Welcome to the Q2’20 edition of Venture Pulse,KPMG Private Enterprise’s quarterly report highlighting the key trends, opportunities, and challenges facing the venture capital market globally and in major regions around the world.
Q2’20 saw regions across the globe continuing to grapple with the challenges associated with COVID-19, including economic turbulence, sudden spikes in unemployment rates, restrictions on travel and movement, and the ramifications of the continued shutdown or slowdown of many sectors and industries. As countries and territories began to re-open their economies during Q2’20, both Venture Capital (VC) investors and startups worked to understand the ‘new reality’ and how it would affect business operations.
Venture Capital investment continued to show some resilience compared to broader economic trends, particularly in the US and Europe. In the US, autonomous driving company Waymo raised a massive $3 billion in the largest VC deal of the quarter. Fintech investment was particularly hot in the US during Q2’20, with Stripe, Samsara, Palantir Technologies and Indigo (Horticulture) all raising large deals. In Europe, sectors seen as high potential despite or because of COVID-19 attracted significant investors attention, including food delivery, fintech and health and biotech. VC investment in Asia remained relatively soft in Q2’20, despite $1 billion raises by China-based Didi Bike and MGI Tech.
Over the next quarter, many VC investors are expected to remain highly focused on their own portfolio companies, assessing whether they can thrive in the new reality and providing follow-on funding for companies that have had to delay their exit plans. While early-stage companies globally will likely continue to find it difficult to attract funding, companies that respond to accelerating trends, such as remote working, ecommerce, and health and biotech, could see an uptick in investment interest. It is also likely that companies looking for investment will need to demonstrate an even greater commitment to equality and diversity.
In this quarter’s edition of Venture Pulse, we look at these and a number of other global and regional trends, including:
- The impact of travel restrictions on VC investment in key jurisdictions
- The downward pressure on valuations as a result of COVID-19
- The longer-term impact of COVID-19 on consumer and business behaviors
- The increasing focus on profitability and cash management
We hope you find this edition of Venture Pulse insightful. If you would like to discuss any of the results in more detail, please contact Anna Scally via this form.