VC investment soared to a new high in Q2’21, as investors continued to prioritize larger and later stage deals. High valuations, a robust IPO market, and a hearty supply of dry powder also helped fuel investment this quarter. While fintech was the most attractive sector of investment, health and biotech continued to see significant investment activity, in addition to areas such as edtech, gaming and food delivery.
Exit activity continued to be robust, with the IPO market in the U.S. continuing to show strength with no slowdown in activity in terms of companies preparing to go public. While SPACs remain a viable option for companies looking to exit, interest has waned somewhat in Q2’21. The SPACs that have been created, however, will need to find targets, which will be a key activity to watch over the remainder of the year.
VC investment is expected to remain strong heading into Q3’21, particularly in areas such as fintech, automotive, and AI. Given the supply chain issues identified as a result of the Evergreen ship blocking the Suez Canal and the ransomware attack on the Colonial Pipeline, there could also be increasing interest in logistics and supply chain solutions.
Here in the U.S., valuations continue to be high, and capital from numerous sources continues to be plentiful. This is providing significant optionality for companies as they mature, e.g., ability to do a later-stage round and delay a potential IPO. This optionality is excellent as companies wait to see what the post-pandemic outcomes are for consumer and corporate behaviors.
— Conor Moore, National Leader, KPMG Private Enterprise
In the US in Q2'21
VC-backed companies raised $75 billion across 3,296 deals
Median deal size for Series D+ leaps past $100 million
Corporate VC surpasses $30 billion for second consecutive quarter
Red-hot IPO market continues to achieve new highs
Source: Venture Pulse, Q2'21, Global Analysis of Venture Funding, KPMG Private Enterprise. Data provided by PitchBook, June 30, 2021.
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About the Pulse Series
The Pulse Series of reports—Venture Pulse and the Pulse of Fintech—analyze the latest global and regional investment trends and insights. Included in the reports we provide perspectives and analyses on the lifecycle of venture capital investments as well as overall fintech investment across the Americas, Europe, and Asia. In each report, we share the latest valuations, financing, deal sizes, mergers & acquisitions, exits, corporate investment, and industry trends.
