附近上门

In March, as we all began to fully wrap our heads around the potential impact of the COVID-19 pandemic, the future of startup funding seemed clearly in jeopardy.

Subscribe to the 附近上门 Daily

Many hypothesized that there would be a slowdown in funding and fewer deals made. The logistics of how firms could invest in a company and teams they鈥檝e never met was a whole new obstacle. Further, how investors commit with confidence amid such uncertainty in the world was (and is) a major challenge.

But investors adapted and deals still happened.

However, with the end-of-quarter data in hand, we see that venture dollars invested in North American startups were down for the first half of the year compared to the first half of last year. The same was true specifically for the second quarter.

In general, funding counts for the most recent quarter will be lower as funding rounds are added after the quarter closes. Typically, the data lag is greater at the seed and early funding stages. Funding amounts are less impacted as larger funding rounds are more likely to be announced in a timely manner. (For more on this, see our Methodology section below).

According to 附近上门 data, $64 billion was invested in North American startups (companies based in Canada and the United States) in the first half of 2020. That鈥檚 down 10 percent compared to the same period in 2019, when $70 billion was invested.

(In the above chart, the actual 1-H 2020 number may shift slightly given reporting delays. See Methodology description below for more details.)

The chaos surrounding COVID-19 in the United States really started in March, basically toward the end of the first quarter. So the reality check came in the second quarter.

The second quarter of 2020 was the first full quarter in the new COVID-19 world, and during that time $29.8 billion was invested in North American startups–18 percent less than the same period last year and 12 percent less than the previous quarter.

The majority of VC funding raised throughout Q2 was in supergiant rounds, or those of $100 million or more. Although supergiant rounds were flat year over year, rounds below $100 million were down 31 percent year over year.

The overall dollar volume for VC funding in North America was down for the second quarter of 2020 compared to the same period last year and the number of deals was also down for companies across all stages.

Funding by stage

A few data points to consider by funding stage:

• Seed and angel investment saw $1.1 billion across 699 deals in the second quarter of 2020, down from $1.7 billion across 1,773 deals in the second quarter of 2019.
• Early-stage investment saw $11.1 billion invested across 555 deals in Q2 2020, down from $12.6 billion across 887 deals in Q2 2019.
• Late-stage saw $15.9 billion invested in Q2 2020 across 191 deals, compared to $20.7 billion across 306 deals in Q2 2019.

Notable large funding rounds include s $750 million raise, 鈥檚 $700 million , and 鈥檚 $600 million . had the largest raise of the quarter for a VC-backed company, taking in $1 billion as the travel industry took a hit due to COVID-19. The round came from private equity firms and .

Exits

Exits also took a hit in Q2. Acquisitions of venture-backed North American companies (that hadn鈥檛 previously gone public) were down significantly in Q2 2020–for acquisitions with disclosed amounts–compared to all of the past year. There were 177 acquisitions totaling $9.7 billion in Q2 2020, down from 278 acquisitions totaling $21.7 billion for the year-ago period.

Among the largest M&A deals were 鈥檚 acquisition of for $1.4 billion, 鈥檚 acquisition of for $1.2 billion, and 鈥檚 acquisition of for $1.2 billion. Quarantine helped boost at-home fitness companies, and athleisure company was able to nab connected fitness startup for $500 million.

In terms of companies going public, there was a lull in the IPO market–at least for tech companies. Only toward the end of Q2 did tech IPOs pick back up. and had notable exits, raising $935 million and $468 million, respectively.

In conclusion

It鈥檚 too early to guess how things will shake out for Q3. The IPO market, at least, seems to be picking up for tech startups, with companies like ZoomInfo, Vroom, and Lemonade being well-received by public investors. As for funding, we鈥檒l be keeping an eye out for the next quarter

Methodology

The data contained in this report comes directly from 附近上门, and is based on reported data.

For this quarter we are changing our methodology to report on actual vs. projected funding. We have made this decision as the data lag on funding amounts is less pronounced than earlier funding cycles. With ever-larger funding rounds being raised by private companies and announced in a timely fashion, we found that a year out we see an increase per quarter under 10 percent for funding amounts.

Data lags are most pronounced at the earliest stages of venture activity with seed funding amounts increasing significantly after the end of a quarter.

The most recent quarter will increase over time relative to previous quarters. For funding counts, we notice a strong data lag, especially at the seed and early stages, by聽 as much as 26 percent to 41 percent a year out.

Please note that all funding values are given in U.S. dollars unless otherwise noted. 附近上门 converts foreign currencies to U.S. dollars at the prevailing spot rate from the date funding rounds, acquisitions, IPOs and other financial events are reported. Even if those events were added to 附近上门 long after the event was announced, foreign currency transactions are converted at the historic spot price.

Glossary of Funding Terms

Seed and angel consists of seed, pre-seed and angel rounds. 附近上门 also includes venture rounds of unknown series, equity crowdfunding, and convertible notes at $3 million (USD or as-converted USD equivalent) or less.

Early-stage consists of Series A and Series B rounds, as well as other round types. 附近上门 includes venture rounds of unknown series, corporate venture, and other rounds above $3 million, and those less than or equal to $15 million.

Late-stage consists of Series C, Series D, Series E and later-lettered venture rounds following the 鈥淪eries [Letter]鈥� naming convention. Also included are venture rounds of unknown series,聽 corporate venture, and other rounds above $15 million.

Technology growth is a private equity round raised by a company that has previously raised a 鈥渧enture鈥� round. (So basically, any round from the previously defined stages.)

Illustration: Dom Guzman