The VC market in the U.S. is very hot, with a significant amount of dry powder available, increasing interest from alternative investors, and strong IPO and M&A exit activity. VC investment was incredibly strong in Q3’21, with large megadeals continuing to dominate. Both fintech and healthtech remained top areas of investment, in part due to the growing diversity of companies in the two spaces.
IPO and M&A activity slowed somewhat in Q3’21, driven in part by seasonality, but likely also as a consequence of companies feeling less pressured to exit quickly. Companies are becoming more strategic about their exit plans, taking the time to ensure they are well positioned to get a strong result.
Heading into Q4’21, ESG is expected to continue to grow on the radar of VC investors in the US, with a broader range of companies with sustainable solutions attracting investment. Following the summer lull, IPO activity is expected to rebound in Q4’21, although the percentage of IPOs that are completed via SPAC will likely decline as the fervour associated with SPAC transactions continues to wane.
Looking ahead, I expect we’ll start to see some additional investments in the HR space. The whole area of HR seems ripe for disruption, from recruiting and hiring to the management of hybrid teams and the development of performance and rewards that make everyone, whether working remotely or in the office, feel they are being treated equitably
— Conor Moore, National Leader, KPMG Private Enterprise
In the US in Q3'21
VC hits record $82.8 billion invested across 3518 deals
Valuations on the rise — 90% up rounds
Software, healthcare and life sciences gain most investment
Corporate participation nears $35 billion for third consecutive quarter
Annual fundraising reaches new heights over almost $100 billion
Source: Venture Pulse, Q3’21, Global Analysis of Venture Funding, KPMG Enterprise. Data provided by PitchBook, September 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.
