The three major sectors of healthcare, retail tech, and fintech have seen an increase in the number and size of deals since the COVID-19 pandemic, with investment amounts reaching $30B in each of them in Q3 2021. Retail tech has seen the greatest growth, driven by the expansion of the e-commerce market, followed by fintech, which has also benefited from the expansion of online payments. Healthcare has also seen an expansion in online medical consultations and home care due to the impact of the COVID-19 pandemic.
What is common across the three stages - Series C, D, and E+ - is that in the three quarters up to Q3 2021, both the number of deals and the amount have exceeded those of the full year of 2020. The investment amount ranges for the top 30 at each stage are $200-$750 for C, $230-$1.1B for D, and $310-$1.6B for E+. At the early stage, there was a sharp increase in biotech companies due to their high future potential, but at the later stage, fintech and retail tech companies already have many customers in the market and are being invested in due to their high profitability.
Startups with a business model innovation type (transformation through digital transformation) make up the largest proportion, accounting for 50-60% of the total, and in this case, the main target is disrupting the existing old economy. Startups with a technology innovation type (development of new technology) make up a smaller proportion, accounting for 20-30% of the total, and in these cases, the main target is creating new markets of the future, such as space tech or blockchain. The latter technology type requires a long period of time and large-scale investment before it can be monetized, but it has the greatest potential to create new industries, and is an area where the strengths of traditional VCs, who can invest in nurturing them, can be fully utilized.
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