Pandemic’s VC deal toll: Midyear perspective

With two days left in the first half of 2020, midyear figures show the toll that the venture capital ecosystem has suffered from the worst economic downturn in nearly a century.

It’s no surprise that the US venture market has slowed down dramatically and remains on pace to end 2020 well below high levels seen in the past two years. But there are some bright spots, according to PitchBook data covering deals made as of June 17:

VC investment is down from last year at this time but invested capital is still holding well above levels seen in comparable periods of recent years. Investors bet $63.2 billion on VC-backed deals, down from $72.2 billion in the last year’s first half.

Deal flow has fallen more sharply, however, with 4,675 funding rounds this year vs. 6,357 in last year’s first half

One segment of the market that has held up: mega-rounds. Deals of $100 million or more are a bit behind last year’s first-half tally, but the rough $29 billion sum of mega-fundraising rounds puts this category on track to surpass last year’s $55 billion, the second-biggest haul on record.

By contrast, as would be expected during these panicky times, investors held onto their seed capital. Deals plunged 45% to 803 vs. 1,447 deals done in the first half of 2019, with invested capital down to $2.2 billion from $3.3 billion. Dealmaking goes on, but it’s clearly favoring well-established players.

Source: Pitchbook