Global VC investment soars past $170 billion; smashes previous records in Q3, 2021

This year's healthy level of Global VC investment showed no signs of stopping in Q3, 2021, 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, 2021 edition of Venture Pulse -- a quarterly report published by KPMG Private Enterprise on VC trends globally and in key jurisdictions around the world.

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Closer at home, India also saw a record 498 VC deals during the quarter -- up from 376 the previous quarter with investors outside traditional VC firms taking part in a number of deals in Q3, 2021 -- including traditional PE firms, which have not historically been active in consumer tech deals in India.

As per the report, IPO activity was also very strong in India in July-August quarter of 2021, with indications that October-December period will be even stronger.

Edtech was an active sector during the quarter in India. 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 said, "The money pouring into consumer tech companies, D2C companies, fintech companies and others here in India is 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, "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."

At the global level, during Q3, 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, said the report.

As per Venture Pulse, 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.

The report also brought out that 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.