VC surges globally and venture moves to later stage

Global venture investment surged in the first half of the year to $59.8 billion or 49.2 percent more than the same period last year, while venture capitalists in Europe shifted their investment strategy to focus on later stage investment to manage risk, according to a new report from KPMG and CB Insights.

In the first quarterly Venture Pulse Q2 2015 report by KPMG and VC data company CB Insights, the data by the organisations showed that on a regional basis, North America commanded the lion's share of minority equity investment with $37.5 billion invested in the first half of 2015, putting it on a par to surpass the 2014 period by more than 25 percent.

Asia followed next with $15 billion of growth stage investment for the first two quarters of 2015, surpassing last year's first two quarters by 45 percent. Average late-stage equity investment totalled more than $100 million in the region.

Anand Sanwal, CEO of CB Insights said in a statement: “VC-backed companies are staying private longer, and the best companies have a menagerie of funding options. This helped buoy Q2 2015 funding to levels last seen during the dot com era. Notably, the strength was global from Berlin to Bangalore and the Bay Area to Beijing.”

By comparison, Europe saw $6.6 billion deployed in venture funding for the first half of the year, characterised by later stage venture increasing to an overall average of $51.9 million for the second quarter. Within Europe, the UK accounted for one-third of all funding, according to the report, with technology making up the largest share of investments in Europe.

The data indicates that minority investments are trending larger due to being later stage, coupled with $100 million invested in multiple round financings becoming more common. For example, in the first two quarters of the year there were more than 100 such “mega-rounds”, with 61 in the second quarter alone, that collectively accounted for more than $16 billion in investment.