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Venture landscape

Last year was a record year in terms of global venture capital investment activity. And according to a report on global VC trends by EY, 2015 is likely to see that boom continue.

Last year, $86.7bn (£58.2bn) was invested in 6,507 VC deals worldwide, EY’s 2014 Venture Capital Review found, the highest annual investment level since 2000. The report said the global VC-backed deal activity is likely to continue its bullish trend, driven by a consistent pipeline of new IPO listings, along with improved investor confidence.

The lead author of EY’s report, Bryan Pearce, said: “We’ve been able to follow investment cycles through good times and bad, and it certainly seems we’re back to good times.”

Pearce identifies a number of reasons for the upturn in investment, but he highlights public markets as the biggest factor: “Public valuation is strong and mid-to-late stage public valuations are a driver that encourages M&A activity by corporates because they feel empowered to acquire companies to accelerate their own growth.”

Emerging trends

According to the report, given the positive trends and macroeconomic factors, investors will remain keen to invest early-stage capital in emerging markets in pursuit of higher returns. Activity in China is expected to remain strong, and interest in India will increase, in part because of political factors, namely a more pro-business government. Lower oil prices will further boost economic activity, helping to sustain a positive operating environment for VC.

In 2014, VC funding was found to be at an all-time high for the three key VC markets – the US, Europe and China. During the year, investments increased by 47% in the US and 27% in Europe, while almost tripling for China compared with 2013. Strong activity in the IT and consumer services sectors were said to have contributed to the increase in China.

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