Mckinsey venture capital Our analysis shows that both the mean and the median holding periods when investors exit have been about five years, no different than the holding periods for conventional PE and venture-capital (VC) firms. Mar 19, 2024 · Founded in 2000, venture capital (VC) firm Emerald Technology Ventures was among the first VCs to recognize the potential of sustainability investing, well before the terms “ESG” and “green investments” became mainstream. Our research shows that VC companies invested in 2,200 biotech start-ups worldwide in 2016; by 2021, that number had grown to 3,100. We synthesized key value drivers by assessing portfolio and company capabilities against peer company sets, articulated the portfolio narrative by considering scientific differentiations, competitive positioning, and commercial value, and cocreated the investment New-venture building is the strategic move expected most often by CEOs, though there’s variance among CEOs and other business leaders. And although buyout deal volumes declined by Jan 26, 2024 · Put another way, capital-intense climate tech ventures aren’t quite a fit for traditional venture capital (VC) (their businesses offer the promise of extraordinary growth and don’t yet have positive cash flow, but need more capital, sooner than VC firms typically provide), aren’t quite a match for private equity (PE) (which tends to Oct 24, 2023 · The fintech industry raised record capital in the second half of the last decade. 7 billion) was more than twice the amount raised in 2019 ($11. Partner. Back to The Week in Charts Venture capital. Dec 12, 2023 · Amid a challenging public-market environment, venture capital (VC) funding has provided a much-needed lifeline to fuel biotech innovation. Within the agtech sector, 1 Includes developing companies in core agricultural sectors, such as precision-spraying technologies and next-generation seeds, as well as those spanning adjacent industries, such as chemicals (sustainable Nov 16, 2022 · Private-venture funds. Browse by: Mar 18, 2025 · The defense tech startup industry is attracting more funding from venture capital investors. Even with restrictions in capital availability and higher interest rates, there is a greater awareness of, and commitment to, venture building. Software players represent approximately 30 percent of US-based insurtechs today, and insurance players across the value chain will continue to rely on scalable May 7, 2025 · So that has changed with tremendous speed. 3 times more pension funds were committed to European venture capital in 2018 compared with the four previous years. 8 billion in 2011 (Exhibit 1). 5 trillion in AUM, excluding credit and infrastructure. Among strategic horizons for climate technology, horizon Oct 7, 2021 · Once known for technology innovations such as the Walkman, gaming systems and bullet trains, Japan has long been a laggard when it comes to venture capital and start-up success. Mar 19, 2024 · McKinsey: How has the ongoing slowdown in overall venture capital and agtech investment affected the sector? Anthony Chow: The last 18 months have been extremely challenging, not just for the field of cellular agriculture, but for public and private funding markets alike. Sid Ramtri is a core member of our private equity and venture capital practices. We analyzed funding by industry and region, focusing on the changing dynamics of the market. Fuel pairs start-up experts with McKinsey’s deep industry and functional expertise and global network. Jun 15, 2022 · The share of investments in quantum coming from venture-capital and other private-capital entities increased in the second half of 2021 and now account for more than 70 percent of investments (up from 50 percent in September 2021), suggesting growing confidence that the technology will provide returns. HV Capital was the first VC to launch a continuation fund in the German tech sector to finance growth companies. May 10, 2021 · We have seen a steady increase in corporate–start-up engagements. Venture capital includes seed/R&D, start -up/early-stage, and small a nd medium enterprises (SMEs). Despite also registering a decline after peaking in 2021, with several investments occurring in down or flat rounds, 4 Gabrielle Masson, “After pandemic sugar rush, a market ‘hangover’ opens biotech to funding approaches steeped in stigma,” Fierce Over the last years, LatAm startups underwent their first significant venture capital boom An innovation environment never seen before and an abundance of capital flow in the region 34 Dec 17, 2024 · Based on interviews with leading venture capital (VC) investors across Europe, this strong performance can be attributed to several factors arising from the characteristics of the sector 7 The European deep tech report 2023, Lakestar, Walden Catalyst, and Dealroom. I think people in China are still learning. Across asset classes, Asia lagged behind North America and Europe year over year in fundraising (driven principally by a retreat from China), performance, and deal activity. Both large corporations and start-ups can gain a lot from collaboration, and corporate venture capital (CVC) is a common approach to such partnerships. Nov 14, 2022 · These developments have helped the edtech sector boom; venture capitalists (VCs) invested $20. 1 “How CEOs are Jul 12, 2023 · The global capital intake for venture capitalist (VC) firms has decreased significantly, dropping $200 billion from 2021 to 2022, with an additional decline of $50 billion expected in 2023. Jun 23, 2023 · Hispanic is used where founders identify as Hispanic or where research specifically refers to Hispanic people. (This could require consolidation of these funds and regulation changes to allow the shifting of fund allocations. Venture capital (VC) funding grew from $19. Jun 29, 2021 · Biotech funding continues to grow at a record rate from both public and private sources. Deals yielded a wide range of returns no matter the holding period. 5 billion between 2020 and 2022, more than triple that of the previous three years (Exhibit 2). Oct 22, 2024 · Amid geopolitical tensions, easing inflation in developed economies, and expected interest rate cuts in some of the world’s largest economies, 1 Sven Smit, Jeffrey Condon, and Krzysztof Kwiatkowski, “Global Economics Intelligence executive summary, July 2024,” McKinsey, August 23, 2024. In 2019, capital invested in rounds of $100 million and more in Europe was four times that of 2014. Deal activity increased in tandem, with the number of deals growing 1. . Private equity includes buyouts, private investment in public equity (PIPE), expansion, turnaround, mezzanine/pre-IPO, and bridge loans. Jun 26, 2017 · But most of the Chinese firms didn’t fully understand venture capital, and many of the great deals from 2005 to 2010 got gobbled up by US venture firms. public companies. 8 billion) (Exhibit 1). Jun 12, 2023 · Human activity began altering the climate in the mid-19th century, when the industrial revolution began unleashing unprecedented amounts of carbon into the atmosphere. May 28, 2020 · Startup and venture capital funding for logistics fell from $3. 2 Dominic-Madori Davis, “Latin American founders see VC funding drop as investors retreat from underrepresented cohorts An early-stage oncology focused biotech was planning for public listing and we supported them in crafting the IPO equity story. Reducing barriers to investment, such as energy costs, talent shortages, business and labor market regulation, and geo- and macroeconomic uncertainty, can give Europe a pulse on its competitiveness and help attract capital. 2 times over this period. Apr 1, 2025 · May 13, 2025 Venture capitalists are increasingly investing in climate-focused technology businesses. Support We deploy dedicated McKinsey teams, resources, experts and tailored support to startup founders on their journey to sustainable, inclusive growth Oct 19, 2022 · More than 80 percent of founders gained work experience prior to building their successful venture, and more than half had founded start-ups before. May 3, 2023 · The proportion of late-stage venture capital in total AEC tech investment totaled $11. 6 billion in 2020, and the amount of capital raised during IPOs in 2020 ($28. Oct 30, 2023 · For example, venture capital experienced a significant decline from a four-year CAGR of 12 percent in insurtech deals to a 21 percent decline in 2022. The World Economic Forum and McKinsey & Company's new report Fuelling Innovation: Closing Fintech Funding Gaps analyses global disparities in fintech VC funding and proposes strategies to address these gaps and foster innovation. Buyout notched its highest fund - raising year ever in 2023, and its performance improved, with funds posting a (still paltry) 5 percent net internal rate of return through September 30. Dec 12, 2024 · Today, returns on invested capital are four percentage points higher in the United States than in Europe. Venture capitalists’ unique approach to investment and innovation has played a pivotal role in launching one-fifth of the largest U. Software insurtechs gain traction. Oct 1, 2024 · European policy makers could also boost private capital investment through higher private equity and venture capital allocations by pension funds and insurers. S. Fuel, a McKinsey company, was launched in 2014 to help start-ups reach the future faster and improve their odds of success. Feb 28, 2018 · Capital doesn’t need as much patience as you think. 1 Our analysis is based on a review of approximately 650 logistics start-ups, which account for more than $98 billion in total venture capital funding over the past decade. This is an edited transcript of their conversation. Jan 22, 2024 · In this episode of The Venture, Paul Jenkins, senior partner and global coleader of Leap by McKinsey, sat down with McKinsey’s Tomas Laboutka to discuss the survey’s findings, which include a priority on creating green and gen AI−related businesses, why the current climate favors incumbents, and the need to adopt a portfolio approach to Aug 22, 2021 · In recent years, start-ups and venture capital have seen a boom—indeed, recent reporting suggests 2021 may be on track to double last year’s record levels of start-up financing in the US and triple 2020’s venture funding in Europe. During this session, Matt Banholzer and Sid Ramtri , authors of an article on successful CVC, will be joined by David Horowitz and Kindra Tatarsky from Touchdown Ventures to share best practices Oct 8, 2024 · According to McKinsey & Company, a better model is known as venture capital-as-a-service (VCaaS). Mar 31, 2022 · Venture capital (VC) continued to attract capital on the back of a decade of strong performance but was outpaced by growth equity. 1 McKinsey’s analysis based on CB Insights data. Alibaba and Tencent, for instance, are US funded. Apr 30, 2021 · In an effort to understand worldwide biotech financing in the context of the COVID-19 crisis, McKinsey analyzed the sector’s financial performance and interviewed 20 C-level executives from small and midsize biotechs and venture-capital (VC) firms. 18 “Investment: Taking the pulse of European competitiveness,” McKinsey Global Institute, June 20, 2024 Annual equity investments have averaged about €130 billion for the past three years, spanning all Aug 10, 2016 · Silicon Valley venture-capital powerhouse Draper Fisher Jurvetson has backed almost two dozen unicorns—start-ups valued at more than $1 billion—including Box, Skype, Tumblr, and Twitter. I’m Daniel Eisenberg. More than three-quarters of the Fortune 100 are active in the venture capital (VC) space and half have a VC arm set up as a subsidiary, not including companies with internal VC business units. May 20, 2025 · Venture capital (VC) recorded a bigger decline in deal count and lower growth in deal value than other private equity sub-asset classes globally. Average deal size is growing as well, particularly in Asia , where it is almost twice as large as the global average, due largely to a number of mega deals. Soaring IPOs, strong funding rounds, unprecedented demand for digital products and services around the world—in recent years, start-ups and venture capital have experienced a boom many say can only be matched by the original dotcom boom of the late ‘90s. : Lower competition. S McKinsey Webcasts Thank you for your interest in our exclusive McKinsey webcast on " Driving innovation with corporate venture capital " with Matt Banholzer , Sid Ramtri , David Horowitz , and Kindra Tatarsky Dec 13, 2022 · The company supports start-ups with capital between €500,000 and €50 million. 4 billion in 2015 to $33. Founders of Asian scale-ups, for instance, commonly have less work experience prior to starting their venture. Over the past 20 years, the industry has been a relatively stable source of capital despite May 27, 2025 · Companies are now turning to building new businesses to fuel innovation and open new revenue sources. Logistics startups are thus focusing on securing liquidity and cash flows from operations, since growth funding has temporarily dried up. Almost every early good deal went to a conglomerate of foreign venture capitalists. Our own experience suggests a clear competitive advantage from iterating with a gen AI Feb 4, 2025 · The Venture is an original podcast series hosted by serial business builders from Leap by McKinsey. McKinsey commentary. 5 percent respectively of total US venture capital (VC) funding. Jul 24, 2024 · The decline in postpandemic logistics funding continues. Using our proven playbook, we can help turn your next corporate venture into outsized growth. Half of CEOs surveyed in the fifth annual McKinsey Global Survey on new-venture building view the development of new businesses as one of their top three strategic priorities, and 90 percent of investors advocate for increased or maintained new-business-building investments. With increased funding for VC and companies remaining private for longer, the investable universe of growth companies has expanded substantially. The VC Nov 2, 2023 · Matt Banholzer leads McKinsey’s global innovation practice. When you have a phenomenon—a market transition enabled by new technology—with big money and capital moving rapidly, and innovation, you get what we’re seeing now. Funding Oct 7, 2024 · Alka Goel, Alkemi Growth Capital “In business school I got more exposure, and a lot of folks I looked up to wanted to get into McKinsey, so honestly I just rolled with the punches, learnt at every stage, and the plans developed,” she tells VCJ. ) Leapfrog in semiconductors. 1 Unless otherwise noted, all figures in this paper were derived from our original research. Oct 7, 2021 · Once known for technology innovations such as the Walkman, gaming systems and bullet trains, Japan has long been a laggard when it comes to venture capital and start-up success. Meanwhile, M&A continues to be the largest source of funding for AEC tech ventures, accounting for 48 percent of all investments and 68 percent of all exits. May 14, 2021 · Daniel Eisenberg: Hello, and welcome to McKinsey On Start-ups. Additional VC investment exceeded DOD investment in six of the 11 areas displayed: space technology, trusted AI and autonomy, advanced computing and software, human–machine interfaces, biotechnology Apr 1, 2025 · European private equity (PE) and venture capital (VC) investors have about €1. The many active VC investors in the space sector include Andreessen Horowitz, Founders Fund, and Lux Capital. 8 billion, up from $1. About EQT Ventures Dec 17, 2018 · Meanwhile, global venture capital (VC) fintech investment in 2018 has already reached $30. 1 “Global EdTech venture capital report - full year 2021,” HolonIQ, January 2, 2022. For more discussions on the strategy issues that matter, follow the series on your preferred podcast platform. The funding rounds that have been the hardest to get done are those of Mar 28, 2024 · Buyout and venture capital, the two largest PE sub-asset classes, charted wildly different courses over the past 18 months. half of CEOs surveyed in the fifth annual McKinsey Global Survey on new-venture building view the Nov 9, 2022 · In fact, large companies are now involved in about a third of all venture deals—an all-time high. While these patterns broadly hold true globally, there are some regional differences. co, November 2023; expert input. Jun 10, 2022 · The past three years have seen a boom in venture capital (VC) funding in the biotechnology sector. 8 billion in the edtech sector globally in 2021. In this interview, one of the VC firm’s founding partners, Steve Jurvetson, tells McKinsey’s Michael Chui what he looks for when he makes investment McKinsey In works hand-in-hand with founders and their startups to achieve sustainable, inclusive growth — without charging any fees or taking equity—across three main themes. But an innovative new venture capital (VC) climate tech venture builder is trying to mitigate some of the ensuing catastrophic climate change with a laudable and lofty goal: reducing 10 percent of global carbon emissions by 2035. Global venture-capital funding and deals reached their highest ever level of $36. In each episode, our experts cut through the noise to empower corporate entrepreneurs in designing, building, and scaling new companies. Clearly, there is a huge appetite, although the pandemic slightly depressed collaboration activity. PE firms have moved to fill the space, and the supply Jan 17, 2025 · Innovation labs are adopting gen AI platforms to expedite venture development from ideation to launch. Venture capital (VC) investments in the space sector have grown substantially over the past decade as investors have come to appreciate the long-term commercial potential of the industry. founders received only 1 percent and 1. 1 Venture capital firms use signals from multiple businesses to find patterns and insights from their portfolios to help them make key investment decisions. This allows a corporation to outsource its startup investing to a trusted VC firm. 3 billion in 2020, a 17 percent year-over-year increase (see sidebar “What are fintechs?”). And if you’re not an AI start-up, you probably won’t get funded by the venture capital world. “I loved working hard, it’s very natural to me, and I loved the experience at McKinsey. This isn’t seen just with classical tech companies; this focus is spreading to many other companies as well. Between 2013 and 2019, there was 32 percent year-on-year growth in corporate venture capital (CVC) investments, and three-quarters of Fortune 100 companies have active venture units. The world’s third-largest economy has produced just a handful of tech unicorns, and funding for new businesses has been a relative pittance compared to the massive This is the moment to put business building at the heart of your growth strategy. 1 Based on AENU research. A significant investment shift is evident across various technology sectors, with a notable rise in capital for horizon three technologies, note Senior Partner Rajat Gupta and coauthors. 1 Includes private-equity, venture capital, and real estate investments. Buyout notched its highest fundraising year ever in 2023, and its performance improved, with funds posting a (still paltry) 5 percent net internal rate of return through September 30. This makes HV Capital one of the few venture capitalists in Europe that can finance start-ups through all growth phases. And three-quarters of the largest U. Nov 10, 2022 · Over the past decade, countless start-ups have benefited from a venture capital (VC) market that has seen steady growth in dollars invested and deals completed. This recent wave is driven by investors' techno-optimist patriotism and geopolitical tensions. Venture capital (VC) continued to attract capital on the back of a decade of strong performance but was outpaced by growth equity. Share of respondents who expect their organization to make given strategic move in next 12 months, %1 McKinsey & Company Corporate venture capital activities Divestitures or carve-outs accepted more readily by Indian entrepreneurs as a source of strategic capital that can play a transformational role in the growth of their businesses by bringing in required new capabilities and discipline unavailable from other forms of capital. Sep 4, 2024 · Venture capital (VC) plays a key role in enabling fintech innovation, but many companies struggle to access it. That’s more than 40 times the amount they invested in 2010. Each chart is split into two squares representing direct DOD spend in fiscal year 2023 and additional venture capital (VC) investment in 2023. 5 billion in the first quarter of 2019 to $700 million in the first quarter of 2020 as the coronavirus spread worldwide. Oct 11, 2020 · As VC returns have gained additional momentum in recent years, pension-fund investments in Europe have significantly increased: 2. venture capital, the two largest PE sub-asset classes, charted wildly different courses over the past 18 months. gwlsdyrkfjxddspowrcredfbnazgdgswtdmrjkggueqa