Venture Pulse Q2 2021 - assets.kpmg

Venture PulseQ2 2021Global analysis of venture funding

21 July 2021

2

©2021 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved.# Q2VC

Welcome to the Q2’21 edition of Venture Pulse, KPMG Private

Enterprise’s quarterly report highlighting the major trends,

opportunities, and challenges facing the venture capital market

globally and in key regions around the world.

Global 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 across numerous

jurisdictions. In the Americas and Europe, VC investment

reached near-record highs, while Asia attracted its second-

highest level of VC investment since Q3’19.

The quarter saw 10 deals over $1 billion, led by a $2.75 billion

raise by Northvolt AB in Switzerland, and a $2.5 billion raise

by US-based Waymo. While fintech was the most attractive

sector of investment in all regions of the world, 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 interest in IPOs

stretching well outside of the US. In Q2’21, companies

including Monday.com (Israel), Oatly (Sweden), Darktrace

(UK) held IPOs. While interest in SPACs slowed somewhat in

the US, it grew in other regions. 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.

With a significant amount of cash looking for investments, the

VC market is expected to remain very robust heading into

Q3’21. VC investors will likely focus on many of the sectors

expected to remain attractive as the world emerges from the

pandemic, including B2B business productivity, fintech, and

delivery.

In this quarter’s edition of Venture Pulse, we look at these and

a number of other global and regional trends, including:

─ The explosion of unicorn births compared to previous years

─ The major focus on fintech investment across all regions

─ The ongoing interest in health and biotech as the world

emerges from the pandemic

─ The increasing participation of non-traditional VC investors

We hope you find this edition of Venture Pulse insightful. If you

would like to discuss any of the results in more detail, please

contact a KPMG adviser in your area.

You know KPMG, you might not know

KPMG Private Enterprise.

KPMG Private Enterprise advisers in KPMG firms

around the world are dedicated to working with

you and your business, no matter where you are

in your growth journey — whether you’re looking

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your business to the next generation.

Kevin SmithHead of KPMG Private Enterprise

in EMA, Global Co-Leader — Emerging Giants,

KPMG Private Enterprise

Partner, KPMG in the UK

Welcome message

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document are US Dollar.

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the independent member firms of the KPMG global organization.

Conor MooreHead of KPMG Private Enterprise in the

Americas, Global Co-Leader —

Emerging Giants,


Partner, KPMG in the US

Jonathan LavenderGlobal Head,


2

# Q2VC

3


Contents

─ New quarterly record in Europe — with over $34 billion invested on 1848 deals

─ Corporate venture capital drive record surge — reaching $16.5 billion invested

─ Exits remain strong for second consecutive quarter

─ UK, Germany, France, Nordics and Israel all hit new investment highs

─ Germany dominates with 4 of the top 10 deals

Europe

Global─ VC investment hits new record

high — reaching $157.1 billion

─ Global median deal size for D+

jumps to $105 million in 2021

─ Corporates on pace for biggest

year ever

─ Unicorn rounds spike for

second consecutive quarter

─ First half fundraising

approaches 2020 annual totals

─ Top 10 deals globally spread

across 8 different countries

34

US─ VC hits record $75 billion invested

across 3296 deals

─ Median deal size for Series D+ leaps

past $100 million

─ Corporate participation surpasses

$30 billion for second consecutive

quarter

─ Red-hot IPO market continues to

achieve new highs

─ Experienced managers continue to

dominate fundraising efforts

47 71Asia─ Venture Capital investment

robust — with $38 billion

across 1998 deals

─ Early-stage deals start to

heat up

─ Venture backed exit activity

returns to historic norms

following record Q1

─ India sees surge to almost

$8 billion invested — a new

record

─ Decline in mega-deals

belies ongoing health of

Chinese VC

─ Top 10 deals spread

amongst Indonesia, India,

China, Singapore and

South Korea

Americas─ New record high of $84.1 billion

invested across 3659 deals

─ Series A sees surge in deal

value

─ Median pre-money valuation

for Series D+ reaches $1 billion

in H1’21

─ Canada blasts to new record,

powered by 19 mega rounds

─ Brazil sees over $2.5 billion

invested with mega deals

including Nubank

04 19

©2021 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved.

Globally, in Q2’21 VC-backed companies raised

$157.1B across 7,687 deals

Global US | Americas | Europe | Asia

4

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5


Americas, Europe and Asia all attract mega funding rounds in Q2’21

A growing number of jurisdictions across regions attracted mega VC funding rounds in

Q2’21, including the US (Waymo — $2.5 billion, SpaceX — $1.2 billion, Epic Games — $1

billion), Indonesia (J&T Express — $2 billion), India (BYJU — $1.5 billion), China (Horizon

Robotics — $1.5 billion), Germany (Celonis — $1 billion), Brazil (Nubank — $1.5 billion) and

the Netherlands (MessengerBird — $1 billion). Institutional and PE investors, meanwhile,

powered Sweden-based Northvolt AB’s $2.75 billion funding round. In addition to

showcasing growing geographic diversity, these deals highlight the breadth of sectors

attracting funding in today’s market, including alternative energy, fintech, B2B services,

education, gaming, logistics, and aerospace.

Less typical investors focusing on VC market opportunities

Given the success of many IPOs over the past year and a growing sense of FOMO (the fear

of missing out) a growing number of less typical VC investors are increasing their focus on

the VC market, including private equity players, pension funds, sovereign wealth funds,

university endowments, and family offices. While some may have had a small percentage of

funds allocated to alternative investments such as VC historically, they are now increasing

their allocations. Hedge funds and mutual funds are also putting money in the VC market

because they see low risk opportunities to make returns off companies expected to go public

within the next twelve months. The influx of these non-traditional players is only increasing

the already enormous amount of liquidity in the market.

Global VC investment surges to new in Q2’21VC investment globally surged in Q2’2021, as all regions of the world attracted very strong levels of investment. In addition to regional record highs in Europe and the Americas, a number of countries

saw their highest quarters of VC investment ever, including the United States, Australia, the Netherlands, Switzerland, Israel, India, France, Germany, the United Kingdom, Brazil, Mexico and Canada.

The VC market remains very active, buoyed by a significant amount of available cash, high valuations, and no slowdown in IPO activity.

Unicorn births exceed 2020 total at mid-year

Q2’21 saw a surge in companies globally achieve unicorn status, bringing the total number of

unicorns in 2021 well above the previous annual high of 179 seen in 2018. While the US

accounted for the majority of new unicorns in Q2’21, the others covered quite a geographic

spread, from Bitso in Mexico to SafetyCulture in Australia, Paidy in Japan, and GoStudent in

Austria.

The large number of unicorns likely reflects the ongoing trend of VC investors focusing on their

existing clients, using their investments to allow them to bring on people, fuel their sales and

their valuations. Given how cheque sizes have grown over the past two years, there is some

question as to what will happen to growing unicorns: will they go for an IPO or is there enough

appetite for unicorns to grow beyond a unicorn valuation? This is because there is a cap as to

the level of valuation a company can get to before the exit option is limited to a form of IPO.

Corporates continue to prioritize VC investments

Corporate VC investment was strong in all regions of the world during Q2’21. The pandemic

has really expedited the need for digital transformation, for innovation, and for doing business

better in general. Many established companies globally have come to the realization that they

don’t need to innovate from scratch, and that a better approach might be to partner with or

invest in startups that can help them accelerate their transformation in ways that better align

with the new normal.


6


SPACs gaining attention globally

Over the last few quarters, SPACs have gained a significant amount of traction in the US.

During Q2’21, US-based fintechs SoFi and Payoneer went public via SPAC, in addition to

companies such as Barkbox and Lightning eMotors. Activity cooled somewhat in the second

half of the quarter, after the SEC issued accounting guidance related to accounting of stock

options.

In Europe and Asia, SPACs are gaining more attention from tech companies looking to go

public, although some are finding that going public via a SPAC can still be a complex

undertaking. During Q2’21, Singapore-based Grab delayed its merger with SPAC Altimeter

Growth Corp to Q4’21 in order to meet SEC reporting requirements.

VC investment in biotech flourishing

Biotech and drug discovery was a particularly hot area of investment globally, led by a $735

million raise by US-based Treeline Biosciences. Several countries outside of the US also saw

large biotech deals, including the UK (Alchemab Exscientia — $82.8 million; ViroCell Biologics

— $118 million), China (Jinwei — $123 million) and Canada (Ventus Therapeutics — $100

million). The pandemic has only emphasized the importance of healthcare and biotech, driving

interest in a wide range of health focused products and services, including digital health care

and medical devices.

Global VC investment surges to new in Q2’21, cont’d.Optimism as the world opens up

While the pandemic isn’t over yet, there a growing sense of optimism as COVID-19 vaccine

distribution accelerates globally and investors focus on the sectors expected to remain

attractive in the post-pandemic world. Even as parts of the world have opened up more

broadly, VC investor have continued to flow money into sectors accelerated by the

pandemic, such as fintech, delivery, and B2B services, betting that none of the major

change in terms of customer behaviours will revert to historical norms. VC investors expect

businesses and consumers will continue to embrace innovative business models even after

the pandemic, given their better understanding of the benefits in terms of speed,

responsiveness, and agility.

Trends to watch for globally

VC investment will likely remain robust in most regions of the world in Q3’21, given the

wealth of dry powder in the market, the growing participation of non-traditional VC

investors, and the positive IPO activity. Sectors such as fintech, business productivity, and

health and biotech will likely continue to attract significant investment. Cybersecurity will

likely also be a hot ticket for investors, given the increasing number of transactions

occurring in the cloud.

ESG (environmental social, and governance) is also expected to grow on the radar of

investors, given the increasing importance being placed on sustainability across the

business world. Already, there is increasing investment in businesses with ESG-aligned

business models, such as electric vehicles and food tech. Moving forward, it is likely

investments in these areas will continue to grow, while investors may also increase their

scrutiny of ESG factors when making funding decisions.


7


Globally, there is plenty of

cash available for VC

investments—and even

more coming in from private

equity, family offices, and

other players outside of

traditional VC funds looking

for opportunities in the VC

market. Almost everywhere

in the world, VC investment

is incredibly strong and I

don’t see the market globally

going cold. The amount of

money being generated out

there is massive and the

willingness to invest in tech

is just going up.

“

”Jonathan LavenderGlobal Head,


Venture financing continues to hit new highs

Source: Venture Pulse, Q2’21. Global Analysis of Venture Funding, KPMG Enterprise. Data provided by PitchBook, July 21, 2021.

Although the COVID-19 pandemic is far from over, it is

clear that as some economies are able to reopen and

embark on the pathway back to normal life, the seismic

changes in digitization, the shift to cloud and exciting

innovations in life sciences and logistics are all still

encouraging mass infusions of capital into thousands of

startups worldwide. 2021 has now observed record levels

of VC invested outstripping anything recorded prior,

thanks to the ongoing flood of billions of dollars in capital

committed to venture fund managers’ coffers. Deal

volume is also remarkably strong, with figures expected

to rise even further once additional transactions are

disclosed. Such exuberance does warrant a note of

caution but as businesses worldwide continue to adapt

under the forcing function of the COVID-19 pandemic’s

changes, potential market opportunities continue to

abound.

Global venture financing2013–Q2'21


$40.4

$40.5

$56.4

$37.2

$47.3

$59.6

$37.9

$37.1

$36.1

$53.6

$57.0

$55.5

$76.8

$91.9

$74.3

$94.9

$71.0

$68.6

$137.4

$76.3

$68.9

$72.2

$94.2

$98.0

$147.2

$157.1

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

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Q1

Q2

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Q1

Q2

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Q1

Q2

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Q1

Q2

Q3

Q4

Q1

Q2

2013 2014 2015 2016 2017 2018 2019 2020 2021

Deal value ($B) Deal count Angel & seed Early VC Later VC

7

# Q2VC

8


Up rounds surge to record proportion of volume

Source: Venture Pulse, Q2’21, Global Analysis of Venture Funding, KPMG Enterprise. *As of June 30, 2021. Data provided by PitchBook, July 21, 2021.

Global median deal size ($M) by stage2013–2021*

Global up, flat or down rounds2013–2021*


$1.5

$6.00

$15.00

$0

$2

$4

$6

$8

$10

$12

$14

$16

2013 2014 2015 2016 2017 2018 2019 2020 2021*

Angel & seed Early VC Later VC

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013 2014 2015 2016 2017 2018 2019 2020 2021*

Up Flat Down

9


Competition pushes medians up across every series


Global median deal size ($M) by series2013–2021*


$2.0

$0.7

$10.0

$25.0

$53.0

$105.0

$0

$20

$40

$60

$80

$100

$120

2013 2014 2015 2016 2017 2018 2019 2020 2021*

Seed Angel A B C D+

10


Series D+ achieves stratospheric mark of $1 billion


Global median pre-money valuation ($M) by series2013–2021*


$6.7$3.9

$32.0

$100.0

$270.0

$1,000.0

$0

$200

$400

$600

$800

$1,000

$1,200

2013 2014 2015 2016 2017 2018 2019 2020 2021*

Seed Angel A B C D+

11


The first half of 2021 sees surge in early-stage VC invested


For multiple editions of the Venture Pulse, the drift of capital concentration to the later stages, as well as financing volume, has been an ongoing theme. However, it is worth remarking that in 2021 to date, a

staggeringly large proportion of VC invested has occurred at Series A in particular, while angel and seed-stage deals are proceeding along at a healthy clip. The profusion of capital and optimism across the venture

ecosystem is now beginning to exert an inflationary effect across the entire gamut of stock series and company lifecycle, as opposed to an over-concentration of funding the most mature, largest venture-backed

companies that are closer to potentially lucrative liquidity events.

Global deal share by series2013–2021*, number of closed deals

Global deal share by series2013–2021*, VC invested ($B)


0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

2013 2014 2015 2016 2017 2018 2019 2020 2021*

Series D+

Series C

Series B

Series A

Angel & seed$0

$50

$100

$150

$200

$250

$300

2013 2014 2015 2016 2017 2018 2019 2020 2021*

12


Pharma & biotech poised to break records


Global financing trends to VC-backed companies by sector2013–2021*, number of closed deals

Global financing trends to VC-backed companies by sector2013–2021*, VC invested ($B)


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013

2014

2015

2016

2017

2018

2019

2020

2021*

Commercial Services

Consumer Goods & Recreation

Energy

HC Devices & Supplies

HC Services & Systems

IT Hardware

Media

Other

Pharma & Biotech

Software 0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013

2014

2015

2016

2017

2018

2019

2020

2021*

13


The rising tide of capital has lifted not only metrics across every stage and series, but also first-time

funding tallies. At just over $20 billion, 2021 is looking to set a new high for the sheer heft of capital

invested in first-time financings, even as volume is pacing to resurge from the gradual decline recorded

since a peak in 2015. If anything, this signals animal spirits but also the founder-friendly nature of the

current market environment.

Corporates pick the pace back up

In contrast to data earlier in the year, it is now clear that corporate venture arms resumed a vigorous

pace of participating in or originating transactions in 2021. As a result, aggregate VC invested tallies of

all the associated financings have been climbing to near-record levels. Especially in the wake of the

COVID-19 pandemic, corporations across all sectors will continue to examine which technologies or

innovations they need exposure to in order to remain adaptable and flexible.


Note: The capital invested is the sum of all the round values in which corporate venture capital investors participated, not the amount that corporate

venture capital arms invested themselves. Likewise, deal count is the number of rounds in which corporate venture firms participated.

Corporate VC participation in global venture deals2013–Q2'21



Global first-time venture financings of companies2013–2021*

$5.5

$7.0

$6.5

$6.9

$9.4

$12.9

$10.6

$13.2

$17.3

$17.9

$30.1

$15.8

$25.0

$37.7

$17.6

$16.4

$14.0

$26.1

$31.6

$23.8

$35.6

$58.6

$40.0

$52.5

$33.9

$32.7

$99.7

$40.5

$34.9

$38.0

$47.1

$45.5

$62.5

$73.9

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

$0

$20

$40

$60

$80

$100

$120

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

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Q3

Q4

Q1

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Q1

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Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

2013 2014 2015 2016 2017 2018 2019 2020 2021

Deal value ($B) Deal count

$13.3

$15.6

$27.8

$24.2

$22.3

$32.0

$29.9

$28.4

$20.1

0

2,000

4,000

6,000

8,000

10,000

12,000

$0

$5

$10

$15

$20

$25

$30

$35

2013 2014 2015 2016 2017 2018 2019 2020 2021*


14


VC flows to unicorns even more but liquidity provides encouragement


Note: PitchBook defines a unicorn venture financing as a VC round that generates a post-money valuation of $1 billion or more. These are not necessarily

first-time unicorn financing rounds, but also include further rounds raised by existing unicorns that maintain at least that valuation of $1 billion or more.

Global unicorn rounds2013–Q2'21

Global venture-backed exit activity2013–Q2'21


Note: Exit value for initial public offerings is based on post-IPO valuation, not the size of the offering itself.

Even after remarkably strong liquidity trends for venture-backed companies in 2020, the first half of 2021

saw an even faster clip of exits, fueled by record highs in equities and the brief SPAC boom. As volatility

in equity markets has ticked up, it remains to be seen if there is a dampening effect upon public listings,

however, M&A also has proceeded at a robust pace, which will only be energized further as deadlines

loom for SPAC sponsors.

Some unicorns have raked in sizable financings as likely one of their last funding rounds while staying

private, while others continue to make no commitment nor signal that they will go public any time soon.

As the overall unicorn population continues to grow, moreover, the sheer volume of financings was

bound to rise, especially as so many saw their businesses only accelerated in the mass adoption of new

technologies during 2020.

$18.8

$17.6

$17.6

$13.0

$25.4

$32.3

$21.5

$41.3

$18.4

$18.2

$83.5

$23.7

$20.4

$23.0

$30.1

$27.5

$57.5

$65.5

0

50

100

150

200

250

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

Q1

Q2

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Q1

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Q1

Q2

Q3

Q4

Q1

Q2

2013 2014 2015 2016 2017 2018 2019 2020 2021


$9.0

$18.4

$23.3

$46.7

$28.7

$73.7

$30.6

$70.5

$22.6

$34.8

$29.3

$41.1

$32.9

$29.9

$31.6

$21.0

$46.7

$37.1

$31.2

$67.3

$28.5

$112.7

$160.5

$55.3

$58.8

$174.3

$74.2

$54.8

$43.7

$59.4

$163.8

$197.2

$314.0

$306.4

0

100

200

300

400

500

600

700

800

900

$0

$50

$100

$150

$200

$250

$300

$350

Q1

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2013 2014 2015 2016 2017 2018 2019 2020 2021

Exit value ($B) Exit count


15


Public listings already notch new high in exit value

Already 2021 has seen exit value achieved via public listings surge past the records of 2020. Despite more volatility in equity markets and concerns over recent regulatory agencies’ shifts concerning

SPACs, it remains likely that a healthy pace of public listings will continue, even if M&A remains the most popular route to liquidity in line with historical norms. Buyouts also look set to potentially

exceed prior highs as PE fund managers increasingly look to the venture-backed ecosystem for new targets.


Global venture-backed exit activity (#) by type2013–2021*

Global venture-backed exit activity ($B) by type2013–2021*

$0

$100

$200

$300

$400

$500

$600

$700

2013 2014 2015 2016 2017 2018 2019 2020 2021*

Acquisition Buyout Public Listing

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2013 2014 2015 2016 2017 2018 2019 2020 2021*



16


Even after a near-record year for capital raised at $127.7 billion, the first half of 2021 is off to

such a strong start it is not inconceivable this year will see

the first-ever $200 billion allocated to VC.

Fundraising set to notch new highs

Global venture fundraising2013–2021*

Source: Venture Pulse, Q2’21, Global Analysis of Venture Funding, KPMG Enterprise. *As of June 30, 2021.

Data provided by PitchBook, July 21, 2021.

Allocators worldwide continue to flock to alternative investments—venture is no exception. Although

the pace of fundraising cycles can vary, and thus there is no certainty to this assumption, if the pace

of commitments continues at the same rate, it is not inconceivable that the $200 billion-plus threshold

is finally broached this year. To counter that point, many of the mega-funds closed upon this year

may be the last for some of the largest and most experienced venture firms in the space, and thus

even if volume continues at a quite-robust pace, the aggregate value of commitments may not rise in

such spectacular fashion.

$41.6

$63.8

$85.2

$113.5

$117.2

$142.5

$113.9

$127.7

$103.7

0

200

400

600

800

1,000

1,200

1,400

$0

$20

$40

$60

$80

$100

$120

$140

$160

2013 2014 2015 2016 2017 2018 2019 2020 2021*

Capital raised ($B) Fund count


17


First-time fundraising slightly off from prior years but still healthy

Fund sizes have been creeping higher, as the universe of fund managers has only expanded and firms scale up their strategies and resources, throughout the 2010s. As the new decade commences, first-time

fundraising as a proportion of overall fundraising is somewhat off, but that may still reverse by year’s end as more-experienced firms close more swiftly, and allocators then turn to emerging managers to maintain desired

levels of exposure to VC.


Global venture fundraising (#) by size2013–2021*

Global first-time vs. follow-on venture funds (#)2013–2021*


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013 2014 2015 2016 2017 2018 2019 2020 2021*

$1B+

$500M-$1B

$250M-$500M

$100M-$250M

$50M-$100M

Under $50M

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013 2014 2015 2016 2017 2018 2019 2020 2021*

First-time Follow-on


1. Northvolt — $2.75B, Stockholm, Sweden — Automotive cleantech — Series E

2. Waymo — $2.5B, Mountain View, US — Automotive — Late-stage VC

3. J&T Express — $2B, Jakarta, Indonesia — Logistics — Late-stage VC

4. BYJU’S — $1.55B, Bengaluru, India — Edtech — Series F

5. Nubank — $1.5B, Sao Paulo, Brazil — Fintech — Series G

5. Horizon Robotics — $1.5B, Beijing, China — Semiconductors — Corporate

7. SpaceX — $1.2B, Hawthorne, US — Spacetech — Late-stage VC

8. Celonis — $1B, Munich, Germany — Business/productivity software — Series D

8. MessageBird — $1B, Amsterdam, Netherlands — Cloudtech — Series C

8. Epic Games — $1B, Cary, US — Entertainment software — Late-stage VC

3

4

Top 10 global financings in Q2’21


The flood of VC proliferates worldwide

5

1

7


8

18

# Q2VC

5

2

8

8


In Q2’21 US VC-backed companies raised


Global US Americas | Europe | Asia

19

# Q2VC

20


Growing diversity of sectors attracting large funding rounds

A wide variety of US-based companies attracted $500 million+ funding rounds during Q2’21,

including autonomous driving company Waymo ($2.5 billion), aerospace-focused SpaceX

($1.2 billion), gaming company Epic Games ($1 billion), and biotech firm Treeline Biosciences

($678 million). Three fintech companies also raised large rounds during the quarter, including

Perch ($775 million), Better ($500 million), and Daily Pay ($500 million). These deals highlight

the breadth of sectors attracting attention from investors in the US.

Fundraising poised to shatter previous high

Fundraising activity in the US continued to be red hot in the US during Q2’21, with the total

raised to date just shy of the previous annual record high. The burst in fundraising activity

highlights the wealth of dry powder in the market looking for a home, while also emphasizing

the successes of a number of the well-established VC firms. These firms are delivering higher

returns over the life of their funds, returns that are expected to grow further given the IPO and

exit successes that have been seen over the last few quarters. This is driving some

institutional investors and less traditional investors to invest in funds led by highly successful

VC firms, thus boosting fundraising totals even further.

VC investment in US reaches record high in Q2’21In Q2’2021, VC investment reached yet another record high in terms of total deal value, slightly surpassing the previous quarter’s total in deal value.

Institutional investors following the smart money

A growing number of institutional investors are investing in late stage VC deals, in part by

following the smart VC money. They are identifying opportunities related to startups that are

well established, Series C and beyond, and evaluating whether companies have legs before

making investments. Many of these institutional investors see these late stage investments as

relatively safe bets given the confidence such companies have gained from highly successful

VC firms.

Corporate VC investment shows continued strength

Corporate VC investment in the US showed continued strength in Q2’21. Many corporates are

using VC investments as their R&D center, in part so they can make a range of investments in

order to see what sticks. Many corporates have also recognized that they need to enhance

their innovation capacity, and see VC investments and M&A activity as a means to make leaps

forward in terms of their capabilities.

IPO Market remains strong

The IPO market in the US continued to show strength in Q2’21, with no slow down in activity in

terms of companies preparing to go public. The quarter saw a number of IPOs, including plant-

based milk company Oatly, which raised $1.4 billion in its May debut, with shares rising as

much as 34% in first day trading.1

The quarter also saw several direct listings, including cryptocurrency exchange Coinbase in

April and website hosting company Squarespace. A number of SPAC mergers also occurred

during Q2’21, including fintech company SoFi with Social Capital Hedosophia Holdings Corp.

V2 and subscription service Barkbox with Northern Star Acquisition.3


1 https://markets.businessinsider.com/news/stocks/oatly-stock-price-ipo-10-billion-valuation-plant-based-milk-2021-5-10304520002 https://investorplace.com/hypergrowthinvesting/2021/06/sofi-stock-spac-merger-beginning-of-huge-breakout/3 https://news.spacconference.com/2021/06/02/bark-and-northern-star-close-merger/

https://markets.businessinsider.com/news/stocks/oatly-stock-price-ipo-10-billion-valuation-plant-based-milk-2021-5-1030452000

https://investorplace.com/hypergrowthinvesting/2021/06/sofi-stock-spac-merger-beginning-of-huge-breakout/

https://news.spacconference.com/2021/06/02/bark-and-northern-star-close-merger/

21


Electric vehicle ecosystem gaining traction

In recent quarters, VC investors have shown increasing interest in everything to do with

electric vehicles. In addition to specific car technologies and charging platforms, there has

been a growing focus on the ecosystem supporting electric vehicles. For example, the

development of destination charging options that allow vehicles to be charged while owners

are shopping or at work.

SPACs losing some shine

After two quarters of surging interest in SPAC transactions, interest waned somewhat in

Q2’21. While SPACs remain a viable option for companies looking to exit, there is growing

recognition of the reality surrounding SPAC transactions, including the need to be ready to

perform as a public company from day 1. In April, the SEC also issued accounting guidance

classifying SPAC warrants as liabilities rather than as equity instruments.4 This sparked

some concern that the SEC will enhance its regulatory scrutiny of SPACs in the future.

Betting on the new normal

COVID-19 changed the world, shifting how people work, how they shop, and how they

engage with companies. VC investors recognize that the world will never be the same and

are placing big bets on companies expected to thrive in the post-pandemic new normal. This

is driving investment in a wide range of sectors, from fintech and healthcare to gaming, ESG,

and e-commerce.

One subsector beginning to attract attention from investors is staffing. This is because many

companies are expected to leverage hybrid work models moving forward. Such an approach

also allows companies to draw on a broader talent pool for filling critical and highly

competitive roles, thus increasing the need for companies with technologies able to make

staffing processes more efficient and effective.

VC investment in US reaches record high in Q2’21, cont’d.Trends to watch for in the US

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. Investment in agtech and foodtech is also expected to grow, particularly in

areas such as alternative packaging and delivery, in addition to investment in touchless

store related technologies.

IPO activity will likely remain strong well into Q3’21. SPAC transactions will be an area

to watch over the next few quarters given that the multitude of SPACs that have been

formed in recent months will need to find target companies.


4 https://www.cnbc.com/2021/04/21/spac-transactions-come-to-a-halt-amid-sec-crackdown-cooling-retail-investor-interest.html

https://www.cnbc.com/2021/04/21/spac-transactions-come-to-a-halt-amid-sec-crackdown-cooling-retail-investor-interest.html

22


Here in the US, 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 Global Co-Leader — Emerging Giants,

KPMG Private Enterprise, KPMG

Partner, KPMG in the US

The first half of 2021 sees an unprecedented influx of capitalVenture financing in the US2013–Q2'21


As financing volume looks primed to set new highs,

so too has the sheer influx of capital into the US

venture ecosystem led to all-time new highs. The first

two quarters of 2021 have each notched $75 billion in

VC invested, a sum close to double much of prior

quarterly highs. Fund managers’ enthusiasm can be

explained in part by the multiple indications that the

rate of adoption of multiple key digital technologies

and the need for even more across a wide range of

business operations has accelerated to a point that it

will not slow for years, which has created

opportunities for many extant and fledgling startups.

However, the degree of competition also by now

necessitates notes of caution.


$15.2

$22.4

$17.1

$19.3

$20.8

$21.4

$23.0

$19.7

$20.4

$26.5

$18.5

$16.3

$18.3

$22.1

$24.5

$23.3

$29.5

$31.3

$33.9

$48.5

$37.9

$35.6

$36.0

$32.8

$36.5

$37.1

$47.7

$43.1

$75.0

$75.0

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

$0

$10

$20

$30

$40

$50

$60

$70

$80

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

2013 2014 2015 2016 2017 2018 2019 2020 2021


22

# Q2VC

23


The flood of capital widens across both early & late stages


Median deal size ($M) by stage in the US2013–2021*

Up, flat or down rounds in the US2013–2021*


$1.6

$9.5

$16.0

$0

$2

$4

$6

$8

$10

$12

$14

$16

$18

2013 2014 2015 2016 2017 2018 2019 2020 2021*


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013 2014 2015 2016 2017 2018 2019 2020 2021*

Up Flat Down

24


Modest rises at the earlier stages; big jumps at the late-stage

Median deal size ($M) by series in the US2013–2021*


Note: Figures rounded in some cases for legibility.


$2.6$0.6

$11.0

$28.1

$60.0

$100.1

$0

$20

$40

$60

$80

$100

$120

2013 2014 2015 2016 2017 2018 2019 2020 2021*

Seed Angel A B C D+

25


The latest stage nears $1B

2020 closed out with record valuations, indicating VCs focused on the longer term and in safer prospects due to company maturity and sheer size throughout the year, continuing to fuel record valuations across nearly

every series. But 2021 seems to be approaching signs of remarkable levels of both confidence and the ramifications of record dry powder, with the latest stage of financings seeing a surge near $1 billion in the median

Series D+ financing.

Median pre-money valuation ($M) by series in the US2013–2021*


Note: Figures rounded in some cases for legibility.


$8.0 $4.9$33.0

$105.0

$270.0

$985.0

$0

$200

$400

$600

$800

$1,000

$1,200

2013 2014 2015 2016 2017 2018 2019 2020 2021*

Seed Angel A B C D+

26



Financing volume remains healthy across all stages

Deal share by series in the US2013–2021*, number of closed deals

Deal share by series in the US2013–2021*, VC invested ($B)


0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

2013 2014 2015 2016 2017 2018 2019 2020 2021*

Series D+

Series C

Series B

Series A

Angel & seed $0

$20

$40

$60

$80

$100

$120

$140

$160

2013 2014 2015 2016 2017 2018 2019 2020 2021*

27



Life sciences increasingly attracts more capitalVenture financing by sector in the US2013–2021*, number of closed deals

Venture financing by sector in the US2014–2021*, VC invested ($B)


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013

2014

2015

2016

2017

2018

2019

2020

2021*

Commercial Services


Energy



IT Hardware

Media

Other

Pharma & Biotech

Software 0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013

2014

2015

2016

2017

2018

2019

2020

2021*

28


CVCs continue to boost record VC invested tallies


First-time financing volume has held steady in the US over the past few years, albeit at a slightly more

muted rate than observed in the first half of the 2010s. However, a key indication of how the venture

financing market has shifted is the inflation in VC invested even at the first-time stage, where 2021 is

poised to eclipse all prior levels and set a new record should the pace of funding in the first half of the

year continue.

Key contributors to the record tallies of VC invested, corporates and their venture arms both have

participated at an elevated rate in some of the larger financings observed in H1 2021, pushing the

aggregate value of associated financings to well over $30 billion per quarter. Among the key drivers of

this increased desire for exposure to new technologies is the push by multiple businesses to accelerate

their planned digitization and R&D efforts, further fueled by the rapid acceleration in change for

consumer and corporate behavior due to the pandemic.

Corporate participation in venture deals in the US2013–Q2'21

First-time venture financings of companies in the US2013–2021*



$3.5

$3.6

$4.4

$4.2

$5.5

$8.9

$5.6

$7.5

$8.8

$8.9

$10.8

$8.1

$9.2

$15.2

$7.5

$6.3

$6.4

$8.6

$11.9

$9.9

$12.5

$15.6

$16.0

$26.8

$18.8

$16.2

$14.8

$13.6

$17.2

$17.7

$22.0

$17.5

$32.2

$32.3

0

100

200

300

400

500

600

700

800

$0

$5

$10

$15

$20

$25

$30

$35

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

2013 2014 2015 2016 2017 2018 2019 2020 2021


$7.1

$8.3

$9.6

$9.1

$9.1

$14.7

$13.8

$13.9

$9.0

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

$0

$2

$4

$6

$8

$10

$12

$14

$16

2013 2014 2015 2016 2017 2018 2019 2020 2021*


29


Over the years, we’ve seen

nontraditional investors

such as corporations,

mutual funds, sovereign

wealth funds and hedge

funds dip their toes into the

VC market, but as soon as

there is any sort of hiccup

or downturn in the market,

they’ll very quickly reduce

their allocation to the asset

class. Right now, they’re

going far beyond dipping a

toe in; they’re putting their

whole foot in and really

adding to their exposure in

the VC space.

“

”Jules WalkerSenior Director, Business

Development,

KPMG in the US

Massive liquidity flows backdrop record dealmaking figuresGlobal US Americas | Europe | Asia

29

# Q2VC

2021 shows no signs of slowing down when it comes to

liquidity for VC-backed portfolio companies. In turn, this

surge helps provide an encouraging backdrop for the

billions of dollars of investment flowing in on the

dealmaking side. Capitalizing on one of the most

remarkable public market environments in history, mature

unicorns are finally debuting while large companies are

closing acquisitions of others. As long as no significant

shocks to markets persist for some time, even upticks in

volatility are unlikely to discourage this ongoing flood of

exit value.

Source: Venture Pulse, Q2’21, Global Analysis of Venture Funding, KPMG Enterprise. *As of June 30, 2021. Data provided by

PitchBook, July 21, 2021.

Venture-backed exit activity in the US2013–Q2'21

$5.4

$13.6

$19.6

$33.3

$23.7

$23.5

$21.1

$44.4

$11.7

$19.0

$22.1

$20.7

$19.1

$21.5

$21.4

$10.9

$33.7

$19.7

$16.2

$31.2

$19.7

$32.1

$33.3

$38.7

$47.9

$146.1

$43.9

$23.9

$19.0

$29.7

$104.1

$134.7

$130.9

$241.3

0

50

100

150

200

250

300

350

400

$0

$50

$100

$150

$200

$250

$300

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

2013 2014 2015 2016 2017 2018 2019 2020 2021


30



Red-hot IPO market continues to set new highs

The red-hot, if increasingly volatile, equities market continues to encourage unicorns and other mature venture-backed companies to go public. Already 2021 has seen a new high in exit value achieved through public

listings, with the second half of the year likely to bring such a flood of liquidity that new highs will be notched for the decade in both volume and value. Such a rate of debuts is healthy for the private market ecosystem,

enabling the most mature and/or prepared companies to go public and achieve the ability to tap broader capital markets at a greater scale than ever before. Although far from perfectly efficient, the pricing mechanisms

in public equity markets will also be useful for investors and entrepreneurs alike in assessing which business models are truly able to be proven out with additional validation beyond the private investment realm.

Venture-backed exit activity (#) by type in the US2013–2021*

Venture-backed exit activity ($B) by type in the US2013–2021*

0

200

400

600

800

1,000

1,200

1,400

2013 2014 2015 2016 2017 2018 2019 2020 2021*


$0

$50

$100

$150

$200

$250

$300

$350

$400

2013 2014 2015 2016 2017 2018 2019 2020 2021*



31


2021 poised to set new records by summer 2021

Source: Venture Pulse, Q2’21, Global Analysis of Venture Funding, KPMG Enterprise. *As of June 30, 2021. Data provided

by PitchBook, July 21, 2021.

US venture fundraising2013–2021*

At 338 closed funds for an aggregate of $74.1 billion, the US is likely to see a new record set by

mid-summer in terms of aggregate value allocated to the venture asset class. This is the

culmination of not only an ever-increasing turn to alternative investments by allocators, but also the

growth of and diversification among the venture firm universe.

… by midsummer 2021, an all-time high for

capital committed to VC in the US is likely, potentially exceeding $100 billion.

$21.2

$37.8

$41.4

$49.0

$43.7

$72.3

$61.5

$81.0

$74.1

0

100

200

300

400

500

600

700

800

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

2013 2014 2015 2016 2017 2018 2019 2020 2021*



32



Fundraising skews even larger

Venture fundraising (#) by size in the US2013–2021*

Venture fundraising ($B) by size in the US2013–2021*


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013 2014 2015 2016 2017 2018 2019 2020 2021*

$1B+ $500M-$1B $250M-$500M $100M-$250M $50M-$100M Under $50M

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013 2014 2015 2016 2017 2018 2019 2020 2021*


33



Experienced managers have dominated VC invested tallies thus far

First-time vs. follow-on funds (#) in the US2013–2021*

First-time vs. follow-on funds ($B) in the US2013–2021*


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013 2014 2015 2016 2017 2018 2019 2020 2021*


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013 2014 2015 2016 2017 2018 2019 2020 2021*



In Q2’21 VC-backed companies in the Americas raised


Global | US Americas Europe | Asia

34

# Q2VC

35


Bumper quarter for fintech investment across Americas

Fintech saw a banner quarter of investment across the Americas in Q2’21, attracting

numerous $100 million+ funding rounds. During the quarter, Better and DailyPay both

raised $500 million; in Latin America, Nubank raised $1.5 billion, Bitso raised $250

million, and Cloudwalk raised $201 million; and in Canada, Wealthsimple raised $600

million.

While fintech-focused VC investments in Latin America have primarily focused on

payments and lending, the US and Canada have seen a more diverse range of

investments, including into subsectors such as wealth management, insurtech and,

more recently, real estate. Buy now and pay later companies have also gained a lot of

traction in recent quarters.

Unicorn status becoming common in US, still a milestone elsewhere in

Americas

In the first half of 2021, 148 new unicorn companies were born in the Americas. With

valuations clearly continuing to be high, unicorn status appears to be losing some of its

significance, at least in the US, which saw 137 of the new unicorns. In the US, decacorn

status (reaching a valuation of $10 billion+) could become the next major differentiator.

In the rest of the Americas, however, unicorn status is still a major milestone. Canada

saw six new unicorns in Q2’21, including e-commerce financing company Clearco, legal

practice management company Clio, AI-focused chip maker Tenstorrent, AI-powered

chatbot provider Ada Support, ID verification firm Trulioo, and e-commerce focused

retailer Ssense. Mexico, meanwhile, saw its second new unicorn ever during Q2’21:

cryptocurrency platform Bitso.

Record quarter of investment in the Americas

VC investment in the Americas was extremely strong in Q2’21, led by a $2.5 billion deal by Waymo and $1 billion+ funding

rounds by SpaceX and Epic Games in the US.

IPO opportunities abound Americas

The IPO market in the Americas was very active in Q2’21, particularly in the US and

Canada. US IPOs were incredibly varied, including proptech Compass, mobile app

and gaming company AppLovin, beauty-focused Honest Company, construction

software provider Procore and healthcare apparel retailer Figs. Canada also saw

robust IPO activity during Q2’21, including strong debuts by fintech Paymentus,

course platform company Thinkific, cybersecurity firm MagnetForensics, and and

digital media company VerticalScope.

Canada sees another banner quarter of VC investment

After almost doubling its previous record in Q1’21, VC investment in Canada

remained very high in the second quarter, led by a $600 million raise by

Wealthsimple, a $130 million raise by Ada Support, and a $110 million raise by Clio.

B2B solutions were particularly hot in the eyes of investors during Q1’21, in addition

to fintech and biotech AI also generated a lot of interest in Canada given its strong

research pedigree. Over the last few quarters there has been a lot of activity among

AI-focused startups and scaleups, including a C$100 million Series A raise by

autonomous vehicle startup Waabi, highlighting confidence in the growing capacity

for Canadian companies to commercialize AI innovations.

Deep tech also continued to garner attention, primarily from investors with the long-

range capital to make option bets on globally impactful future technologies, such as

BDC and OTPP. During Q2’21, for example, photonics quantum computer company

Xanadu raised $100 million in a deal which included funding from BDC’s Deep Tech

Venture Fund, and follow-ons from OMERS Ventures.


36


Latin America attracts several $200 million+ funding rounds in Q2’21

VC investment in Latin America was very robust in Q2’21, led by a $1.5 billion raise by

Brazil-based Nubank, a $300 million raise by Brazil-based rental company QuintoAndar,

a $250 million raise by Mexico-based cryptocurrency platform Bitso, and a $201 million

raise by Brazil-based payments firm CloudWalk. The raise by Bitso made the company

Mexico’s second unicorn, following pre-owned car sales platform Kavak in Q4’20.

Fintech continues to be a dominant focus for VC investment across Latin America,

accounting for three of the four largest deals of the quarter. Nubank alone has already

raised $1.5 billion in VC funding in the first half of 2021; its recent fund round valued the

digital bank at $30 billion.5

Corporate investment strong across the Americas

Corporate VC investment was very strong across the Americas during Q2’21 as

corporates continued to invest in startups able to help them advance their innovation

agenda more quickly. Canada, in particular, saw a second straight record quarter of

corporate investment in Q2’21. Given that the importance of agile technologies and

digital solutions has been well proven throughout the COVID-19 pandemic, it is

expected that corporate investment will remain quite high into Q3’21.

Record quarter of investment in the Americas, cont’d.Trends to watch for in the Americas

VC investment across the Americas is expected to remain strong heading into

Q3, 21. Investment in fintech will likely remain very hot, along with investment in

B2B, AI-based solutions, and health and biotech.

At a macro level, there is growing concern about inflation, particularly in the US,

which could potentially have a resonating impact on the public markets and on

VC investment.


5 https://www.forbes.com/sites/mariaabreu/2021/06/08/nubank-is-now-worth-30-billion-after-750-million-investment-led-by-berkshire/?sh=514a455716ce

https://www.forbes.com/sites/mariaabreu/2021/06/08/nubank-is-now-worth-30-billion-after-750-million-investment-led-by-berkshire/?sh=514a455716ce

37


Q2 2021 sees new high in VC invested


Venture financing in the Americas2013–Q2'21

Beyond even the US, which set a new record high for venture investment, multiple

other startup ecosystems raked in sufficient VC invested to also notch record

single-quarter tallies. VCs continue to fuel the rise in key sectors across different

countries, from Canadian life sciences to Brazilian consumer- and SMB-focused

fintechs and business software.

… A staggering $84.1 billion was

invested in VC in Q2 2021, continuing 2021’s remarkable run.


$12.1

$12.2

$12.8

$13.7

$15.8

$23.2

$17.9

$20.1

$21.5

$22.5

$23.8

$20.3

$21.2

$27.0

$19.2

$17.2

$19.1

$23.2

$25.6

$24.3

$31.2

$32.6

$35.3

$50.6

$39.9

$38.3

$38.9

$35.3

$38.4

$38.9

$50.1

$45.6

$80.0

$84.1

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

2013 2014 2015 2016 2017 2018 2019 2020 2021


38



VCs’ confidence seen in surge of medians & up rounds

Median deal size ($M) by stage in the Americas2013–2021*

Up, flat or down rounds in the Americas2013–2021*


$1.6

$8.5

$15.0

$0

$2

$4

$6

$8

$10

$12

$14

$16

2013 2014 2015 2016 2017 2018 2019 2020 2021*


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013 2014 2015 2016 2017 2018 2019 2020 2021*

Up Flat Down

39



Healthy to historic rises across every financing seriesMedian deal size ($M) by series in the Americas2013–2021*


$2.5$0.6

$11.0

$28.0

$60.0

$105.0

$0

$20

$40

$60

$80

$100

$120

2013 2014 2015 2016 2017 2018 2019 2020 2021*

Seed Angel A B C D+

40


A historic mark of $1B maintainedMedian pre-money valuation ($M) by series in the Americas2013–2021*



$8.0 $5.0$33.0

$100.0

$275.0

$1,000.0

$0

$200

$400

$600

$800

$1,000

$1,200

2013 2014 2015 2016 2017 2018 2019 2020 2021*

Seed Angel A B C D+

41



Series A sees surge in deal value

Deal share by series in the Americas2013–2021*, number of closed deals

Deal share by series in the Americas2013–2021*, VC invested ($B)


0

2,000

4,000

6,000

8,000

10,000

12,000

2013 2014 2015 2016 2017 2018 2019 2020 2021*

Series D+

Series C

Series B

Series A

Angel & seed$0

$20

$40

$60

$80

$100

$120

$140

$160

2013 2014 2015 2016 2017 2018 2019 2020 2021*

42



Biotech, pharma & software see strong influx of VC

Venture financing of VC-backed companies by sector in

the Americas2013–2021*, # of closed deals

Venture financing of VC-backed companies by

sector in the Americas2013–2021*, VC invested ($B)


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013

2014

2015

2016

2017

2018

2019

2020

2021*

Commercial Services


Energy



IT Hardware

Media

Other

Pharma & Biotech

Software

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013

2014

2015

2016

2017

2018

2019

2020

2021*

Canada has an incredibly

strong research pedigree

when it comes to AI, and

we’ve gotten a lot better at

commercializing AI

opportunities. The $100+

million funding rounds of

AI centric companies this

quarter including Ada

Support and Waabi show

the momentum.

“

”Dan WilsonPartner, National Sector Lead,

Technology

KPMG in Canada

42

# Q2VC

43


VC investment and deals

activity in Canada has been

literally gangbusters—and the

pace doesn’t seem to be

subsiding. No surprise, health

and biotech has been a hot

area of investment. When you

think about it, mNRA is a

technology and there’s a lot of

companies looking at how it

can apply outside of COVID-19

vaccines—such as for diabetes

research, for cancer research,

and otherwise. Given the

potential applicability, we’re

going to see a lot more

investment in the future.

“

”Sunil MistryPartner, KPMG Private Enterprise,

Technology, Media and

Telecommunications,

KPMG in Canada

The boom in VC invested continues


Although the impact of outlier financings such as the

C$750 million funding of fintech Wealthsimple is clear,

what is even more remarkable is that the ranks of

Canadian companies raking in such large sums is growing

even more quickly. In 2021 to date, no fewer than 19

companies have now closed on fundings of $100 million or

more, across an array of sectors with various software

sub-segments being the most popular.

Venture financing in Canada2013–Q2'21


19 separate companies

have now raised $100M

or more in the Canadianecosystem…$

319.2

$293.4

$412.0

$413.4

$338.4

$412.8

$545.4

$545.2

$490.0

$582.9

$517.8

$412.6

$590.4

$324.9

$534.7

$682.1

$299.9

$728.6

$936.4

$684.0

$715.9

$1,0

03.1

$752.4

$868.0

$1,2

37.6

$1,0

51.6

$1,3

78.5

$1,6

86.6

$1,1

54.9

$1,0

33.2

$850.0

$1,2

10.8

$2,9

71.1

$4,0

69.1

0

50

100

150

200

250

300

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

2013 2014 2015 2016 2017 2018 2019 2020 2021

Deal value ($M) Deal count

43

# Q2VC

44


Financing volume is trickling back inGlobal | US Americas Europe | Asia

”Source: Venture Pulse, Q2’21, Global Analysis of Venture Funding, KPMG Enterprise. *As of June 30, 2021. Data provided by PitchBook, July 21, 2021.

Venture financing in Mexico2013–Q2'21

The past variability in the flow of venture funding in the Mexican ecosystem makes it a

fool’s errand to try to predict any definitive trends, but after significant volatility

throughout 2020, it is once again promising that three consecutive quarters now have

seen more consistent flows of funding in terms of both volume and VC invested. That

said, more so than in Canada or even Brazil, Mexico’s venture funding trends have been

skewed by a handful of outlier financings, from Kavak to Confio.

There are tentative if not yet certain signs that

the Mexican ecosystem is beginning to

see an uptick in more consistent,

robust funding…

$72.0

$25.0

$9.8

$57.1

$70.4

$132.2

$88.8

$6.5

$16.0

$143.9

$19.0

$21.7

$9.6

$52.5

$72.8

$16.8

$26.0

$55.4

$22.5

$53.4

$32.6

$63.5

$19.6

$85.9

$406.5

$40.2

$289.9

$253.6

$75.5

$28.0

$70.3

$630.0

$231.1

$1,0

61.9

0

5

10

15

20

25

30

35

40

45

50

$0

$200

$400

$600

$800

$1,000

$1,200

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

2013 2014 2015 2016 2017 2018 2019 2020 2021


45


Brazil’s VC market is growing

rapidly, with an increasing

number of larger deals.

Fintech remains the strongest

area of investment, particularly

the payments space as

companies continue to grow

and scale. Nubank is a prime

example. Between Q1 and Q2

this year, the digital bank

raised close to $2 billion. The

sector will likely remain hot

heading into Q3’21.

“

”Rodrigo GuedesManaging Director,

KPMG in Brazil

Brazil sees all-time high in VC investedGlobal | US Americas Europe | Asia


Nubank continues to lead the way as a prime example of

growing foreign investor interest in funding mature

Brazilian venture-backed companies’ growth potential.

Raking in additional tranches in Q2 2021 from investors

such as GIC, the Singaporean sovereign wealth fund,

Nubank also saw counterparts such as fintech CloudWalk

and content distribution platform Hotmart rake in hundreds

of millions of dollars in funding. The Brazilian startup

ecosystem continues to expand and diversify, attracting

ongoing foreign investor interest; its growth in turn could

help engender a larger base of domestic investment firms

and angels.

Venture financing in Brazil2013–Q2'21

$136.5

$32.1

$153.5

$97.4

$152.1

$211.2

$165.9

$97.9

$148.0

$299.6

$127.6

$117.7

$125.7

$102.6

$66.5

$130.6

$193.1

$205.5

$89.0

$226.8

$384.8

$86.2

$306.2

$1,0

01.5

$130.8

$497.4

$1,1

04.9

$293.5

$541.1

$573.6

$777.6

$527.4

$1,3

95.7

$2,7

30.6

0

10

20

30

40

50

60

70

80

90

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

2013 2014 2015 2016 2017 2018 2019 2020 2021


45

# Q2VC


1. Waymo — $2.5B, Mountain View, US — Automotive — Late-stage VC

2. Nubank — $1.5B, Sao Paulo, Brazil — Fintech — Series G

3. SpaceX — $1.2B, Hawthorne, US — Spacetech — Late-stage VC

4. Epic Games — $1B, Cary, US — Entertainment software — Late-stage VC

5. Perch — $775M, New York, US — Martech — Series A

6. Treeline Biosciences — $735M, Stamford, US — Biotechnology — Series A

7. SambaNova Systems — $678M, Palo Alto, US — Business/productivity software —

Series D

8. Relativity Space — $650M, Long Beach, US — Aerospace & defense — Series E

9. Wealthsimple — $600.7M, Toronto, Canada — Fintech — Series D

10. Transmit Security — $543M, Boston, US — Cybersecurity — Series A

Top 10 financings in Q2’21 in Americas


Capital flows into multiple market nichesGlobal | US Americas Europe | Asia

46

# Q2VC

3

6

4

5

17

9 10

2

8


In Q2’21, European VC-backed companies raised


Global | US | Americas Europe Asia

47

# Q2VC

48


Diversity of fintech areas attracting investment

VC investment in fintech remained very strong across Europe, in part due to the growing mix

of fintech companies attracting investment, from stock trading platform Trade Republic ($900

million) and digital insurance company WeFox ($650 million) to payments firm Mollie ($805

million), ‘buy now, pay later’ company Klarna ($639 million), and Starling Bank ($443 million).

Even straightforward concepts such as BNPL are seeing companies introducing unique value

propositions. In Q2’21, UK-based Zilch raised $80 million; Zilch provides BNPL direct to

consumers by working with Mastercard, rather than with various e-commerce engines.6

IPO and SPAC interest growing

Despite Deliveroo’s rocky IPO ride, interest in public listings continued to grow in Europe, in

terms of both IPOs and SPAC transactions. Q2’21 saw a number of successful IPOs, including

Israel-based business productivity company Monday.com and Sweden-based plant-based milk

company Oatly on the Nasdaq,7 and UK-based cybersecurity firm Darktrace and fintech

PensionBee on the LSE.

Maturing companies in Germany are also increasingly considering IPOs as an exit strategy,

and are beginning to look at what they need to do in order to be successful. This is quite

different than 12 to 24 months ago, when there was more modest IPO interest. One question

raised, however, is whether IPOs will substitute for larger Series D and E rounds, or whether

companies will remain private through later rounds before moving to IPO.

Interest in SPAC transactions also increased in Europe. During Q2’21, UK-based Babylon

Health agreed to a SPAC merger with Alkuri Global Acquisition Corp,8 while Israel-based

Innovid announced plans to merge with ION Acquisition Corp.9

Europe sees forth consecutive quarter of record VC investmentVC investment in Europe surged to a new high for the fourth straight quarter in Q2’21, crushing the previous record, driven by large raises by NorthVolt, Celonis, MessengerBird, Trade Republic, Mollie,

FlixBus, WeFox and Klarna. Valuations of companies across Europe continued to grow, with higher multiples being used in many cases compared to historical norms.

A sense of optimism, combined with a significant amount of cash and investors jumping on the investment train following trends such as e-commerce, B2B, and digital services has helped drive valuations.

UK continues to see robust VC investment

After a record quarter of investment in Q1’21, VC investment in the UK remained high in

Q2’21, driven in part by a strong COVID-19 vaccination program and businesses beginning

to feel more certain in the post-Brexit world. Fintech and healthtech attracted the largest

deals in Q2’21, including a $500 million raise by B2B payments firm SaltPay, a $444 million

raise by AI-powered drug discovery company Exscientia, a $443 million raise by digital

bank Starling Bank, and a $130 million raise by digital health company Huma. While later

stage deals attracted the majority of investment, interest in earlier stage deals grew

somewhat, with more businesses beginning to raise Series A and smaller rounds.

VC market continues to boom in Germany

VC investment in Germany reached a new high in Q2’21, led by the $1 billion raise by

business execution management company Celonis. With a valuation over $10 billion, the

funding round made Celonis Germany’s first decacorn. Participation in VC deals has

expanded in Germany and in other parts of Europe, with more participation by non-

traditional investors, such as sovereign wealth funds. From an ecosystem perspective,

Munich is quickly joining Berlin as a highly competitive tech hub, while ecosystems are

growing in Cologne and Hamburg.

Nordic region very attractive to investors

Investment in the Nordic region was incredibly strong in Q2’21, led by a $2.75 billion

investment in battery maker Northvolt AB, a $639 million raise by fintech Klarna, and a $270

million raise by digital health company Kry. With the significant amount of dry powder

available, numerous companies across sectors and across the region have been able to

attract large funding rounds. While Sweden accounted for the largest deals in Q2’21, the

rest of the Nordic countries also attracted impressive deals: Norway-based grocery platform

Oda raised $264 million, Finland-based digital health company Oura raised $100 million,

and Denmark-based drug discovery company ADCendo raised $60 million.


6 https://techcrunch.com/2021/04/19/uks-zilch-raises-80m-at-a-500m-valuation-for-its-direct-to-consumer-buy-now-pay-later-service/7 https://markets.businessinsider.com/news/stocks/oatly-stock-price-ipo-10-billion-valuation-plant-based-milk-2021-5-10304520008 https://www.cnbc.com/2021/06/03/online-health-startup-babylon-to-go-public-via-4point2-billion-spac-deal.html9 https://nocamels.com/2021/06/innovid-spac-merger-public-valuation/

https://techcrunch.com/2021/04/19/uks-zilch-raises-80m-at-a-500m-valuation-for-its-direct-to-consumer-buy-now-pay-later-service/

https://markets.businessinsider.com/news/stocks/oatly-stock-price-ipo-10-billion-valuation-plant-based-milk-2021-5-1030452000

https://www.cnbc.com/2021/06/03/online-health-startup-babylon-to-go-public-via-4point2-billion-spac-deal.html

https://nocamels.com/2021/06/innovid-spac-merger-public-valuation/

49


Ireland sees strongest quarter of VC investment ever

VC investment in Ireland was very robust in Q2’21. Health and biotech was of particular

interest to investors, with LetsGetChecked raising $150 million, GH Research raising $125

million, and Mainstay Medical raising $108 million. Investment in the space is likely to

increase over time given growing recognition of both the importance and value of health and

biotech innovations. The fintech sector also saw significant activity during Q2’21. Fenergo

gained unicorn status during the quarter, while e-commerce-focused financing and growth

platform Wayflyer raised $76 million.10 Even as companies in maturing sectors attracted

larger funding rounds, Ireland continued to see a diverse mix of earlier stage companies

raising funds, such as drone delivery company Manna Drones ($25 million) and gifting

platform Andopen ($8 million).

Serial entrepreneurs help drive VC market in Israel

VC investment in Israel was incredibly robust in Q2’2021, led by a $300 million raise by

e-commerce fraud prevention company Forter, a $250 million raise by financial accountability

platform company TipRanks, and a $243 million raise by incisionless surgery firm Insightec.

Israel’s serial entrepreneurs are a hot commodity and a large part of Israel’s strengthening

ability to grow companies into international entities rather than simply focusing on R&D.

Europe sees forth consecutive quarter of record VC investment, cont’d.Trends to watch for in Q2’21

VC investment in Europe is expected to remain robust heading into Q3’21, particularly in areas

such as fintech, healthtech, and B2B services, while investment in cybersecurity is expected to

grow significantly.


10 https://www.finsmes.com/2021/05/wayflyer-raises-76m-in-series-a-funding.html

https://www.finsmes.com/2021/05/wayflyer-raises-76m-in-series-a-funding.html

50


For the fourth time in a row, a new record in VC invested


Venture financing in Europe2013–Q2'21

Even after the significant surge in VC invested to kick off the

year, 2021 has recorded a new all-time high in VC invested,

while financing volume dipped but is likely to hold steady once

additional data is processed. The sheer growth in VC invested is

once again primarily driven by a growing population of mature

companies and extant unicorns that continue to command

significant sums, spanning multiple sectors.

… the sixth straight quarter that the

European venture ecosystem

recorded an increase in VC invested,

to new highs …


$6.1

$4.8

$4.3

$5.2

$5.1

$6.9

$6.3

$8.1

$8.7

$8.8

$7.3

$9.1

$10.3

$12.1

$10.6

$9.1

$9.8

$11.1

$15.0

$15.8

$23.9

$34.0

0

500

1,000

1,500

2,000

2,500

$0

$5

$10

$15

$20

$25

$30

$35

$40

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

2013 2014 2015 2016 2017 2018 2019 2020 2021


51


Deal sizes & up rounds continue to surge


Median deal size ($M) by stage in Europe2013–2021*

Up, flat or down rounds in Europe2013–2021*


$1.25

$2.4

$8.2

$0

$1

$2

$3

$4

$5

$6

$7

$8

$9

2013 2014 2015 2016 2017 2018 2019 2020 2021*


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013 2014 2015 2016 2017 2018 2019 2020 2021*

Up Flat Down

52


The Series D+ stage is approximately tripling 2020 figures


Median deal size ($M) by series in Europe2013–2021*


$1.7$0.7$9.50

$25.0

$75.0

$155.0

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

2013 2014 2015 2016 2017 2018 2019 2020 2021*

Seed Angel A B C D+

53


Capital increasingly flows across all stages in healthy sign


Deal share by series in Europe2013–2021*, number of closed deals

Deal share by series in Europe2013–2021*, VC invested ($B)


0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

2013 2014 2015 2016 2017 2018 2019 2020 2021*

Series D+

Series C

Series B

Series A

Angel & seed $0

$5

$10

$15

$20

$25

$30

$35

$40

$45

$50

2013 2014 2015 2016 2017 2018 2019 2020 2021*

54


Software continues to remain key area of focus for investors

European venture financings by sector2013–2021*, number of closed deals

European venture financings by sector2013–2021*, VC invested ($B)



0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013

2014

2015

2016

2017

2018

2019

2020

2021*

Commercial Services


Energy



IT Hardware

Media

Other

Pharma & Biotech

Software

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013

2014

2015

2016

2017

2018

2019

2020

2021*

55


CVCs continue to drive the record surge


Once again, a caveat must be noted: In a complex environment such as Europe, first-time fundings may

take longer to be ascertained and confirmed. However, 2021 has started off remarkably strong for even

this nascent cohort of companies, with a mammoth $3.3 billion invested over just over 1,000 financings.

This bodes well for future funding given investors’ clear optimism.

Once again, corporates played a key role in supporting the surge in investment over the past several

quarters in the European venture ecosystem, joining in a flurry of large financings that helped drive

aggregate associated deal value to $16.5 billion. This is not so much novel as the natural culmination of

an increasing imperative for corporate venture arms or their direct parents to remain involved in the

maturing European startup ecosystem, as part of forward-looking corporate strategies.

Corporate VC participation in venture deals in Europe2013–Q2'21

First-time venture financings of companies in Europe2013–2021*


$0.9

$1.3

$1.1

$1.1

$1.2

$1.0

$1.8

$0.9

$1.2

$1.8

$1.4

$1.3

$2.6

$1.8

$1.7

$1.9

$1.8

$2.7

$2.1

$2.9

$2.9

$3.4

$3.4

$3.5

$3.7

$5.0

$4.7

$3.9

$4.0

$5.6

$7.9

$6.5

$10.7

$16.5

0

50

100

150

200

250

300

350

400

450

500

$0

$2

$4

$6

$8

$10

$12

$14

$16

$18

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

2013 2014 2015 2016 2017 2018 2019 2020 2021


$3.1

$2.7

$2.8

$3.1

$3.2

$3.8

$3.1

$3.8

$3.3

0

500

1,000

1,500

2,000

2,500

3,000

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

$4.0

2013 2014 2015 2016 2017 2018 2019 2020 2021*



56


Robust exit value supports recycling of capital


Venture-backed exit activity in Europe2013–Q2'21

For a year straight now, aggregate exit value has stayed above $10 billion

at minimum for each quarter, even as volume has climbed significantly.

That rise in exit count however has also led to the remarkable surge in

liquidity in 2021 to date, with nearly $60 billion notched. This provides a

very encouraging backdrop for founders and backers of mature European

companies across the venture ecosystem.


… with close to $60 billion in exit

value seen in 2021 to date, liquidity

trends continue to encourage record

investment.

$2.1

$3.5

$1.8

$6.3

$3.7

$1.9

$6.4

$16.9

$5.9

$5.2

$3.3

$8.2

$7.1

$3.8

$4.2

$1.7

$4.5

$9.0

$3.1

$4.7

$2.5

$32.8

$12.7

$4.8

$2.4

$2.5

$5.0

$8.0

$1.7

$4.2

$10.1

$11.0

$32.2

$24.2

0

50

100

150

200

250

300

$0

$5

$10

$15

$20

$25

$30

$35

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

2013 2014 2015 2016 2017 2018 2019 2020 2021


57


Listings set a new high in exit value already


Venture-backed exit activity (#) by type in Europe2013–2021*

Venture-backed exit activity ($B) by type in Europe2013–2021*


$0

$10

$20

$30

$40

$50

$60

2013 2014 2015 2016 2017 2018 2019 2020 2021*


0

100

200

300

400

500

600

700

800

2013 2014 2015 2016 2017 2018 2019 2020 2021*


58


Healthy fundraising activity persists

Source: Venture Pulse, Q2’21, Global Analysis of Venture Funding, KPMG Enterprise. *As of June 30, 2021. Data provided by

PitchBook, July 21, 2021.

European venture fundraising2013–2021*

Taking pulse of fundraising trends at the midyear mark, it is clear that the European ecosystem is

seeing a level of fundraising activity persist at what could be considered a healthy rate. Although fund

counts could diminish this year based on the current pace, total capital committed to European funds

has eclipsed $11 billion by a robust amount. Any slowdown is likely driven by the previous years in the

overall fundraising cycle, wherein multiple European firms closed on funds recently and thus have yet

to return to the fundraising trail in order to raise successor vehicles. The bulk of VC raised in the

period from 2018 to 2020 is still being invested, as is evidenced by the surges on the dealmaking side.

Hence, a potential rise in fundraising could occur after this temporary plateau.

$10.9

$11.6

$11.2

$18.5

$25.4

$16.7

$21.2

$19.7

$11.6

0

50

100

150

200

250

300

$0

$5

$10

$15

$20

$25

$30

2013 2014 2015 2016 2017 2018 2019 2020 2021*



59


Upper-end funds set new high in proportion of VC committed


Venture fundraising (#) by size in Europe2013–2021*

First-time vs. follow-on venture funds (#) in Europe2013–2021*


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013 2014 2015 2016 2017 2018 2019 2020 2021*

$1B+

$500M-$1B

$250M-$500M

$100M-$250M

$50M-$100M

Under $50M

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013 2014 2015 2016 2017 2018 2019 2020 2021*


60


The latest stages climb to stratospheric highs


Median pre-money valuation ($M) by series in Europe2018–2021*

$4.9

$3.75 $23.1

$55.3

$235.9

$1,481.4

-$100

$100

$300

$500

$700

$900

$1,100

$1,300

$1,500

2018 2019 2020 2021*

Seed Angel A B C D+


61


UK sees record tally of VC invested already

There is growing optimism as

we emerge from the pandemic

and it is no surprise to see a

linkage between this optimism

and the extent of vaccination

programmes. In the UK, it’s

really positive to see deal

volumes increasing as well as

deal value, creating more of a

pipeline for the major funding

rounds of the future. Access

to talent post Brexit will

continue to be a concern for a

while, but the explosion in

remote and hybrid working in

the last year or so has eased

those concerns somewhat as

global talent is perhaps more

accessible than ever.

“

”Kevin SmithHead of KPMG Private Enterprise in EMA,

Global Co-Leader — Emerging Giants,

KPMG Private Enterprise, KPMG

Partner, KPMG in the UK


Venture financing in the United Kingdom2013–Q2'21


$0.8

$1.1

$0.7

$1.0

$1.0

$1.2

$1.0

$1.3

$1.5

$1.0

$2.2

$2.0

$1.6

$1.5

$1.5

$1.6

$1.4

$2.7

$2.2

$4.1

$2.5

$3.1

$2.6

$3.1

$3.8

$3.6

$3.5

$3.0

$3.1

$3.6

$3.8

$5.2

$8.0

$8.9

0

100

200

300

400

500

600

700

800

$0

$1

$2

$3

$4

$5

$6

$7

$8

$9

$10

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2013 2014 2015 2016 2017 2018 2019 2020 2021


61

# Q2VC

62


London remains lodestar of British venture ecosystem

Source: Venture Pulse, Q2'21, Global Analysis of Venture Funding, KPMG Enterprise. *As of June 30, 2021. Data provided by PitchBook, July 21, 2021.

Venture financing in London2013–Q2'21


$0.5

$0.6

$0.3

$0.5

$0.6

$0.6

$0.6

$0.7

$0.9

$0.5

$1.2

$1.1

$0.9

$0.9

$0.9

$0.8

$0.7

$2.1

$1.4

$3.5

$1.6

$1.8

$1.7

$2.0

$2.3

$2.6

$2.3

$2.1

$1.7

$2.5

$2.9

$3.7

$5.1

$5.6

0

50

100

150

200

250

300

350

400

450

$0

$1

$2

$3

$4

$5

$6


2013 2014 2015 2016 2017 2018 2019 2020 2021


63


Even as financing volume takes a breather, VC invested surges

We are all very focussed on

our health and wellbeing

and the pandemic has

brough this into sharp

focus. It is no surprise then

that investors are keenly

focussed on health-tech

and biotech and the

benefits that can be

achieved by supporting

these companies to

develop life enhancing

products and services. This

quarter we saw significant

investments made in these

areas in Ireland.

“

”Anna ScallyPartner, Head of Technology and

Fintech Lead,

KPMG in Ireland


Venture financing in Ireland2013–Q2'21


$142.8

$50.6

$158.6

$108.6

$265.8

$180.9

$32.4

$97.4

$187.0

$222.2

$164.7

$38.9

$313.8

$100.6

$146.1

$259.0

$199.9

$96.7

$175.3

$102.5

$349.0

$517.0

$72.6

$409.8

$139.1

$515.5

$117.5

$111.3

$111.5

$219.3

$188.9

$464.1

$250.2

$491.5

0

50

100

150

200

250

$0

$100

$200

$300

$400

$500

$600


2013 2014 2015 2016 2017 2018 2019 2020 2021


63

# Q2VC

64


VC invested jumps to cap remarkable stretch of growth

In Germany, VC investment is

robust, but investors are still

focused on late stage deals.

The investments we are

seeing are still very much

around delivery, e-commerce

and other digital services,

including companies looking

to optimize and enable

businesses digitally. We’re

seeing interest in a wide-

range of these businesses,

but the best example this

quarter is Celonis, which just

became our first decacorn.

”Dr. Ashkan KalantaryPartner, Deal Advisory Venture

Services

KPMG in Germany


Venture financing in Germany2013–Q2'21


$203.3

$388.9

$648.4

$254.6

$519.7

$426.1

$1,7

59.1

$407.5

$1,0

64.8

$630.0

$909.1

$821.7

$595.9

$564.9

$543.8

$672.8

$538.4

$1,2

28.3

$822.6

$891.9

$1,6

94.1

$877.0

$782.9

$1,4

12.8

$1,1

96.5

$1,4

78.9

$1,9

19.2

$1,4

34.3

$1,2

25.6

$1,8

48.4

$2,1

65.6

$2,5

68.4

$2,9

57.5

$6,0

39.7

0

50

100

150

200

250

300

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000


2013 2014 2015 2016 2017 2018 2019 2020 2021


64

# Q2VC

“

65


Berlin sees new record set, pushing well past $3B+


Venture financing in Berlin2013–Q2'21


A lot of companies in

Germany — and elsewhere

— are looking to optimize

their internal processes.

They’re all facing the problem

that critical human resources

are becoming scarcer and

more expensive. With the war

for talent becoming more

difficult, these companies

looking for ways to optimize

business processes and

streamline processes

internally. It’s a very hot topic

for corporates and it’s driving

a lot of their investment.

“

”Tim Dümichen Partner, KPMG in Germany

$73.7

$273.1

$620.6

$142.5

$407.0

$198.7

$923.3

$149.6

$905.5

$511.1

$748.5

$324.5

$234.4

$344.9

$166.5

$337.5

$293.2

$989.8

$417.4

$402.1

$1,2

43.8

$376.2

$173.9

$831.3

$517.3

$1,2

17.5

$407.4

$685.2

$628.9

$1,2

80.2

$992.0

$1,7

50.2

$1,5

14.6

$3,3

61.2

0

20

40

60

80

100

120

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000


2013 2014 2015 2016 2017 2018 2019 2020 2021


65

# Q2VC

66


France sees impact of outliers while Spain takes a pause



France continues to see the impact of more maturing companies being able to close on significantly

sized rounds, with now 10 companies having closed upon financings sized at $100 million or more

already in 2021; such a profusion of capital puts this year on track to see a new record in VC invested.

Spain saw a return to recent historical approximates of VC invested while deal count dipped, after a

starting quarter to 2021 that saw numerous outlier financings help set a new record for VC invested, even

as financing volume embarked upon a mild slide.

Venture financing in Spain2013–Q2'21

Venture financing in France2013–Q2’21


$112.3

$119.6

$77.5

$50.6

$109.1

$78.5

$169.8

$44.4

$138.9

$85.4

$161.7

$90.3

$85.0

$365.6

$51.4

$118.7

$127.2

$279.4

$171.0

$102.9

$322.6

$228.0

$267.3

$87.3

$142.3

$446.3

$317.4

$277.9

$232.3

$273.4

$687.3

$408.0

$1,4

92.9

$411.0

0

20

40

60

80

100

120

140

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

2013 2014 2015 2016 2017 2018 2019 2020 2021


$289.6

$399.5

$220.2

$275.4

$360.6

$408.8

$361.2

$330.4

$465.1

$485.5

$655.0

$300.4

$450.0

$502.3

$508.0

$883.5

$794.1

$716.7

$739.7

$541.1

$1,1

34.9

$1,3

03.3

$765.4

$1,0

87.6

$1,3

32.0

$1,4

50.8

$970.3

$1,1

71.2

$1,7

32.0

$1,4

81.6

$2,1

55.9

$1,7

77.6

$1,7

94.1

$3,6

22.7

0

50

100

150

200

250

300

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

2013 2014 2015 2016 2017 2018 2019 2020 2021


67



Paris joins Berlin in seeing new quarterly record of $3B+

Venture financing in Paris2013–Q2'21


$89.5

$156.1

$56.1

$112.7

$150.3

$162.4

$202.3

$193.9

$113.1

$290.7

$432.2

$81.6

$280.6

$286.4

$341.7

$460.1

$597.7

$518.3

$495.4

$254.5

$697.4

$901.2

$394.0

$705.8

$798.1

$993.8

$422.6

$776.8

$985.1

$1,0

72.7

$1,4

88.5

$875.1

$874.9

$3,0

21.2

0

20

40

60

80

100

120

140

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500


2013 2014 2015 2016 2017 2018 2019 2020 2021


68


Another record quarter in VC

investment in the Nordics.

There is also a lot of attention

around the IPO market right

now. We have a lot of IPOs in

every country in the region –

not just venture-backed IPOs,

but other types of IPOs as

well. IPOs to foreign

exchanges following the

footsteps of strong IPOs by

Oatly (‘Q2 Nasdaq) and

Trustpilot (‘Q1 LSE) can be

an emerging trend to follow.

”Jussi PaskiHead of Startup Services

KPMG in Finland

Nordics continue to rake in large sums as key unicorns expand


Venture financing in the Nordics2013–Q2'21


$172.7

$408.9

$177.7

$395.1

$359.4

$307.4

$189.4

$348.1

$431.8

$909.5

$364.7

$449.9

$1,3

31.9

$293.5

$363.1

$577.8

$597.7

$495.4

$520.3

$675.9

$617.4

$824.5

$548.0

$619.7

$1,1

37.1

$2,0

06.6

$955.7

$716.4

$1,1

82.5

$951.5

$2,3

51.7

$1,6

68.5

$3,8

59.7

$5,6

07.7

0

50

100

150

200

250

300

350

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000


2013 2014 2015 2016 2017 2018 2019 2020 2021


68

# Q2VC

“

69


Israeli companies keep attracting foreign investment


Venture financing in Israel2013–Q2'21


Israel has always been known

for its strong R&D and M&A,

but now our reputation is

strengthening and broadening.

The market is becoming

mature enough that startups

can stay in Israel longer, grow,

and become international

businesses themselves rather

than simply being acquired.

“

”Dina Pasca-RazHead of Technology

KPMG in Israel

$281.5

$248.7

$280.9

$319.7

$289.1

$248.1

$262.4

$345.6

$704.7

$286.8

$274.7

$439.3

$691.0

$554.7

$418.9

$233.2

$542.7

$615.1

$662.1

$630.7

$1,0

29.9

$650.2

$873.6

$1,1

57.2

$1,0

73.0

$936.0

$1,0

82.8

$722.4

$886.1

$977.9

$1,4

95.4

$1,5

37.4

$2,3

06.9

$2,8

15.2

0

20

40

60

80

100

120

140

160

180

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000


2013 2014 2015 2016 2017 2018 2019 2020 2021


69

# Q2VC


1. Northvolt — $2.75B, Stockholm, Sweden — Automotive cleantech — Series E

2. Celonis — $1B, Munich, Germany — Business/productivity software — Series D

2. MessageBird — $1B, Amsterdam, Netherlands — Cloudtech — Series C

4. Trade Republic — $900M, Berlin — Fintech — Series C

5. Mollie — $805.8M, Amsterdam — Fintech — Series C

6. FlixBus — $650M, Munich — Automotive — Series G

6. Wefox — $650M, Berlin — Fintech— Series C

7. Klarna — $639M, Stockholm — Fintech— Late-stage VC

8. CMR Surgical — $600M, Cambridge — Surgical devices — Series D

9. Getir — $555M, Istanbul — Internet retail — Series D

Top 10 financings in Q2’21 in Europe



A diverse array of geographies & sectors draws fundingGlobal | US | Americas Europe Asia

70

# Q2VC

64

1

2

52

7

6

8

9


In Q2’21, VC-backed companies in the Asia region raised

$38B across 1,998 deals

Global | US | Americas | Europe Asia

71

# Q2VC

72


China sees numerous $100 million+ VC funding rounds

VC investment in China held steady during Q2’21, with a wide variety of $100 million+ deals,

including Horizon Robotics ($1.5 billion corporate venture capital), Dingdong Maicai $700

million), digital supply chain provider Xingyun Group ($600 million), retailer Zhuanzhuan ($390

million), e-grocery company Dingdong Machai ($330 million), home fitness company Fiture

Technology ($300 million), and cloud services provider Beisen Cloud Computing ($260 million).

Given the increasing government concern and scrutiny of big tech companies in China, there

has been a growing opportunity for second and third tier tech companies focused on areas such

as e-commerce, the sharing economy, and logistics to attract more attention from VC investors.

While many of these players are still working to scale and grow sufficient volume to become

profitable, it could be the beginning of a transition to less concentrated market participation.

India sees VC investment fly through the roof

During Q2’21, VC investment in India soared past the previous record high set in Q4’19, driven

not only by VC investors but also by more traditional funds feeling a sense of FOMO given the

broad applicability of digital business models in the pandemic. A diversity of companies are

attracting VC investment in India, in particular those focused on direct-to-consumer offerings,

including e-commerce, food delivery, hyper-local grocery delivery, video sharing, and gaming.

Investors continued to pour money into edtech companies in India, including BYJU, which raised

a $1.5 billion funding round this quarter. Food delivery was also very hot in Q2’21, led by

Swiggy’s $800 million raise.

VC investment in Asia strengthens as India sets quarterly funding record

VC investment in Asia grew in Q2’21, in part driven by surging investment in India, including a $1.5 billion raise by BYJU, an

$800 million raise by Swiggy, and a $502 million raise by ShareChat.

Exit activity surges in Asia

Exit activity surged in Asia during Q2’21, particularly in China — which saw a ten-quarter high

in exit value, and in India, which saw an eleven-quarter high in exit value and a record number

of exits.

IPO activity was quite strong in Asia this quarter. While domestic IPOs may have slowed

somewhat due to new regulations coming in, there were a number of high profile IPOs by

Chinese companies in the US. Full Truck Alliance (also known as Manbang) also raised $1.6

billion in an US IPO this quarter. In India, food delivery giant Zomato also filed for an IPO this

quarter.

Secondary listings and SPACs gain attention in Hong Kong

Secondary listings in Hong Kong continued apace in Q2’21, with 2021’s total value of

secondary listings already surpassing 2020’s previous peak annual high. The ongoing

secondary exit activity continues to be prompted by SEC rules and regulatory issues related to

the inspection of audit work papers related to US-listed Chinese companies. Many China-

based companies see listing on the HKSE as an alternative option in the event regulatory

challenges in the US are not resolved.

Hong Kong has also started to see some SPAC interest, although much less than in the US,

with a number of investors and family offices in Hong Kong looking to create SPACs. Many of

these investors are taking a cautious approach to SPAC planning.

During Q2’21, the Monetary Authority of Singapore (MAS) completed consultations on the

proposed move to allow SPACs to list on the SGX main board.11 The HKSE is planning to

issue a consultation on the listing of SPACs in Hong Kong.


11 https://www.ifcreview.com/news/2021/april/singapore-jurisdiction-consults-on-spacs-listing-framework/

https://www.ifcreview.com/news/2021/april/singapore-jurisdiction-consults-on-spacs-listing-framework/

73


Southest Asia: a hotbed of deals activity

The highly competitive Southeast Asia market attracted a number of large deals this quarter,

with Indonesia-based express delivery company J&T Express’s $2 billion raise making it the

largest deal in Asia during Q2’21. Indonesia-based platform giant Gojek also raised $300

million, just prior to its merger with e-commerce platform Tokopedia. GoTo Group, the

combined company valued at approximately $18 billion, is expected to be a dominant market

player offering financial services, e-commerce, ride hailing, and delivery, not only in Indonesia,

but across Southeast Asia.12

During Q2’21, Singapore-based Grab, Gojek’s primary competitor, announced a delay in the

expected finalization of its merger with SPAC Altimeter Growth Corp. The company is

currently working to meet SEC requirements; the merger is now expected to occur by the end

of 2021, where previously the company had targeted end of Q2’21.13 During the quarter,

Singapore also saw a number of large VC deals, including a $642 million raise by business

productivity firm Trax and a $360 million funding round by used car marketplace Carro.14

Fintech remains very hot

Fintech continued to be a very attractive space for VC investors in Asia during Q2’21. India, in

particular, saw a growing range of fintech companies raising significant funding rounds during

the quarter, including CRED ($215 million), an app that incentivises customers to pay their

credit card bills on time, payments firm RazorPay ($160 million), subscription billing service

ChargeBee ($125 million), B2B e-commerce firm OfBusiness ($110 million), and Groww ($84

million), an investment app targeting millennials.

VC investment in Asia strengthens as India sets quarterly funding record, cont’d.

12 https://techwireasia.com/2021/06/tokopedia-gojek-finalize-merger-with-chinese-tech-giants-blessing/13 https://www.reuters.com/business/southeast-asias-grab-says-complete-40-bln-spac-merger-q4-2021-06-09/14 https://www.cnbc.com/2021/06/15/singapore-start-up-carro-raises-360-million-from-softbank-and-others.html

Japan’s startup system attracting larger deals

During Q2’21, Japan attracted several large deals, including a $120 million raise by Buy Now

Pay Later (“BNPL”) provider, ‘buy now, pay later’ focused Paidy15 — which earned the

company unicorn status, a $143 million raise by HR management company SmartHR — which

also became a unicorn, a $60 million raise by QR code payment gateway Netstars16, and a

$50 million raises by digital medtechfirm Allmand molecular analysis diagnostics company

Atonarp17.

The startup ecosystem in Japan continued to mature, in part due to the government’s

increasing focus on encouraging innovation and entrepreneurship. The government developed

its Integrated Innovation Strategy 202018 to focus its efforts on creating innovation capacity

and strengthening research capacity in the country in the wake of COVID-19. Japan’s Ministry

of Economic Trade and Industry also set a goal to help develop 20 unicorns by 202319.

COVID-19 continues to drive attention to health and biotech

The large demand from governments looking for specific services ranging from vaccine

production to clinical trial services has prompted a much broader focus on biotech, health

services, and healthtech across Asia. VC investment in the space was particularly strong in

China during Q2’21, with raises by Jinwei ($123 million), Elpiscience ($105 million),

AbogenBio ($91 million) and Duality Biologics($90 million).

Trends to watch for in Asia

VC investment is expected to continue to be strong in Asia, particularly in areas such as

fintech, e-commerce, edtech, health and biotech, and logistics. IPO activity will be a key area

to watch heading into Q3’21, particularly in India. If Zomato and others have a positive

showing and are very well subscribed, VC investors will likely gain additional confidence in

India’s potential.

15 https://paidy.com/media_center/press/article/45Uuag8qPWVIamEgNqb118 16 https://www.netstars.co.jp/en/262/ 17 https://www.atonarp.com/atonarp-news/atonarp-announces-50m-series-d-financing-to-scale-its-molecular-sensing-and-digital-diagnostics-

testing-platforms 18 https://www8.cao.go.jp/cstp/english/outline_strategy_2020.pdf 19 https://www.meti.go.jp/english/press/2018_06/0611_003_00.html


https://www.meti.go.jp/english/press/2018_06/0611_003_00.html

https://www8.cao.go.jp/cstp/english/outline_strategy_2020.pdf

https://www.atonarp.com/atonarp-news/atonarp-announces-50m-series-d-financing-to-scale-its-molecular-sensing-and-digital-diagnostics-testing-platforms

https://www.atonarp.com/atonarp-news/atonarp-announces-50m-series-d-financing-to-scale-its-molecular-sensing-and-digital-diagnostics-testing-platforms

https://www.netstars.co.jp/en/262/

https://paidy.com/media_center/press/article/45Uuag8qPWVIamEgNqb118

https://www.cnbc.com/2021/06/15/singapore-start-up-carro-raises-360-million-from-softbank-and-others.html

https://www.reuters.com/business/southeast-asias-grab-says-complete-40-bln-spac-merger-q4-2021-06-09/

https://techwireasia.com/2021/06/tokopedia-gojek-finalize-merger-with-chinese-tech-giants-blessing/

74


The VC market in China is

diversifying, with a broader

range of sectors attracting

investments, including

delivery, fitness, B2B

services, and others. The

absence of major mega-

deals provides an opportunity

for other companies to scale

and grow, which will likely

help spur additional

investments in the future.

“

”Egidio ZarrellaPartner, Clients and

Innovation

KPMG China

2021 continues to see robust rates of fundingGlobal | US | Americas | Europe Asia


Funding levels continued at a robust pace

throughout the Asia-Pacific ecosystem in the

first half of 2021, with $38.0 billion invested

across a historically healthy tally of completed

rounds. Much dry powder remains on hand

across the ecosystem, especially as domestic

governments look to encourage further local

innovation in key sectors.

Venture financing in Asia2013–Q2'21

$19.6

$27.7

$14.2

$14.6

$11.8

$22.9

$25.0

$23.0

$36.7

$50.4

$31.6

$34.7

$19.5

$17.9

$87.7

$31.4

$20.1

$21.9

$28.8

$36.2

$42.8

$38.0

0

500

1,000

1,500

2,000

2,500

3,000

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

2013 2014 2015 2016 2017 2018 2019 2020 2021


74

# Q2VC

75


”

The early stage heats up somewhat


Median deal size ($M) by series in Asia2014–2021*

$1.0$0.8

$10.0

$18.5

$35.1

$100.0

$0

$20

$40

$60

$80

$100

$120

2014 2015 2016 2017 2018 2019 2020 2021*

Seed Angel A B C D+


76



Early-stage volume makes modest gains

Deal share by series in Asia2013–2021*, number of closed deals

Deal share by series in Asia2013–2021*, VC invested ($B)


0

1,000

2,000

3,000

4,000

5,000

6,000

2013 2014 2015 2016 2017 2018 2019 2020 2021*

Series D+

Series C

Series B

Series A

Angel & seed$0

$20

$40

$60

$80

$100

$120

2013 2014 2015 2016 2017 2018 2019 2020 2021*

77


Biotech, pharma & software bolster overall funding levels

Asia venture financings by sector2013–2021*, number of closed deals

Asia venture financings by sector2013–2021*, VC invested ($B)



0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013

2014

2015

2016

2017

2018

2019

2020

2021*

Commercial Services


Energy



IT Hardware

Media

Other

Pharma & Biotech

Software

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013

2014

2015

2016

2017

2018

2019

2020

2021*

78


Corporates continue to support healthy levels of VC activity

Source: Venture Pulse, Q2'21, Global Analysis of Venture Funding, KPMG Enterprise. *As of June 30, 2021. Data provided by PitchBook, July 21, 2021.

Corporate participation in venture deals in Asia2013–Q2'21

Corporates played a key role in supporting the rise in VC investment after the

COVID-19 shock in Q1 2020; the decline between the end of 2020 and Q1 2021 is

likely temporal and not really attributable to any significant factors. Looking ahead,

it is likely they will continue to be key players in the regional venture ecosystem.

…the continued 2021 recovery is

increasingly the result of the longer-term

motivations of CVCs and their corporate

counterparts’ interests in fostering longer-

term economic growth, especially in

partnership with governments.


$1.0

$1.7

$0.9

$1.4

$2.5

$2.8

$2.6

$4.4

$6.3

$6.8

$17.6

$6.1

$12.6

$20.5

$7.9

$7.8

$5.5

$13.7

$17.2

$10.5

$19.5

$39.1

$20.1

$20.7

$10.1

$9.1

$78.4

$21.2

$12.6

$14.0

$15.6

$20.0

$17.3

$19.7

0

100

200

300

400

500

600

700

800

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

2013 2014 2015 2016 2017 2018 2019 2020 2021


79


The new anti-competition law

in China will help to level the

playing field in the longer run

and provide more room for

other platform players to enter

the market to encourage

competition and innovation,

making Chinese companies

even more competitive locally

and globally.

“

”Irene ChuPartner, Head of New Economy

and Life Sciences, Hong Kong

Region,

KPMG China

Q2 2021 sees normalization after record Q1


Venture-backed exit activity in Asia2013–Q2'21

After a record-breaking quarter thanks to a flurry of

debuts across exchanges spanning the region, exit

volume has subsided somewhat, though it is worth

noting that exit value remained quite healthy relative

to historical levels. A potential factor in the diminution

of exit flow is China’s ongoing efforts to step up its

data privacy regulations to protect consumers and

better align with international norms. It remains to be

seen how new policies may affect companies’ choices

as to viable exit routes.


$1.1

$1.2

$1.6

$5.7

$1.2

$47.6

$3.0

$8.6

$4.6

$8.7

$3.3

$12.0

$6.5

$4.5

$5.8

$7.6

$7.4

$6.0

$11.4

$30.6

$5.0

$46.2

$113.7

$11.3

$8.0

$24.8

$25.1

$22.7

$19.7

$24.3

$48.4

$45.9

$149.2

$35.5

0

20

40

60

80

100

120

140

160

180

$0

$20

$40

$60

$80

$100

$120

$140

$160

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

2013 2014 2015 2016 2017 2018 2019 2020 2021


79

# Q2VC

80



Record Q1 debuts still leave 2021 as most lucrative year on recordVenture-backed exit activity (#) by type in Asia2013–2021*

Venture-backed exit activity ($B) by type in Asia2013–2021*


$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

$200

2013 2014 2015 2016 2017 2018 2019 2020 2021*


$0

$100

$200

$300

$400

$500

$600

2013 2014 2015 2016 2017 2018 2019 2020 2021*


81


Fundraising trends look set to repeat, with rising VC committed

Source: Venture Pulse, Q2’21, Global Analysis of Venture Funding, KPMG Enterprise. *As of June 30, 2021. Data provided

by PitchBook, July 21, 2021.

Venture fundraising in Asia2013–2021*

After a sustained subsiding, the fundraising cycle in the region looks set to exceed the levels

notched last year in terms of capital committed, even if fund counts remain roughly the same. That

is likely due to domestic demand spurring up and governments continuing to seek to incentivize

the local capital ecosystem to grow.

The fundraising cycle looks as if it is

reverting to healthy plateau, with $15.3 billion

in VC committed putting 2021 on pace to

approximate 2020.

$6.4

$12.8

$30.7

$42.9

$44.5

$35.7

$25.9

$21.3

$15.3

0

50

100

150

200

250

300

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

$50

2013 2014 2015 2016 2017 2018 2019 2020 2021*



82



Follow-on fundraising predominates in 2021 to date

Venture fundraising (#) by size in Asia2013–2021*

First-time vs. follow-on venture funds (#) in Asia2013–2021*


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013 2014 2015 2016 2017 2018 2019 2020 2021*


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013 2014 2015 2016 2017 2018 2019 2020 2021*


83


”

The latest stage rebounds


Median pre-money valuation ($M) by series in Asia2017–2021*

$4.5$3.5

$77.4

$226.8$260.2

$850.0

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,000

2017 2018 2019 2020 2021*

Seed Angel A B C D+


84


We have seen more and

more tech enabled

companies in India raising

funds from the capital

markets. This opens a new

avenue for early, mid and late

stage financial sponsors to

cash in on their investments.

This is a significant shift from

an exit route available to

financial investors previously,

which will only increase

the attractiveness of

these businesses.

“

”Nitish PoddarPartner and National Leader,

Private Equity

KPMG in India

India sees surge to near-$8B+ in VC invested, a new recordVenture financing in India2013–Q2'21

$276.3

$349.2

$305.8

$696.6

$498.9

$897.7

$1,7

61.3

$2,2

50.5

$1,3

27.1

$2,3

40.9

$3,4

79.2

$1,4

05.9

$1,0

68.9

$769.3

$1,2

60.8

$586.4

$1,5

76.4

$2,0

88.8

$5,2

77.3

$1,8

66.6

$1,7

56.1

$1,6

87.9

$2,1

85.6

$2,1

21.4

$2,0

94.4

$3,0

03.2

$3,3

36.4

$5,8

52.9

$2,7

22.1

$1,3

82.6

$4,2

16.2

$3,6

80.7

$3,0

33.6

$7,7

65.9

0

50

100

150

200

250

300

350

400

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000


2013 2014 2015 2016 2017 2018 2019 2020 2021


84

# Q2VC



85


”

A decline in mega-deals belies ongoing health in financing volume

Venture financing in China2013–Q2'21


$1.5

$1.4

$0.9

$1.1

$3.9

$3.6

$3.7

$5.4

$10.4

$8.9

$21.2

$9.1

$17.1

$25.7

$10.6

$12.8

$9.1

$18.5

$16.1

$19.6

$28.7

$45.6

$26.5

$26.4

$14.4

$11.3

$79.9

$17.2

$10.6

$13.3

$20.9

$29.4

$35.1

$19.4

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90


2013 2014 2015 2016 2017 2018 2019 2020 2021



86


Australia sees yet another record quarter for VC invested


Venture financing in Australia2013–Q2'21


$58.8

$54.7

$31.5

$127.9

$90.0

$110.9

$77.6

$80.0

$125.8

$121.2

$92.3

$206.4

$120.1

$243.8

$162.0

$127.7

$140.1

$259.5

$144.0

$183.2

$282.2

$260.6

$435.0

$374.0

$354.0

$317.5

$441.7

$475.0

$495.9

$542.0

$289.7

$547.9

$769.7

$907.0

0

20

40

60

80

100

120

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,000


2013 2014 2015 2016 2017 2018 2019 2020 2021


87


Japan’s financing trends remain robust


Venture financing in Japan2013–Q2'21


$112.0

$106.5

$596.0

$93.4

$132.7

$230.2

$216.0

$129.5

$191.1

$211.4

$150.7

$423.5

$296.7

$228.6

$273.4

$290.0

$278.0

$287.4

$393.2

$401.9

$810.1

$352.6

$725.1

$463.4

$593.9

$1,0

30.6

$832.9

$735.5

$736.4

$871.0

$813.1

$565.4

$898.3

$813.8

0

20

40

60

80

100

120

140

160

180

200

$0

$200

$400

$600

$800

$1,000

$1,200


2013 2014 2015 2016 2017 2018 2019 2020 2021


Japan’s VC market is maturing

rapidly, in parallel with the

government’s increased

commitment to support

innovation and startups. The

combination of increased

funding availability, market

maturity and entrepreneurial

sophistication is helping to

accelerate scaling of ventures

such as SmartHR in tandem

with larger funding rounds.

The large addressable market

and number of opportunities

for entrepreneurial success

point to continued growth in

venture formation and funding

in Japan.

“

”Paul FordPartner, Head of Private Equity,

KPMG Japan/M&A Deal Analytics

Lead, KPMG FAS, Leader of

Transaction Services,

KPMG Japan, KPMG FAS

87

# Q2VC


1. J&T Express — $2B, Jakarta, Indonesia — Logistics — Late-stage VC

2. BYJU’S — $1.55B, Bengaluru, India — Edtech — Series F

3. Horizon Robotics — $1.5B, Beijing, China — Semiconductors — Corporate

4. Swiggy — $800M, Bengaluru, India — Foodtech — Series J

5. Dingdong Maicai — $700M, Shanghai, China — E-commerce — Series D

6. Trax — $642M, Singapore — Business/productivity software — Series E

7. Xingyun Group — $600M, Shenzhen, China — Supply chain services — Series C2

8. ShareChat — $502M, Bengaluru, India — Social/platform software — Series E

9. Toss — $410M, Seoul, South Korea — Fintech — Late-stage VC

10. Zhuanzhuan — $390M, Beijing, China — E-commerce — Series C

Top 10 financings in Q2’21 in Asia-Pacific



A diverse array of sectors are on exhibit across the top financings in Q2



88

# Q2VC

6

1

910

8

5

7

42

3

89


KPMG Private Enterprise Emerging Giants Network.From seed to speed, we’re here throughout your journey

Contact us:

Conor MooreCo-Leader,


Emerging Giants Network

E: [email protected]

Kevin SmithCo-Leader,


Emerging Giants Network

E: [email protected]

Global | US | Americas | Europe | Asia

Canada

US

Mexico

Peru

Chile

Brazil

Uruguay

Venezuela

Bermuda

Iceland

South Africa

Russia

China

India

Bangladesh

Australia

New Zealand

Japan

South Korea

Taiwan

(Jurisdiction)

Hong Kong

(SAR, China)

Vietnam

Singapore

Cambodia

Finland

Sweden

NorwayLatvia

LithuaniaPoland

SlovakiaCzech

Ukraine

Turkey

CyprusIsrael

Romania

Greece

MaltaTunisia

ItalySpain

Portugal

FranceLuxembourg

Switzerland

Channel Islands

IrelandUK

Netherlands

DenmarkGermany

Austria

89

# Q2VC

90


About us

About KPMG Private Enterprise

You know KPMG, you might not know KPMG Private Enterprise. KPMG Private Enterprise advisers in KPMG firms around the world are

dedicated to working with you and your business, no matter where you are in your growth journey — whether you’re looking to reach new

heights, embrace technology, plan for an exit, or manage the transition of wealth or your business to the next generation. You gain access to

KPMG’s global resources through a single point of contact — a trusted adviser to your company. It is a local touch with a global reach.

The KPMG Private Enterprise Global Network for Emerging Giants has extensive knowledge and experience working with the startup

ecosystem. Whether you are looking to establish your operations, raise capital, expand abroad, or simply comply with regulatory

requirements — we can help. From seed to speed, we’re here throughout your journey.


https://home.kpmg.com/xx/en/home/services/enterprise/business-beyond-borders.html

https://home.kpmg.com/xx/en/home/services/enterprise/starting-your-business/find-startup-adviser.html

91


About the report

— Jonathan Lavender, Global Head, KPMG Private Enterprise, KPMG

— Conor Moore, Global Co-Leader Emerging Giants, KPMG Private Enterprise,

KPMG, Partner, KPMG in the US

— Kevin Smith, Head of KPMG Private Enterprise in EMA, Global Co-Leader

Emerging Giants, KPMG Private Enterprise, KPMG, Partner, KPMG in the UK

— Anna Scally, Partner, Head of Technology and Media and Fintech Lead, KPMG

in Ireland

— Dan Wilson Partner, National Sector Lead for Technology, KPMG in Canada

— Dr. Ashkan Kalantary, Partner, Deal Advisory Venture, KPMG in Germany

Services

— Dina Pasca-Raz, Partner, Head of Technology, KPMG in Israel

— Diogo Garcia Correia, Venture Capital & Emerging Giants Business

Development, KPMG in Brazil

— Egidio Zarrella, Partner, Clients and Innovation, KPMG China

— Hiroshi Abe, Executive Board Member, Partner, KPMG AZSA LLC

— Irene Chu, Head of New Economy and Life Sciences, Hong Kong (SAR), KPMG

China

— Jesus Luna, Partner, KPMG Private Enterprise Leader, KPMG in Mexico

— Jules Walker, Senior Director, Business Development, KPMG in the US

— Jussi Paski, Head of Startup Services, KPMG in Finland

— Lauren Taylor, Fintech Business Development, KPMG in the U.K.

— Lindsay Hull, Director, Emerging Giants Global Network, KPMG Private

Enterprise, KPMG

— Melany Eli, Managing Director, Marketing and Communications, KPMG Private

Enterprise, KPMG

— Nicole Lowe, Head of KPMG Access, KPMG in the U.K.

— Nitish Poddar, Partner and National Leader, Private Equity, KPMG in India

— Paul Ford, Partner, Head of Private Equity, KPMG Japan/M&A Deal Analytics

Lead, KPMG FAS/Leader of Transaction Services, KPMG Japan

— Sunil Mistry, Partner, KPMG Private Enterprise, Technology, Media and

Telecommunications, KPMG in Canada

— Tim Dümichen, Partner, KPMG in Germany

We acknowledge the contribution of the following individuals who assisted in the development of this publication:

Acknowledgements


92


About the report

KPMG uses PitchBook as the provider of venture data for the Venture Pulse report

Please note that the MESA and Africa regions are NOT broken out in this report. Accordingly, if you add up the Americas,

Asia-Pacific and Europe regional totals, they will not match the global total, as the global total considers those other regions.

Those specific regions were not highlighted in this report due to a paucity of datasets and verifiable trends.

In addition, particularly within the European region, the Venture Pulse does not contain any transactions that are tracked as

private equity growth by PitchBook. As such rounds are often conflated with late-stage venture capital in media coverage,

there can be confusion regarding specific rounds of financing. The key difference is that PitchBook defines a PE growth round

as a financial investment occurring when a PE investor acquires a minority stake in a privately held corporation. Thus, if the

investor is classified as PE by PitchBook, and it is the sole participant in the recipient company’s financing, then such a round

will usually be classified as PE growth, and not included in the Venture Pulse datasets.

Also, if a company is tagged with any PitchBook vertical, excepting manufacturing and infrastructure, it is kept. Otherwise, the

following industries are excluded from growth equity financing calculations: buildings and property, thrifts and mortgage

finance, real estate investment trusts, and oil & gas equipment, utilities, exploration, production and refining. Lastly, the

company in question must not have had an M&A event, buyout, or IPO completed prior to the round in question.

Fundraising

PitchBook defines venture capital funds as pools of capital raised for the purpose of investing in the equity of startup

companies. In addition to funds raised by traditional venture capital firms, PitchBook also includes funds raised by any

institution with the primary intent stated above. Funds identifying as growth-stage vehicles are classified as PE funds and are

not included in this report. A fund’s location is determined by the country in which the fund is domiciled; if that information is not

explicitly known, the HQ country of the fund’s general partner is used. Only funds based in the United States that have held

their final close are included in the fundraising numbers. The entirety of a fund’s committed capital is attributed to the year of

the final close of the fund. Interim close amounts are not recorded in the year of the interim close. Mega-funds are classified as

those of $500 million or more in size for the following fund categories: venture and secondaries.

Deals

PitchBook includes minority equity investments, as well as investments combined of both equity and debt, into startup

companies from an outside source. Investment does not necessarily have to be taken from an institutional investor. This can

include investment from individual angel investors, angel groups, seed funds, venture capital firms, corporate venture firms,

and corporate investors, as well as from nontraditional investors such as hedge funds, mutual funds or private equity funds.

Investments received as part of an accelerator program are not included, however, if the accelerator continues to invest in

follow-on rounds, those further financings are included.

― Angel/seed: PitchBook defines financings as angel rounds if there are no PE or VC firms involved in the company

to date and we cannot determine if any PE or VC firms are participating. In addition, if there is a press release that

states the round is an angel round, it is classified as such. Finally, if a news story or press release only mentions

individuals making investments in a financing, it is also classified as angel. As for seed, when the investors and/or

press release state that a round is a seed financing, or it is for less than $500,000 and is the first round as reported

by a government filing, it is classified as such. If angels are the only investors, then a round is only marked as seed

if it is explicitly stated.

― Early-stage: Rounds are generally classified as Series A or B (which we typically aggregate together as early-

stage) either by the series of stock issued in the financing or, if that information is unavailable, by a series of factors

including: the age of the company, prior financing history, company status, participating investors, and more.

― Late-stage: Rounds are generally classified as Series C or D or later (which we typically aggregate together as

late-stage) either by the series of stock issued in the financing or, if that information is unavailable, by a series of

factors including: the age of the company, prior financing history, company status, participating investors, and more.

― Corporate: Corporate rounds of funding for currently venture-backed startups that meet the criteria for other

PitchBook venture financings are included in the Venture Pulse as of March 2018.

― Corporate venture capital: Financings classified as corporate venture capital include rounds that saw both firms

investing via established CVC arms or corporations making equity investments off balance sheets or whatever other

non-CVC method is employed.

Exits

PitchBook includes the first full liquidity event (i.e., M&A, buyout, IPO) for holders of equity securities of venture-backed

companies. This does not include direct secondary sales, further share sales following an IPO, or bankruptcies. M&A

value is based on reported or disclosed figures, with no estimation used to assess the value of transactions for which

the actual deal size is unknown. Unless otherwise noted, IPO sizes are based on the pre-money valuation of the

company at the time of the transaction.

In the edition of the KPMG Venture Pulse covering Q1 2019 and all ensuing, PitchBook’s methodology regarding

aggregate exit values changed. Instead of utilizing the size of an IPO as the exit value, instead the prevaluation of an

IPO, based upon ordinary shares outstanding, was utilized. This has led to a significant change in aggregate exit values

in all subsequent editions yet is more reflective of how the industry views the true size of an exit via public markets. In

the edition of the KPMG Venture Pulse covering Q1 2021 and all ensuing, the IPO exit type was updated to include all

types of public listings, including special purpose acquisition companies (SPACs) and other reverse mergers.

Methodology


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Venture Pulse Q2 2021 - assets.kpmg

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