The capital committed by VCs in Q4, however, went up by 39.6 per cent to US$205 million quarter-on-quarter, and up 57.2 per cent year-over-year

Singapore saw US$1.2 billion-worth of VC investments across 112 deals in 2017, with Q2 being the strongest performer with US$724.3 million across 33 deals, a study finds.

The year also saw eight exits, with the exit value of investments reaching US$1.6 billion. During the period, seven funds raised a total of US$732.9 million in Singapore, according to the Q4 2017 edition of Venture Pulse, a quarterly report on global VC trends published by KPMG Enterprise.

As per this research, the tech sector still produces quite a few peaks in VC investments. Barring Q4 2017’s lower volume, Singapore by and large maintained historically healthy tallies.

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In Q4 last year, exits in the city-state reached US$984.4 million, the highest valuation seen since Q2 2016 (US$1 billion).

“Global venture capital investment surged, powered by mega funding rounds in Asia and new quarterly investment highs in the US and Europe,” said Chia Teck Yew, Head of Financial Services Advisory, KPMG in Singapore. “Globally, investors continued to plough money into late-stage rounds as part of a broader trend for the year that saw 70 per cent of VC investment concentrated in rounds of US$25 million or more.”

For Singapore, Yew said, although the deal volumes in Q4 2017 declined by 41.4 per cent from the previous quarter, the capital committed by VCs in the quarter swung up by 39.6 per cent quarter-on-quarter to US$205 million, and up 57.2 per cent year-over-year.

“Overall, VC investment for 2017 hit US$1.2 billion, with exits reaching US$1.6 billion, reflecting strong investment appetite and good return-on-investments that continue to fuel the growth of the Singapore ecosystem,” Yew said.

As for Asia, the VC investments reached an annual high of more than US$48 billion in 2017, propelled by three US$1 billion-plus deals in China during Q4 2017. This massive deals include the US$1 billion fundraise by electric car company Nio, in addition to the US$4 billion raised by Didi Chuxing and Meituan-Dianping.

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In Q4 2017, there was a strong increase in VC investments over the previous quarter, with US$15.6 billion invested. Corporate Venture Capital (CVC) participation in Asia reached a whopping 32.2 per cent in the same quarter – a new high by a significant margin. CVC-affiliated investment was the third-highest quarter on record at US$12.5 billion.

China dominated the Asian VC market during the quarter, accounting for US$13.9 billion in investment during Q4 2017. India saw a quarter-over-quarter drop to US$523 million. However, 2017 as a whole was reasonably robust in the country with seven US$100 million mega-deals over the course of the year.

In terms of global VC investments, the median deal size rose for every deal stage in 2017, with the median deal size of angel and seed deals rising to US$1 million from US$800,000, early-stage deals rising to US$5 million from US$3.7 million, and later-stage deals rising to US$10.8 million from US$9.5 million.

VC investment in Artificial Intelligence (AI) and Machine Learning doubled from US$6 billion in 2016 to US$12 billion in 2017.

As per this study, in 2018 the global VC market will continue to be strong in terms of investment, although the declining number of deals could create some challenges down the road. VC fundraising could see an uptick in 2018 as VC firms globally look to create larger global funds than they have in the past, in order to compete with the US$100 billion SoftBank Vision Fund.

Areas like healthtech, biotech and autotech are expected to continue to grow at a rapid pace, while AI across industries will likely help drive significant investment rounds. Newer areas like foodtech and agtech are also expected to gain traction heading into 2018.

“Globally and in Singapore, we can expect to see cross-industry solutions being a key focus of VC investors heading into the next few quarters,” said Chia. “The applicability of innovative technologies, whether AI and machine learning or blockchain, to different sectors will likely keep investors focused and investment high regardless of any pauses among specific industries. The tech sector will also continue to take a lion’s share of overall investments.”

“Additionally, more private and seed/Series A corporate VC funds are on the rise in Singapore and many are now ready to make their bets. Along with VCs that are regrouping to focus on Series B to D deals, we can expect deal activity in Singapore to remain robust in 2018. Late-stage transactions will also continue, with investors placing larger but safer bets on companies with proven business models and the strongest path to profitability. Looking ahead, Singapore companies are also likely to be more aggressive in seeking earlier and larger rounds of funding from the local, US, China and overseas markets. All these developments will continue to drive global and local VC investment and momentum to the next level.”

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