2015 was a record-setting year for venture capital, with over $128 billion of total investment made worldwide, topping 2014’s total by 44 percent. What sets 2015 apart, however, lies in the size and scope of the venture capital (VC) investments that were made.
From healthcare to FinTech, and retail to education, companies sparked changes that could affect every sector and every business moving forward. Investors saw this potential and made significant investments; in fact, 71 VC-backed companies achieved Unicorn status ($1 billion valuation) during the year, compared to 53 in 2014.
The World Economic Forum calls this dawning era of transformation and innovation the Fourth Industrial Revolution. At the end of this month, business and government leaders will come together in Davos, Switzerland, to discuss how to navigate these unprecedented changes. But the reality is that regular system-wide innovations are expected to continue to rock the foundations of traditional industries well into the future – and investors must enter uncharted territories if they are to achieve success.
However, after 2 incredibly strong quarters, investors are becoming more cautious with their funding. We’ve seen VC investment drop from $38.7 billion in Q3 to $27.2 billion in Q4, while the number of deals hit a low not seen since Q1’13. The drop-off was most noticeable in Asia, where China and India received significantly less funding than in all previous quarters of 2015. Comparatively, Europe experienced the least decrease in VC activity, although both the number of deals and the total deal value in Europe remain small compared to other regions of the world.
Source : KPMG