VC investment in the US was robust in Q2’19, a reflection of the strong economy in the country, the performance of the public markets, and the projection for lower interest rates. While there are a number of issues creating noise in the US market, such as the ongoing trade dispute with China, the US economy has remained quite buoyant. With a significant amount of private capital still available in the market, VC investment is expected to continue at a solid pace into the next quarter.
VC investment in the US continued to diversify in Q2’19. Logistics, food delivery, aerospace, and consumer durables: the myriad of sectors and verticals represented in the US top deals list this quarter showcases how VC investments are becoming the norm across industries and verticals. Unlike in previous quarters, there was no truly dominant sector of investment in Q2’19, although at a technology level, artificial intelligence continued to be a very hot area for VC investment.
The outlook for both VC investment and IPO activity heading into Q3’19 is very positive for the US as long as there are no significant market corrections. Investment is expected to continue to diversify across sectors, although fintech, healthtech, and food delivery will likely continue to see strong investments. At a technology level, AI is expected to remain the hottest area for VC investors. There is also increasing willingness on the part of traditional funding organizations to do business with cannabis firms, which could spark more VC investment in the space.