• 14 VC deals closed in Ireland in Q2 2019, worth $120.9 million
• Investment in Europe reaches record high of $8.7 billion in Q2 2019
• The Q2 2019 edition of the Venture Pulse report produced by KPMG analyses the latest global trends in venture capital investment data and provides insights from both a global and regional perspective. All figures cited are in USD; data for the report is provided by PitchBook

KPMG has published its Venture Pulse Q2 2019 report, tracking venture capital (VC) activity around the globe. Findings show that overall venture capital investment globally held steady in the second quarter of 2019, reaching $52.7 billion (All figures in USD). US and European investment remained relatively robust, however, investment in Asia was weak for the second consecutive quarter, reaching only $10.1 billion as Chinese mega deals continued a pause in activity. In Ireland, $120.9 million was raised over 14 deals, with the largest deals in the IT and healthcare sectors.

In Ireland, personal health testing company LetsGetChecked raised $30 million to scale the manufacture and sale of its diagnostic products in the US and internationally. Irish life science technology business Avectas raised $10 million, in a round led by leading pharma investor Seamus Mulligan. IT companies Immedis, whose logo will have been spotted on recent British Open winner, Shane Lowry, raised $29.1m. UBiqube Solutions, the global software supplier and Glofox, which provides boutique fitness and gym management software raised $23.3 million and $10 million respectively.

Speaking about the deals that closed in Ireland in Q2 2019, Anna Scally, Partner and Fintech Lead at KPMG in Ireland commented that “It’s not surprising that the largest deals closing in Ireland over the last quarter were in the healthcare and IT sectors. We are global leaders in these areas and it is great to see quality Irish companies attracting investment from both domestic and international investors”.

Discussing Ireland’s attractiveness as a place to do business, Anna said: “Ireland continues to be a great location for Irish companies to build global businesses. It also continues to be the location of choice for foreign companies looking to expand into Europe and for those companies concerned about the impact of Brexit on their business. We’ve seen a lot of activity this year, from TD Securities and Reddit opening new offices, to mobile and cloud software company Deem announcing plans to open their European Innovation Centre in Dublin.” 

• Global VC investment dropped from $56.2 billion in Q1 2019 to $52.7 billion in Q2 2019. The largest deals for the quarter included a $1.1 billion investment in India-based OYO Rooms and a $1 billion investment in Columbia-based Rappi.
• Valuations continued to rise across all stages of investment in the first half of 2019 with global median pre-money valuations for series D+ increasing from $350 million in 2018 to $477.5 million in 2019 (YTD).
• The top four financings for the quarter came from four different countries and included a $1.1 billion investment in OYO Rooms (India), $1 billion to Rappi (Colombia), $1 billion to JD Health (China), and a $1 billion investment in Flexport (US). 
• In spite of a softening pace of venture deals, VC continued to pour into Europe – reaching $8.7 billion in Q2, surpassing the previous record of $8.5 billion set in the first quarter of 2019. There were 10 deals over or at $170 million in value, led by top deals Deliveroo ($575 million), AUTO1 Group ($535.9 million) and GetYourGuide ($484 million).
• Investment remained strong in the US, reaching $31.5 billion on 2,379 deals. US exits spiked as a result of mammoth IPO debuts by the likes of Uber, Lyft, Zoom, Beyond Meat and more.
• VC investment in Asia remained subdued for the second consecutive quarter with only $10.1 billion invested across 484 deals as corporate investors took a pause and megadeal activity ($100 million plus) remained stagnant.

In Europe, VC investment reached record levels this quarter, demonstrating continued resilience in the face of ongoing geopolitical uncertainty and associated challenges with Brexit. Overall amount of venture capital investment reached $8.74 billion during Q2 2019. However, deal volume continued to fall – from 958 in Q1 to only 825 this quarter.

The strength of Europe’s VC market continued to be defined by the growing diversity of its innovation hubs. While VC investment in the UK was well-off of historical highs, increasing investment in the Nordic countries, France, Spain, Poland and others combined with steady investment in more established innovation centres in Germany and Israel helped keep VC investment in the region high during Q2 2019.

VC investment in the US remained robust during Q2 2019, reaching $31.5 billion, compared to $34.4 billion in Q1 2019, the result of a strong economy, solid performance of the public markets, and expectations of lower interest rates.

During the quarter, investors diversified their investments across a broad range of industries including logistics, food delivery, aerospace, consumer durables and technology. Meat alternatives, artificial intelligence and autonomous vehicles also gained interest from investors.

The largest deals for the quarter included Flexport ($1 billion) and DoorDash ($600 million) from San Francisco, followed by New York-based automation firm UiPath that raised $568 million.

Heading into Q3 2019, the trend towards a smaller number of late stage deals is expected to continue globally, which could affect the ability of some high-quality early stage companies to attract funding.

AI is likely to buck this trend given its almost unlimited potential to cause industry disruption – and the significant amount of attention it is being given by corporate investors. As well, the outlook for IPOs in the US remains quite positive.

In Ireland, it is hoped that further IPO activity will be seen in the second half of 2019, with Uniphar kick-starting Q3 with the first IPO of 2019 on the Euronext Dublin exchange recently.