United States

Venture Pulse Q3 2016

Oct 19, 2016
From the Global Enterprise Institute

Welcome to the 6th edition of Venture Pulse report. The series leverages Q3’16 quarterly VC data on deals and funding, from CB Insights, and includes analysis and regional perspectives from KPMG Enterprise. It also includes overviews from global and regional perspectives, including North America, EMA and ASPAC.

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Highlights from Venture Pulse Q3’16 report

Quarterly funding to VC-backed companies had hovered between $27B and $28B since the low in Q4’15, but saw a further decline to $24.1B in Q3'16. That’s the lowest quarterly funding total since Q3’14. However, there are positive signs that the market is becoming more stable, including renewed interest in IPO exits during the quarter. With the US interest rates expected to rise in Q4 and the outcome of the US presidential election to be decided shortly, the VC market may have reached a critical turning point. Given the high degree of liquidity and a growing sense of positivity taking hold among companies and investors, the VC market is poised to make a rebound – if not in Q4’16, then headed into the new year.

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Download the full report – Venture Pulse Q3’16 - Global

 

Download the full report – Venture Pulse Q3’16 - North America

 

The report also uncovered the following trends:

 

  • US funding dropped to $14B, down 18% from Q2’16. Quarterly deals stood at 1067, ticking downwards 2% from the prior quarter.
  • Globally, quarterly funding to VC-backed companies had hovered in a $27B to $28B band since crashing in Q4’15 but saw a further decline to $24.1B in Q3'16. That’s the lowest quarterly funding total since Q3’14.
  • Globally, corporates and CVCs participated in over 28% of global deals, reaching a 5-quarter high as corporations actively invest in VC-backed companies.
  • Without last quarter’s outsize rounds to unicorns like Uber and Snap, California funding was down 38% from the prior quarter. However, mega-rounds drove Massachusetts funding up 96%, with deals rising as well.

 

KPMG's Venture Capital Practice

KPMG’s Venture Capital practice offers audit, tax and advisory services tailored for venture-backed startups and the next generation of leading companies. Whether you are launching a new company, expanding abroad, complying with regulatory pressures or planning an exit – our global teams are there to help at each stage of growth. Our passion and mindset matches the companies we serve: entrepreneurial, hands-on, proactive, visionary, and dedicated.

For further analysis of global and regional venture capital activity and trends, contact our professionals in the Venture Capital practice. Visitwww.kpmg.com/us/venturecapital