Venture capital funding in start-ups fell 2% globally in April-June from previous quarter, with Asia lagging even as the US continued to see large-scale deal making, according to a report from market intelligence platform CB Insights along with consultancy firm PwC.
Investments in start-ups in the US, Europe, and Asia for April-June totalled $53 billion, about 2% lower than the previous quarter, while the number of deals increased 2% to 3474 for the quarter, says the report titled MoneyTree Report: Q2 2019.
While Asia came close to surpassing North America’s deal activity in Q3 2018, the region’s deal activity has since declined 24% in the current quarter.
Funding in the US was driven by deals of over $100 million mega-rounds driving funding higher. Driving the trend toward bigger deals, US companies raised a record quarterly number of large rounds, with 64 mega-rounds accounting for nearly half of all funding raised, compared with 48 and 51 rounds of previous quarters.
The slowdown in Asia seems to be largely because of weakening growth in China, where funding has eased after a record breaking decade of fundraise, investments, and valuations. However, funding in India continues to remain strong.
Mint reported on June 30 that start-ups in India have raised a record $3.9 billion from venture capitalists in the six months ended 30 June, as the world’s biggest investors doubled down on their bets in the country buoyed by the Flipkart-Walmart deal last year.
Sector-wise, internet companies raised the maximum capital, $12 billion in the quarter, followed by healthcare and mobile and telecom firms, which raised $4.6 billion and $3.1 billion, respectively.
Following the stock market listing of ride-hailing firm Uber Inc., e-cigarette company Juul Labs become the most funded start-up, with $12.6 billion in funding over the years, from investors including Altria Group, the makers of Marlboro cigarettes.
In April-June, exits via mergers and acquisitions (M&A), remained flat at $162 billion, but exits via initial public offerings shot up to $33 billion compared with $15 billion and $16 billion for the preceding two quarters. This was driven by a slew of public market listings in the US- from Uber and social network Pinterest to workplace collaboration platform Slack and Zoom Video Communications.
Source: Mint