The KPMG report also revealed that China has amassed over 80 per cent of total capital invested in Asia
A quarterly global venture capital (VC) report by KPMG Enterprise —the Venture Pulse Q2 2017— revealed that global VC deal value has increased by 55.3 per cent from US$25.8 billion to US$40.1 billion in the second quarter of 2017.
The numbers were propelled by an uptick of “mega-deals” in many parts of the world, though the US remained in leading position with US$21.8 billion.
Asia followed suit in second position with US$12.7 billion, while Europe tagged along in third position with US$4.1 billion. The Asia number was a 130 per cent increase from from US$5.4 billion in Q1.
Recent mega-deals such as Didi Chuxing’s US$5.5 billion funding round and Toutiau’s US$1 billion round, combined with a number of US$100 million+ rounds, was reported to have affected Asia’s position positively.
As for the investment stage, Asia has seen a soaring number of Series D+ investments, from 26 per cent of total capital invested in 2016 to 45 per cent in Q2.
However, it is also important to note that though deal value has increased, the total number of deals fell for the fifth straight quarter in Q2 2017.
“While the low deal count, particularly at early deal-stages remains concerning, strong fundraising bodes well for continued strength in VC investment for the remainder of 2017,” said Arik Speier, Head of Technology, KPMG Somekh Chaikin in Israel, in a press statement.
The report also saw a decreasing number of early-stage investment at a global level. Angel and seed stage deal count down for the ninth straight quarter from a high of 2,674 in Q1 2015 to just 1,310 in Q2 2017.
Late stage valuations also leap from US$175 million in 2016 to US$260 million in 2017; according to the report, year to date, it is the largest median increase observed this decade.
China still rules
Globally, the report saw nine deals at or over US$500 million in value in Q2 2017, and this number includes Mobike’s US$600 million round.
It confirmed China’s position at the forefront of VC investment in Asia. The country has amassed over 80 per cent of total capital invested in Asia, with over US$10 billion in capital raised by VC-backed companies.
In the Southeast Asian region, Singapore recorded US$725.3 million with 26 deals recorded.
“The US$550 million mega-round raised by Singapore-based Sea (formerly Garena) helped skew total VC invested in Singapore to the second-highest in the past five and a half years. This underscores the importance of mature companies fundraising within a developing venture ecosystem such as Singapore,” said Chia Tek Yew, Head of Financial Services Advisory, KPMG in Singapore.
Popular sectors for VC investment in Asia in Q2 2017 were artificial intelligence, robotics, fintech, edutech, and healthtech. Cloud and infrastructure services are also gaining momentum, together with bike-sharing services.
The report predicted that deep tech, autotech, and healthtech will continue to gain investors’ interest.
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