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Laxman Pai, Opalesque Asia: Venture capital assets under management triples in five years to $1.68tn
Venture capital assets under management (AUM) tripled between December 2016 and March 2021 from $547bn to $1.68tn, along with a marked increase in dry powder from $146bn to $355bn, said a study.
According to the 'Alternatives in 2022 Report' by Preqin, the ratio of dry powder to AUM has actually declined, from 27% in 2016 to 21%, indicating that funds aren't struggling to deploy capital, despite concerns about valuations.
The industry has also diversified, with niche strategies such as crossover funds taking hold. In the first three quarters of 2021, crossover funds were invested in 854 venture deals, amounting to $126bn. This is up 48% year on year in number and 136% in value, said the study.
Indeed, deal activity has been robust. The aggregate value of deals completed in 2021 reached a record $476bn in the first three quarters of 2021, exceeding 2020's $314bn. This is despite the number of deals falling to 15,101 from 18,656 in 2020, indicating that funding rounds have grown larger, driven by soaring valuations and a shift to later-stage investments.
According to the report, start-ups that leverage tech to create solutions in traditional sectors continue to raise more funding, spurring innovation in verticals such as healthtech, fintech, proptech, cleantech, and edtech.
With technology increasingly integrated into our everyday lives, the cybe...................... To view our full article Click here
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