2021 global venture capital investment on pace for record high

Dec 25, 2021 – 14:50 KYODO NEWS

TOKYO – Global venture capital investment is on course to double this year from 2020 to a record high of more than $580 billion, driven by investor interest in online services in the health care, financial and retail sectors spurred by monetary easing in major economies, according to data from a U.S. research firm.

Venture companies raised a total of $437.7 billion worldwide in the first nine months of 2021, marking five straight quarters of growth, data from CB Insights show.

The same pace of investment in startups into the fourth quarter would bring the annual figure to $583.6 billion, far exceeding $284.2 billion last year. Investors are paying close attention to digitalization and seeking to capitalize on monetary easing amid the coronavirus pandemic.

During the first three quarters, the health care, financial technology and retail sectors raised $97.1 billion, $94.7 billion and $82.5 billion, respectively, according to the data released in October by CB Insights.

By country, fund-raising by venture companies in the United States stood at $210.4 billion, accounting for nearly half of the global total during the nine-month period, with large investment deals involving data management firm Databricks Inc., grocery delivery company Gopuff and financial-technology company Chime Financial Inc.

In Asia, $125.5 billion was raised during the same period, with $25.5 billion by Chinese startups and $9.9 billion invested in India.

In Japan, venture companies raised 580 billion yen ($5.1 billion), up around 60 percent from a year earlier and surpassing the previous annual record high logged in 2019, according to a Japanese research company.

Among them, biotech venture Spiber Inc., based in Tsuruoka in the northeastern Japan prefecture of Yamagata, raised 34.4 billion yen from U.S. investment fund Carlyle Group and other investors, according to a Carlyle press release in September.

The Chinese government has been tightening its control of domestic IT giants such as Alibaba Group Holding Ltd. to rein in their economic clout, and some global investment previously bound for China could be diverted to Japan, according to the Japan Venture Capital Association.