

Dry powder expected to help keep VC market stable despite growing uncertainty

Despite the significant uncertainty plaguing the global venture capital market, venture capital investment is expected to remain relatively stable in Q2’22 thanks to a significant amount of dry powder. Venture capitalists will likely continue to be cautious, focusing on late-stage companies and proven bets. This could worry startups seeking early funding or in the early stages of their growth trajectory.

“It is a bit early to predict the effect the Russian-Ukrainian war will have on the broader venture capital market, although caution will likely be in order for investors in Q2’22 and beyond,” said Jonathan Lavender, Global Head, KPMG Private Enterprise. “Despite the uncertainty, venture capital investments will likely remain stable given the amount of capital available in the market. There have been a lot of venture capital funds raised in recent quarters and this funding will be seeking of a house.

About KPMG Private Enterprise You know KPMG, you may not know KPMG Private Enterprise. We are committed to working with businesses like yours. That’s all we do. Whether you’re an entrepreneur, a family business or a fast-growing business, we understand what’s important to you.

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See the source version on businesswire.com: https://www.businesswire.com/news/home/20220419006048/en/

Daniel Caines, Senior Manager, Global External Communications T: +44 7732400262 E:[email protected]

KEYWORD: NEW YORK UNITED STATES NORTH AMERICA

INDUSTRY KEYWORD: PROFESSIONAL SERVICES VENTURE CAPITAL FINANCING

SOURCE: KPMG International

Copyright BusinessWire 2022.

PUBLISHED: 04/20/2022 00:01 / DISK: 04/20/2022 00:02

http://www.businesswire.com/news/home/20220419006048/en

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