There’s still cash in the venture capitalists’ coffers. Despite the effects of the global pandemic, a record amount of venture capital was invested into Australian startups in 2020, with 92 deals recorded so far this year, according to data from KPMG.
KPMG’s latest Venture Pulse report shows that startup investment in Australia reached US$944.7 million, in the first six months of 2020, up from US$627.3 million in H1 2019.
Global VC investment stayed relatively even from US$63.8 billion across 5,624 deals in Q1’20 to over US$62.9 billion across 4,502 deals in Q2’20. The US alone accounted for more than half of VC investment globally during Q2’20, with US$34.3 billion of investment across 2,197 deals.
“Australian startups have continued to attract record levels, despite the ongoing impact of the pandemic,” said Amanda Price Head of KPMG High Growth Ventures in Australia.
“This points to how lockdown has rapidly accelerated digital trends and increased the importance of digital business models and solutions, from B2B solutions to edtech and beyond. For example, globally B2B productivity solutions accounted for US$14.3 billion in VC investment over the past three months.”
According to Price, Q3 will likely show whether VC investment will withstand the full brunt of the pandemic’s impact, and whether Australian startups can turn the ongoing disruption and challenge of the pandemic into an opportunity.
“The pandemic has forced many companies to rethink their 2020 plans, with many mature startups re-evaluating their funding requirements. This is leading many VC investors to reconsider where they may need to invest more over the next quarter or two. Either they may look to help their portfolio companies bridge any gaps, or they instead choose to deploy their capital to companies that are emerging/benefitting as a result of the pandemic.”
The report notes that globally VCs are managing the needs of companies within their existing portfolios and are also taking a somewhat positive view with regard to the current and future impact of the COVID-19 pandemic, looking to fund the technologies being developed or already accelerating in usage due to the ripple effects of policies and economic impacts.
The five largest deals this quarter occurred in the United States and China: California-based Waymo (US$3 billion), Shenzhen’s MGI Tech (US$1 billion), Hangzhou-based Didi Bike (US$1 billion), San Francisco-based Stripe (US$850 million) and Beijing-based Zuoyebang (US$750 million).