Asia dwarfs Europe, second only to North America in Q2’15 startup funding

Freedigitalphotos.net by Sira Anamwong. Image ID: 100352168

Financing and deal sizes ballooned in the second quarter of 2015, with funding to venture capital-backed companies poised to surpass last year’s high. This was revealed in a report by KPMG International and CB Insights.

Over $60 billion has been invested so far this year, compared with $88.3 billion last year. North America leads the way with $19 billion in funding in 1180 deals, followed by Asia, with $10.1 billion in funding over 313 deals, and Europe, which seems a laggard in comparison with $3.2 billion in funding in 284 deals. The funding spread in the U.S. indicates many more startups managed to get funded, than in Asia where fewer startups got fatter funding.

North America and Asia drove the bulk of new unicorns — companies valued at over $1 billion — in Q2’15.

Unicorns
Graph from a report by KPMG International and CB Insights.

Asia’s rise in funding was powered by China, the economic powerhouse that has shown signs of slowing, and India. It comfortably pulled ahead of Europe both in deal count and the amount of funding. Over the last five quarters, more than $33 billion has been invested by venture capital firms in Asia, compared with just $13 billion in Europe. India’s Flipkart, and China’s Coupang and Dianping led  mega fund-raises and the top six deals in the region accounted for $4.2 billion or 28 per cent of all funding. India saw a big leap, as deal flow rose to 122 from 84, and funding doubled.

megadeals
Graph from a report by KPMG International and CB Insights.

Among the startups that got funding, internet and mobile startups grabbed the vast majority — 82 per cent — of it in Q2’15, compared with 65 per cent in North America and 74 per cent in Europe. In terms of funding dollars, 69 per cent went to internet-led startups, followed by those in the mobile and telecommunications sector. That has been pointed out by Indian startups as well, and is one of the reasons why several of them moved to Singapore or the Silicon Valley in California, where the spread is not as skewed in favour of internet and mobile sectors.

Funding dollars graph
Graph from a report by KPMG International and CB Insights

With such amounts of funding, it is little wonder that several firms have chosen to stay private for longer. “There is no question that companies would often choose to stay private longer because that gives the company more latitude to do what they need to do to grow their business for the long term,” said Brian Hughes, national co-partner, KPMG Venture Capital Practice.

Corporate investors participated in 32 per cent of financing deals in Asian VC-backed companies in the quarter, higher than in other regions of the world. The rest was made up by venture capital, mixed with hedge funds, and private equity investors.

Largest rounds
Graph from a report by KPMG International and CB Insights

Sequoia Capital India was the most active investor in Asia in Q2’15, participating in rounds to Grofers, Peppertap, and Urban Ladder, among others. SAIF Partners and Accel Partners rounded out the top 3 most active, with SAIF investing in Urban Ladder as well.

Most Active VC
Graph from a report by KPMG International and CB Insights

 

Also Read:

5 ways Asian startups can raise funding from investors in Silicon Valley

Asian venture capital deals quadruple to $31.6b in two years: Preqin

Temasek’s arm Vertex powers five big Asian venture capital investments in Q3

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.