Venture Capital Funding Stays Strong in Q3 2019: KPMG

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There’s confirmation that venture capital funding of startups continues unabated this year despite an uncertain worldwide economic future.

According to VenturePulse, a quarterly report on worldwide VC trends published by KPMG Enterprise, $28.2 billion across 2,265 deals was recorded during the third quarter of 2019. This despite uncertainty in the global economy due to ongoing trade wars and political upheaval.

Juul Labs, an e-cigarette manufacturer, was the quarter’s top VC deal in the U.S. and around the world at $785 million raised, despite growing questions about the health effects of vaping. Domestically, there were numerous deals between $100 and $500 million across a variety of sectors, including fin-tech, mobility, automotive, healthcare and insurance. There were no billion dollar deals in the U.S. during this past quarter.

Fintech was the hottest investment target for VC’s with Root Insurance ($350 million), Robinhood ($323 million) and Clearbanc ($300 million) leading the charge. Cybersecurity was the next biggest VC funding target.

First-time funding, including seed funding, saw $7.7 billion invested so far this year, the total sum of VC invested in first-time financing for the U.S. is likely to result in one of the most robust years on record, despite a decrease in number of deals.

Despite the strong outlook of the VC funding market, investors are keeping an eye on the IPO market, where this year’s filings have produced a mixed bag of results.

“Because tech has had such a bullish run, investors expect every company to come out of the gate and go gangbusters,” said David Pessah, senior director, KPMG Innovation Labs, in a statement. “The historical trend shows that while it might take a bit of time to get going, the best companies just get into the market and grow from there.”

Unicorns continue to fly in Q3. 19 startups have reached valuations of a billion or more in this quarter, down slightly from 20 in the previous quarter. Artificial Intelligence focused startups like Scale AI, Argo AI, Icertis, and DataRobot, represented more than a quarter of the new unicorns that specialize in AI services.