Global transactions of special purpose acquisition companies (SPACs) have slowed down, whereas the venture capital (VC) market last year posted the strongest performance levels ever and will remain high in 2022, a report by KPMG showed.
Going public via overseas SPACs is appealing for Taiwan’s startups aiming to get listed on the New York Stock Exchange or the Nasdaq. For example, Gogoro, Taiwan-based electric scooter maker and battery swapping system supplier, has announced its plan to launch an initial public offering (IPO) on the Nasdaq via a merger with a SPAC.
However, KPMG’s report showed that SPAC deals in Q421 continued to drop and that some companies emerging via SPACs did not do well with their IPOs.
During the last quarter, some enterprises had considered going public via SPACs, but they dropped the idea and turned to capital raising through multiple rounds, KPMG said, highlighting the increasing prioritization of IPO readiness over speed.
On the other hand, “2021 was the strongest year for VC investment on record,” and VC-backed companies raised a total of US$171.4 billion across 8,710 deals, the report said.
“The ready availability of cash, the significant returns seen on exits throughout the year, and the increasing participation of corporates, family offices, and a range of other non-traditional investors has only added to the overall attractiveness of the market,” it said.
“The robust VC investment climate was highlighted in part by record-setting investment levels in numerous jurisdictions, including the US, Canada, Brazil, the UK, Germany, Israel, the Nordic region, Ireland, and India,” it said.
The combination of a strong investment environment and the continued drive for digitalization will likely help keep VC investment high heading into Q122, it added.
Meanwhile, unicorn companies globally continued to account for a significant amount of VC investment in 2021, the report said.
Several existing unicorns raised large rounds in Q421, including India’s J&T Express ($2.5 billion), California-based cloud security services supplier Lacework ($1.3 billion), Boston-based consumer goods company Thrasio ($1 billion), and German fintech startup N26 ($900 million). The number of unicorn deals more than doubled year-over-year, along with the total amount invested in unicorn companies, it said.
Less mature VC markets saw new unicorns birthed during the quarter, including Vietnam (Sky Mavis, Momo), Brazil (CargoX, Olist), Mexico (Clara, Merama), Indonesia (Kopi Kenangan, Ajaib), and the Philippines (Mynt), showing the growing diversity and size of startups attracting investment, it said.
VC investors remained interested in fintech, health, and biotech, B2B services, cleantech, mobility, autotech, cybersecurity, and delivery, while the importance of ESG continued to gain ground, helped in part by the COP26 conference, the report said.
ESG-specific VC investments has an increasing focus on net-zero or low-emissions technologies across sectors, include food, agtech, and alternative energy, it noted.
Another accounting consultancy, Deloitte, has noted the problems with IPOs in Taiwan last year.
In part due to the pandemic, some IPO submissions in Taiwan were delayed, and the number of new listings also decreased, Deloitte Taiwan CEO Jason Ke said earlier this year.
Heading into 2022, businesses will pay more attention to sustainability-related issues and ESG, instead of only focusing on profits and earnings per share (EPS), Ke said.
The number of IPOs by high-tech, electronics, and biotech companies is expected to pick up this year, with new listings topping 60, he said.
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