• Global corporate VC investment surpasses previous annual record at end of Q3’21 – accounting for $230.7 billion YTD.
• VC investment in India smashed previous records, more than doubling from its previous quarterly high of $6.7 billion in Q2’21 to $14.4 billion during Q3’21.
• India accounted for four of the largest deals in the Asia-Pacific region this quarter.

This year’s healthy level of Global VC investment showed no signs of stopping in Q3’21, setting a record for the third-straight time with $171.7 billion across 8,682 deals. An incredible amount of dry powder, increasing participation by less traditional VC investors, and robust exit opportunities helped keep the VC market very healthy according to the Q3’21 edition of Venture Pulse – a quarterly report published by KPMG Private Enterprise on VC trends globally and in key jurisdictions around the world.

A record 11 deals at or over $1 billion during the quarter helped propel VC investment to the new high. Global exit activity remained robust – with $292 billion in exit value across 780 deals in Q3’21. 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.

Key Global Highlights – Q3’21

• VC investment in the Americas reached a third-straight record high, with $94 billion invested across 3,934 deals. The US accounted for $82.8 billion of this investment and 3,518 of the deals.
• VC investment in Europe remained strong, with $27.5 billion of investment across 1,910 deals in Q3’21 – down from the record $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 a record $399.2 billion in Q2’21 to $292.4 billion during Q3’21. Total annual exit value passed the $1 trillion for the first time ever with Q4’21 still to come.

Key highlights from India

• India sets an all-time high for VC invested
• India saw a record 498 VC deals during the quarter – up from 376 the previous quarter
• Investors outside traditional VC firms took part in a number of deals in Q3’21 – including traditional PE firms, which have not historically been active in consumer tech deals in India
• IPO activity was also very strong in India in Q3’21, with indications Q4’21 will be even stronger
• Edtech was an active sector during the quarter. Fintech also continued to attract significant investment and attention from investors in India. 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.

Nitish Poddar, Partner and National Leader, Private Equity, KPMG in India says, “The money pouring into consumer tech companies, D2C companies, fintech companies and others here in India only going to get stronger. Already we have had more unicorns this year than in the last seven or eight years put together. Looking forward, there are a few big IPOs coming down the pipe and, assuming they go well, that is only going to strengthen investor confidence here even further.”

Amarjeet Singh, Partner, KPMG in India says, “We are seeing a lot of strategic investments in India – not only from global corporates looking to get into the market, but also from some of the larger Indian conglomerates. Over the last few quarters, we’ve seen big companies focusing on investing in and acquiring other companies and startups in different areas. They are slowly trying to move into the area of something called the super app: an app that fits all the purposes that a consumer might need.”

Cleantech hits the big time

VC investment in ESG and cleantech hit the big time in Q3’21, with many of the largest deals globally having a cleantech or ESG element. Emerging ESG areas also continued to gain traction; in Q3’21. Investor interest in ESG and cleantech is expected to keep growing.

Heading into final quarter of 2021, VC investment expected to remain very strong

VC investment in Q4’21 is expected to remain very healthy, bringing an end to an incredible year for VC markets around the world. The continued abundance of capital, robust fundraising activity, rapidly maturing VC markets around the world, and a growing diversity of sectors attracting investment will likely keep total investment very strong.

The report PDF is attached for your perusal. In case of further clarifications, please get in touch.