U.S. Venture Capital investment continued its strong growth into the second quarter of 2018, as U.S. VC investment surpassed $27 billion– for the second consecutive quarter, according to just released KPMG Report. Unicorns were key beneficiaries, fueling late-stage investment growth both in the U.S. and globally. A resurgence of the IPO market also added to the robust quarter.
“Already in the first half of the year we’ve seen a significant increase in the number of companies going public – with the likes of Docusign and Zuora in the U.S.,” said Brian Hughes, U.S. National Co-Lead Partner, Venture Capital Practice, KPMG LLP in a press statement. “Post-IPO performance has been particularly strong and we anticipate this will likely spur additional activity in the coming quarters.”
Deal volume rose to 1,859 versus 1693 in Q1 ’18, with the 9 US deals reaching $250 million or higher. Two transactions bolstered this quarter’s numbers, a $2 billion raise by electric-car manufacturer Faraday Future and another fundraise by Lyft.
Now with the IPO market gaining steam, verticals such as artificial intelligence, healthtech, autotech, and life sciences are receiving investor attention.
“It is significant to note that life sciences in general accounts for more than 14 percent of the U.S. VC volume, which is the highest proportion in years,” said Conor Moore, U.S. National Co-Lead Partner, Venture Capital Practice, KPMG LLP. “This is a testament to how interested VCs continue to be in healthcare innovation as the industry grows to an even larger share of the nation’s economy.”
Top verticals are:
Autotech: Traditional automotive manufactures continue to invest in autonomous driving technologies despite significant challenges still in place. They are focusing on teams and talent to overcome commercialization hurdles.
Cybersecurity: Tanium raise of $175 million reflects investor interest in this sector continues. Iot in cars and homes and related concerns for hacking, keeping investors looking for technologies that can respond quickly to breaches.
Convenience services: Ongoing interest in consumer convenience ventures reflected in $155 million funding of dog-walking company Rover and the targeting of specialized niches.
