We're running out of superlative adjectives to describe what is happening in financial markets these days. The latest stat that's breaking our minds is that global venture capital funding hit $156bn in Q2 2021 (three months of April, May and June). That number breaks the record from the first quarter of this year when $136bn found its way into the coffers of promising startups looking to one day become the next letter in the FAATMAN acronym (thanks to CB Insights for the great data from their latest report).
Where did you come from?
Venture capital investors are able to add the odd zero to the end of their checks these days because investors are entrusting them with more and more money. Many asset classes, particularly stock markets and residential real estate, are at-or-near record high valuations. That means more capital is available to find a home in VC funds.
Where did you go?
Geographically speaking, almost half of that money has been invested in the US, with Asia picking up another 29%, and Europe 17%. In terms of industries, things are a little more fragmented. Around 20% of all VC dollars invested in Q2 2021 went into fintech companies, which is a pretty broad category that could include investing platforms, digital banks or innovative loan companies. E-commerce companies scooped $16bn, or about 10% of the total, as did startups working in the field of artificial intelligence.
