5 questions for venture capital in Q3

Somehow the third quarter of 2021 is coming to a close. Instead of a period filled with family and friends and fun, in many parts of the world, the COVID era dragged on, leaving us largely working from home and executing more phone calls than impromptu brunches. Alas.

But in the last handful of quarters, COVID and its impacts have proven to be attractive periods for both startup fundraising and growth. The second quarter, for example, saw huge sums of private capital disbursed around the world, partially predicated on underlying performance from startups themselves, and partially thanks to inexpensive capital bolstering venture coffers.

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Now, with the third quarter wrapping up, The Exchange is prepping for a lengthy dive into global venture capital results. To kick that off, today we’re asking a series of questions: We want to understand how strong Europe’s third quarter was and if the region can match its prior — stellar — fundraising results. We’re interested in what’s going on with China’s venture capital market in the wake of a host of regulatory changes.

We also want to know if the United States is holding onto its position as the leading global venture capital market, and where in the country capital is flowing the most freely. And we want to know where in Latin America we’re seeing the most fundraising acceleration, along with just how important mega-rounds are to recent, aggregate global totals; are big deals still setting the tone for global venture totals?

Today we’ll explore each question in brief, ahead of what we presume will be a long, multipart dive into the data once Q3 comes to a close later this week.

Did Europe’s venture scene keep raising record sums?

Our first question for Europe will be whether it managed to match its impressive Q2 results. There are signs that it may have, as France recently celebrated the slightly random but no less significant milestone of “1 billion euros raised in one day.” Our suspicion is that these deals were actually announced in close succession because none of the involved startups wanted to miss out on the spotlight after raising record amounts — $555 million for marketplace platform Mirakl, $680 million for fantasy sports startup Sorare and $209 million for Vestiaire Collective.

As a follow-on, we’ll likely look into whether this has anything to do with Brexit: Is capital simply redirecting out of the U.K.? Our intuition is that it isn’t, since we are still hearing about a lot of activity in London and beyond. But capital that might have kept flowing in that direction could now be going to other places in Europe — so we’ll take a closer look at how widely distributed it is, and also at what’s going on with Euronext in terms of tech IPOs.

What’s going on with China’s venture capital market?

Recent regulatory shifts have remade China’s technology landscape. Tech giants have been brought to heel, and rule changes to edtech, social media, gaming and other varietals have shaken both tech companies and other industries in the country. Despite all that, it isn’t hard to find commentary discussing the possible positive impact on China’s economy thanks to the new set of rules.