Global venture capital investment showed continued resilience in the second quarter of 2020, reaching $62.9 billion across 4,502 deals – almost equalling total investment from the first quarter of the year and only slightly off the pace seen in 2019’s second quarter, which registered $69.8 billion invested, according to KPMG Private Enterprise’s Venture Pulse report.
Venture investors continued to pour money into their existing portfolio– particularly late-stage companies. This focus on late-stage deals continued a trend toward investing in supposedly safer bets seen in the quarters prior to COVID-19. The top 10 deals globally accounted for well over $9 billion of investment. US autonomous driving company Waymo raised a $3 billion funding round in the quarter’s largest deal, while China-based MGI Tech and Didi Bike both raised $1 billion rounds. Meanwhile, the number of early-stage deals, and first-time deals fell.
While the impact of the pandemic on the VC market to date has been limited, it has rapidly accelerated digital trends and increased the importance of digital business models and solutions, such as B2B solutions and edtech. At mid-year, B2B productivity solutions accounted for $14.3 billion in VC investment.
“It’s no surprise that certain VC investors are focusing on their existing portfolios,” explained Conor Moore, Co-Leader, KPMG Private Enterprise Emerging Giants Network, KPMG International. “The pandemic has forced many companies to rethink their 2020 plans, with many mature startups that may have planned for an exit delaying their efforts to 2021. This is leading VC investors to re-evaluate where they may need to invest more over the next quarter or two to help their portfolio companies bridge any gaps or whether they choose to deploy the capital to companies that are emerging/benefitting as a result of the pandemic.”
Get the full report and more information at KPMG’s website