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Unicorn birth rate climbed during April-June 2016 quarter, the first time in three quarters, revealed Venture Plus, the quarterly global report on VC trends jointly published by KPMG International and CB Insights.
The April-June quarter saw seven new unicorns — five from North America, two from Asia and none in Europe or elsewhere. This was up from the five born in January-March 2016. However, this was less than one-third of the 25 unicorns birthed during the July-September 2015 peak, the report said.
In the venture capital industry, a unicorn refers to any tech start-up company that reaches a $1 billion market value as determined by private or public investment.
Among the April-June 2016 quarter’s new unicorns were Zoox, SMS Assist and Human Longevity.
Market uncertainty “The long-term impact of Brexit won’t be clear for a while — which will create even more uncertainty in the market,” says ArikSpeier, Head of Technology, KPMG Somekh Chaikin in Israel.
“This will likely keep investors cautious. While we will likely continue to see follow-on investments in unicorns that have substantial business and a clear path to profitability, some others will not be able to raise future rounds or will, alternatively, experience deep cuts in their valuations and down rounds.”
Deal activity Venture capital and deal activity in Asia dropped sharply for the third straight quarter in April-June 2016, highlighting concerns regarding global uncertainties,— the slowing of the Chinese economy and depreciation of the yuan.
Deal activity in other parts of Asia shrank significantly, with India-based investment, in particular, dropping well under $600 million this quarter.
Indian deals For the April-June quarter this year, the number of deals focused on India stood at 111 with investments of $583 million.
In January-March quarter this year, the number of deals stood at 126 with deal value at $ 1.402 billion.
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