Global venture capital funding saw a slowdown, including in the US, the traditional home of venture capital, in the third quarter this year while investments in Asia remained largely constant, according to a report.
Global funding fell 7% in Q3 (July-September) of 2019 to $50 billion, while US venture-backed companies raised $26 billion last quarter — a 15% decline compared with Q2. Deal volume too, fell 16% to 1,304 transactions, according to the report from market intelligence platform cbinsights, along with consultancy firm PwC.
Funding in Asia, however, stayed constant at $15 billion in each of the last two quarters, with deal volumes rising marginally to 1,271 transactions.
The slowdown in the US comes at a time when most new technology stocks are struggling in the public markets, with some such as WeWork unable to even get to a listing. 22 US VC-backed tech companies exited via IPOs in Q3’19, following a highly elevated 33 in Q2’19.
Sector wise, internet startups continued to see outsized investor interest, raising $10 billion across 537 deals, more than double the value and triple the volume of the next most funded sectors- healthcare; and mobile and telecommunications.
Despite the slowdown in the US, the number as well as the aggregate value of unicorns- private companies valued at over a billion dollars, hit a record. At the end of the quarter, the US had 180 unicorns worth a combined $621.2 billion, the report said.
Exits via mergers and acquisitions in the quarter declined slightly, to $163 billion, from $166 billion in the second quarter. IPO exits too declined from $33 billion to $22 billion.
Funding in US dipping and Asia remaining buoyant also marks a reversal from the previous quarter, where funding in startups fell 2% in the quarter ended 30 June from the preceding quarter, with deal activity in Asia slowing even as the US reported a record number of deals.
While Asia came close to surpassing North America’s deal activity in the third quarter of 2018, the region’s deal activity has since declined. It fell 24% in the June quarter.
This article was first published on livemint.com.
