Demand for venture capital deals remained strong in the third quarter of 2018 with U$52 billion invested globally.
That takes the total invested year-to-date to $183.3 billion, the highest ever for the first 9 months of a year after beating the previous record of $171 billion reached in 2017.
KMPG International’s Venture Pulse Q3 2018 report says that, although the quarterly total was lower than the $73 billion invested in VC in the second quarter, that quarter had included an outlier investment of $14 billion in Ant Financial.
"Globally, the amount of venture capital invested has already surpassed 2017's annual total – driven in large part by ever increasing deal sizes. However, this quarter we continued to see a decline in the volume of seed and angel investments, particularly in Europe and Asia," said Arik Speier, Head of Technology, KPMG Somekh Chaikin in Israel.
Stronger performance for Canada
Overall, there were 3,045 deals with Asia dominating the top global deals in Q3, with eight of the top 10 deals, including Grab ($2 billion), Bitmain ($1 billion), and Oyo Rooms ($1 billion).
Canada and Latin America have seen stronger performance across fewer deals in 2018 to date—$4 billion by the end of Q3 on 462 deals versus $3 billion in all of 2017 on 624 deals.
The US saw strong continued VC activity, with the $27.86 billion invested in Q3'18 on pace with the $27.6 billion invested in Q2. Venture capital investment in the US totaled $84 billion for the first three quarters of 2018, already surpassing 2017's total of $82 billion—and there is still another quarter ahead.
Strong finish expected
There was a resurgence in IPO activity globally in the third quarter and this is expected to continue.
“As the IPO market continues to deliver strong returns to investors, we should expect to see further IPO activity in coming quarters," said Brian Hughes, National Co-Lead Partner, KPMG Venture Capital Practice, and a partner for KPMG in the US. “Global venture capital activity is expected to remain strong heading into Q4'18, to achieve record annual VC investment totals in markets worldwide. In particular, IPO interest and activity is expected to continue to rise in Q4, even in Europe's historically soft IPO market."
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