North America continued to attract the major share of global venture capital (VC) funding during the third quarter (Q3) of 2019, according to GlobalData, a leading data and analytics company.
North America accounted for 48.5 per cent of the global VC investment volume and 52.4 per cent of the investment value in Q3 2019, followed by Asia-Pacific (APAC) with 29.7 per cent and 28.7 per cent of the global VC investment volume and value, respectively.
Despite none of the countries witnessing billion-dollar funding during Q3 2019 and the prevailing economic and geopolitical uncertainties in some of the countries, the global VC funding activity remained strong. The growth was primarily driven by strong VC funding in North America and Europe. On the other hand, VC funding activity in APAC remained weak.
North America witnessed 61.4 per cent growth in VC investment volume and 21.3 per cent growth in value in Q3 2019 compared to Q3 2018, primarily driven by increase in VC funding activity in the US.
The US witnessed announcement of several USD100m-plus deals during Q3 2019. Some of the notable deals include USD785m raised by JUUL Labs, USD400m raised by Knotel and USD370 million raised by Urban Compass.
Europe registered 80.9 per cent growth in VC investment value in Q3 2019 as compared to Q3 2018, which was the highest among all the regions. It also reported the second highest growth in the number of VC investments.
Aurojyoti Bose, Lead Analyst at GlobalData, says: “Europe’s strong VC funding activity amidst uncertainty around Brexit is noteworthy and can be attributed to several countries other than the UK also gaining significant investors’ attention.”
Some of the notable VC deals announced in Europe during Q3 2019 include USD560.9 million raised by German firm FlixMobility; USD550 million raised by the UK-based Babylon Health; and USD130.7 million raised by the Netherlands-based AM-Pharma.
VC funding activity remained relatively weak in APAC as compared to other regions during Q3 2019. Despite registering an increase in the number of VC investments, the region witnessed decline in VC investment value. APAC’s VC investment volume growth was also the lowest among all the regions.
While most of the key economies in the APAC witnessed increase in the number of VC investments in Q3 2019, decline in VC investment value (by approximately USD5 billion) in China dented the overall VC investment value for the region during the quarter.
Bose concludes: “Economic slowdown and ongoing trade war with the US caused VC investors to be cautious while committing large investments in China.
“As economic and geopolitical uncertainty, trade war among different countries and uncertainty around Brexit are unlikely to abate soon, VC investors will continue to remain cautious while making investments over the next few quarters.”