Competition in the ride-hailing space reaches fever pitch; Singapore rakes in record amount in Q1 with Grab’s US$2.5 billion Series G topping the global charts
2018 had a rousing start with US$49.3 billion of venture capital investment raised across 2,661 deals in Q1, just shy of the global record for a single quarter, according to Venture Pulse Q1 2018, a quarterly report on global VC trends published by KPMG Enterprise. A record-breaking US$29.4 billion of investment in the Americas – including US$28.2 billion in the US alone – combined with high investment in Asia helped fuel the strong VC market.
While venture capital deal volume continued to decline, the median deal size globally continued to grow across all deal stages in Q1 reaching US$1.3 million for angel and seed stage rounds, US$7.7 million for early stage rounds, and US$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,” said Brian Hughes, National Co-Lead Partner, KPMG Venture Capital Practice, and a partner for KPMG in the US. “With strong IPO exits by Dropbox and Zscaler this quarter, and an increase in the number of IPO filings, we could see the tide turning over the next few quarters, bringing with it a resurgence in early stage deals activity.”
The ride-hailing industry attracted massive VC investment this quarter, accounting for four of the quarter’s five largest deals, including: US$2.5 billion raised by Singapore-based Grab, US$1.7 billion raised by US-based Lyft, US$1.5 billion raised by Indonesia-based GO-JEK, and US$1.25 billion raised by US-based Uber. Electric car manufacturer Faraday Future rounded out the top five, raising US$1.5 billion.
After rounding off 2017 at a remarkable high bolstered by megadeals, Asia continued to see large deals in Q1’18. These include two US$1 billion+ megadeals which were struck outside China, with Singapore-based Grab’s Series G financing and GO-JEK in Indonesia’s Series E round.
“Singapore saw a record US$2.68 billion of VC investment in Q1 2018, despite a relatively muted level of activity. It is testament to the maturing of Singapore’s ecosystem that a business such as Grab could be built here to tackle the regional market. In addition, the top deals in Singapore also span across diverse sectors, from logistics, internet retail to biotechnology,” said Chia Tek Yew, Head of Financial Services Advisory, KPMG in Singapore.
Global Q1’18 key highlights
VC activity globally is expected to remain strong heading into Q2’18, with an increasing focus on artificial intelligence (AI), autotech, and healthtech. With exit and IPO activity also expected to increase over the next few quarters, there will likely also be a renewal of activity at the earliest deal stages.
In Asia, AI is expected to be one of the biggest bets for the foreseeable future, with activity occurring in a number of jurisdictions including China, Singapore, and Indonesia. Healthtech and edtech are also expected to gain more attention from investors over the next few quarters. In China, a number of new technology sectors are also expected to see continued consolidation over the next few quarters – particularly bike sharing.