Home Strategy Start-up sector on an investment high: report
Start-up sector on an investment high: report Image courtesy of Stuart Miles at FreeDigitalPhotos.net Featured

Investment in Australian start-ups continues to hit new highs, according to a new report which reveals that the start-up sector has again experienced a quarter of growth in venture capital.

According to management firm KPMG’s Venture Pulse Q3 2018. Q3 2018 venture capital totalled US$317 million across 27 deals, exceeding every other quarter in the dataset excepting Q2 2014.

KPMG lists key Australian deals as Judo Capital, Airwallex, Culture Amp, Flare, Gilmour Space Technologies, Simple, AgriWebb and GO1, and says that software dominated investor interest, with five out of the top eight deals being business productivity, financial or educational software.

"Most importantly, that rate of growth, despite sliding volume in terms of total deals closed, indicates the ongoing health of the Australian venture ecosystem," Amanda Price, KPMG Australia’s head of High Growth Ventures, said.

Price says that after a record-shattering Q2 2018, led by the US$14 billion raised by Ant Financial, VC investment in Asia, dropped back to a more natural investment level during Q3.

But, despite the slowdown, the KPMG report shows that Asia dominated the top global deals in the quarter, with eight of the top 10 deals, including three US$1 billion+ megadeals: Grab (US$2 billion), Bitmain (US$1 billion), and Oyo Rooms (US$1 billion).

The 10 largest deals in Asia totalled US$8.2 billion, and KPMG noted that the strong quarter led to Asia reaching an annual high of VC investment with a quarter still remaining.

"Such a rate only could have occurred if the venture landscape was transformed far beyond what traditional notions of VC entailed, and driven in large part by China’s entrance of non-traditional players such as state-affiliated investment corporations and corporate venture arms, that transformation has definitely concluded in the region and roared full steam ahead ever since," Price said.

Globally, KPMG reports that venture capital investment remained strong in Q3 with US$52 billion invested across 3045 deals. Overall, US$183.3 billion invested globally by the end of Q3 has already surpassed the 2017 total of US$171 billion.

“Globally, the amount of venture capital invested has already surpassed 2017’s annual total – driven in large part by ever-increasing deal sizes,” said Arik Speier, head of Technology, KPMG Somekh Chaikin in Israel.

“However, this quarter we continued to see a decline in the volume of seed and angel investments, particularly in Europe and Asia."

The KPMG report also reveals:

Trends to watch for in Asia

Heading into Q4, AI is likely to remain a very strong area of VC investment in Asia given its widespread applicability across sectors. Many investors are particularly interested in AI for financial services, such as solutions aimed at helping identify and avoid fraud and money laundering. Autonomous driving will likely also remain a big priority in Asia moving forward. In Hong Kong, the IPO market is expected to remain strong, as evidenced by Bitmain’s recent filing. There will also likely be an increase in Chinese companies looking at IPO exits on foreign exchanges.

Will China rival Silicon Valley?

China’s current statistics place it as the most prolific and lucrative venture ecosystem by far in the APAC region. While Singapore accounted for the largest deal in Asia this quarter with a US$2 billion raise by Grab14, China continued to be a key driver for VC investment and market activity in the region. But it’s not yet possible to conclude whether China’s significant fostering of innovation and flood of funds is truly laying the groundwork for an epicentre of regional or even global venture.

"As far as can be seen, there is no appreciable reason for mega-deals largely driven by Chinese investment firms to cease within that nation, nor for multinational investment firms to cease investing in start-ups from India to Australia," Price said.

47 REASONS TO ATTEND YOW! 2018

With 4 keynotes + 33 talks + 10 in-depth workshops from world-class speakers, YOW! is your chance to learn more about the latest software trends, practices and technologies and interact with many of the people who created them.

Speakers this year include Anita Sengupta (Rocket Scientist and Sr. VP Engineering at Hyperloop One), Brendan Gregg (Sr. Performance Architect Netflix), Jessica Kerr (Developer, Speaker, Writer and Lead Engineer at Atomist) and Kent Beck (Author Extreme Programming, Test Driven Development).

YOW! 2018 is a great place to network with the best and brightest software developers in Australia. You’ll be amazed by the great ideas (and perhaps great talent) you’ll take back to the office!

Register now for YOW! Conference

· Sydney 29-30 November
· Brisbane 3-4 December
· Melbourne 6-7 December

Register now for YOW! Workshops

· Sydney 27-28 November
· Melbourne 4-5 December

REGISTER NOW!

LEARN HOW TO REDUCE YOUR RISK OF A CYBER ATTACK

Australia is a cyber espionage hot spot.

As we automate, script and move to the cloud, more and more businesses are reliant on infrastructure that has the high potential to be exposed to risk.

It only takes one awry email to expose an accounts’ payable process, and for cyber attackers to cost a business thousands of dollars.

In the free white paper ‘6 Steps to Improve your Business Cyber Security’ you’ll learn some simple steps you should be taking to prevent devastating and malicious cyber attacks from destroying your business.

Cyber security can no longer be ignored, in this white paper you’ll learn:

· How does business security get breached?
· What can it cost to get it wrong?
· 6 actionable tips

DOWNLOAD NOW!

Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

 

Popular News

 

Telecommunications

 

Sponsored News

 

 

 

 

Connect