1. Global Trends:
• Deals and Funding: Global retail tech deals reached an all-time high of 1,030 in Q3’21, up 31% year-over-year (YoY). However, funding slipped by 5% quarter-over-quarter (QoQ) to $27.9 billion, making it the second-biggest quarter ever in global retail tech funding.
• US Funding: Funding to US retail tech startups in 2021 increased by 35% compared to all of 2020, reaching $26.8 billion year-to-date (YTD).
2. Regional Insights:
• Asia: Asia led in both deals and funding, raising $11.1 billion across 423 deals in Q3’21, accounting for 40% of total global funding. Major investments were made in fast delivery and payments companies.
• US and Europe: The US followed Asia with $7.8 billion across 275 deals. Europe saw $6.1 billion across 210 deals.
3. Unicorns and Valuations:
• Retail Unicorns: Q3’21 added 21 new retail unicorns, bringing the total to 167 globally. Asia accounts for 73 of these unicorns, followed by the US with 63.
• Valuations: The average deal size in 2021 YTD has increased by 76% compared to 2020, reaching $37 million. Median late-stage deal size has more than doubled, reaching $90 million.
4. M&A Activity:
• Strong M&A: Retail M&A activity remained strong with 208 transactions in Q3’21, a 54% increase YoY. E-commerce accounted for nearly half of the M&A deals.
5. Mega-rounds:
• Funding Share: Mega-rounds ($100M+ deals) accounted for 72% of total retail tech funding YTD in 2021, compared to 59% in 2020. Q3’21 saw some of the largest rounds, including Gopuff’s $1B and Gorillas’ $950M rounds.
• Deal Count: Mega-round deals hit a record high of 77 in Q3’21.
6. Sector-specific Insights:
• Food & Beverage Delivery: This sector saw a record $16 billion in funding YTD 2021, up 54% from 2020, making it the top-funded sector. The sector experienced the highest quarterly funding growth across all sectors, up 58% QoQ.
7. Investor Activity:
• Top Investors: SoftBank Group led all investors with 21 deals in Q3’21, followed by Tiger Global Management with 18 deals.
8. Geographic Trends:
• Asia’s Dominance: Asia led in mega-round funding and deal count, with 36 mega-rounds in Q3’21, a quarterly high. Asia accounted for nearly half of all late-stage deals in Q3’21.