Sovereign wealth and public pension funds are piling into venture capital mega-deals beyond Silicon Valley even as frothy valuations raise fears of overheating among a surging number of unicorns.
The promise of returns at multiples of equity markets’ has made venture capital increasingly inviting for state-owned investors, while their deep pockets make them enticing backers for cash-hungry start-ups.
In the first nine months of this year, state-owned investors made $14.9 billion in venture capital investments, up from $8.9 billion across all of 2020, data from Global SWF showed.
Participation by sovereign wealth funds and other government funds in U.S. venture capital deals by value reached a five-year high as of the end of June, according to PitchBook data.
While the U.S. represented almost half of all capital flows by sovereign investors into venture capital in 2020, it accounted for only a third of the deals seen in 2021, according to Global SWF, with China and India sucking in more flows to capture 40% of the 2021 total.
No comments:
Post a Comment