Venture capital (VC) investment worldwide rose to near-record levels in the first quarter (Q1), according to a report published on Wednesday form KPMG Enterprise.
The report, Venture Plus Q1 2018, says that VC investment rose to US$49.3 billion in the first quarter, up from US$46 billion in Q4 2017.
In terms of deal value, this represents the second-highest quarterly total. Q1 2018 did set a record in the Americas region, which posted US$29.4 billion of investment.
Within the Americas, Canada matched its second-best quarter of VC investment, with US$800 million raised across 72 deals.
By sector, the ride-hailing industry “attracted massive VC investment” in the quarter, accounting for four of five largest deals in the quarter, the report says. In the U.S., the biotech sector was particularly strong.
Globally, the number of deals in Q1 2018 declined to 2,661 from 3,286 in Q4 2017. VC deal volume has dropped in half from a peak of 5,480 deals in Q1 2015, the report says.
With the rise in deal value and the drop in deal volume, the median global deal size continued to grow. Median deal size grew across all deal stages in Q1 2018, reaching $1.3 million for angel and seed stage rounds, $7.7 million for early stage rounds, and $15 million for later stage rounds.
“Venture capital investors continue to pour money into late-stage companies, in part because of the number of aging unicorns that have remained private,” says Brian Hughes, national co-lead partner, KPMG Venture Capital Practice, and a partner for KPMG in the U.S, in a statement.
Looking ahead, the report indicates that VC activity is expected to remain strong in Q2 2018, “with an increasing focus on artificial intelligence, autotech, and healthtech.”
The combination of an increase in the number of initial public offering (IPO) filings and strong IPO exits, could lead to “the tide turning over the next few quarters, bringing with it a resurgence in early stage deals activity,” Hughes says.