KPMG’s Q3 2020 Venture Pulse Report

Venture capital investment in the U.S. remains strong with companies raising $37.8 billion across nearly 2,300 deals in Q3 2020

Biotech, Life Sciences, Fintech and Edtech drive VC investments in the U.S

VC investment in the U.S. remained strong in the third quarter of this year, with $37.8 billion invested across 2,285 deals. This activity was led by a $1.9 billion raise by SpaceX, according to Venture Pulse – a quarterly report published by KPMG Private Enterprise on global VC trends.

The acceleration of digital trends as a result of the ongoing pandemic helped spur VC investment, particularly in key areas such as health care, business services, and edtech. Renewed IPO activity, including Snowflake’s $3.4 billion IPO, provided evidence of the resilience of the U.S. VC market.

Healthcare remains hot for VC investors in the U.S.

Healthcare and biotech represented a strong area of interest for VC investors in the U.S. in the third quarter. Interest extended well beyond pandemic response-related solutions, with primary care solution provider VillageMD raising $275 million, and cancer screening company Freenome raising $270 million.

As potential vaccines for COVID-19 move closer to approval, there has also been increasing recognition of the significant challenges associated with efficient vaccine production and distribution. This is driving increasing interest in logistics solutions that can support rapid and efficient vaccine distribution.

“2020 has been a banner year for VC investment in life sciences and biotech, both globally and in the U.S. across the industry – not just for companies focusing on COVID 19,” says Janet Lehman, national leader VC Life Sciences. “And there is no sign that it will let up heading into Q4.”

 

Digital business models attracted significant VC investment

During Q3, digital business models were a top focus of investors, with both VC investors and corporates prioritizing solutions aligned with doing business successfully in the current environment – such as enhancing digital service channels for consumers and productivity within a remote workforce.  

Fintech was a primary focus of U.S. VC investors, with wealthtech Robinhood raising more than $1.2 billion over two deals; alternative payments model company Affirm raising $500 million; and digital bank Chime raising $435 million. During the quarter, data analytics firm Palantir Technologies also raised $549 million (followed by their IPO), while digital C2C marketplace OfferUp raised $453 million.

IPO market improves in Q3 as unicorns look to exit

IPO activity increased significantly in the U.S. in Q3 as companies looked to take advantage of the strong public markets, combined with a window of opportunity to exit in advance of the U.S. presidential election. The largest IPO of the quarter came from cloud software company Snowflake, which raised $3.4 billion and saw its share price more than double on its first day of trading.

If you would like to set up an interview with Conor Moore, U.S. Private Enterprise national leader or Janet Lehman  to discuss the report in more detail, please contact Pete Settles.

Media contact

Pete Settles

Pete Settles

Director, Corp. Comm., Financial Services, KPMG US

+1 201-505-6065

 

 

Conor Moore

Conor Moore

Partner, National Leader, KPMG Private Enterprise, KPMG US

+1 415-335-8401
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