By diving into the early impact of COVID-19 on venture funding, we are able to identify which countries and regions performed better than others and dig into why that might be the case. This allows us to spot geographic regions on the rise, evaluate the fastest-growing sectors within those regions, and predict where pockets of opportunity may exist in the second half of 2020. This report is based on data in Crunchbase as of July 20, 2020.
Overall, global venture funding in 1H-2020 is down 6 percent relative to 2019, though this percentage may decline over time as more data from recent months is recorded. For those who expected major venture funding slowdowns, a 6 percent decline is a success.
However, excluding the $15.2 billion funding in the first half of 2020 for Indian telecommunications company Reliance Jio, 1H-2020 is down 17 percent. Given this outlier, it appears expectations about a slow in global venture funding were realized.
That said, large venture deals around the globe still occurred during the pandemic. In addition to Reliance Jio’s $15.2 billion raise, Southeast Asia’s Super Apps Grab and Gojek both raised funding rounds over $800 million. Edtech companies Yuanfudao and Zuoyebang, both based in China, raised $1 billion and $750 million, respectively. And U.S.-based Stripe and U.K.- based Revolut also won big in the fintech sector with $600 million and $500 million raised, respectively.
The highlighted countries in this report represent global startup hubs that have continued to thrive despite the pandemic and that we see as funding hot spots presenting opportunities for salespeople.
In addition, each of the highlighted ecosystems have received a sizable amount of funding over the last few years, ensuring that the markets have a level of maturity and consistency. Given the focus on ecosystems that have capital, the majority of attention in this report is focused on countries in APAC and Europe as well as the U.S.
Key Report Insights For the purposes of this report, 1H refers to January through June.
Technology growth rounds refer to private-equity rounds for venture-backed companies.
- Global venture funding is down 6 percent from the first half of 2019. Excluding $15.2 billion of funding for India’s Reliance Jio, 1H-2020 is down 17 percent from 1H-2019. In 1H-2020, late-stage and technology growth rounds accounted for 66 percent of funding, up from 59 percent in 1H-2019.
- Funding in North America equaled 49 percent of total global venture funding in 1H-2020, Asia received 36 percent, and Europe was the third highest with 13 percent. The percentage of venture funding that went to Asia increased 5 percent from 1H-2019 to 1H-2020.
- There does not seem to be a strong relationship between the toll COVID-19 has taken on a country and venture funding yet, although China and Spain suffered. In 2020, China and Spain both recorded their lowest first-half years in the past five years, with China down 33 percent from the first half of 2019 and Spain down 55 percent.
- Despite overall venture funding being slightly down, we’ve found the following global funding hot spots: Massachusetts (U.S.), India, Indonesia, Israel, Australia and New Zealand, France, Belgium, and Brazil. The U.S. made up 97 percent of North America’s $64.1 billion of funding in 1H-2020. In the U.S., Massachusetts experienced a 24 percent increase in venture funding in 1H-2020 when compared to 1H-2019.
- Funding in Asia increased by 8 percent from 1H-2019 to 1H-2020, largely due to India’s Reliance Jio. Southeast Asia and Israel also have been picking up speed. Australia and New Zealand collectively grew 50 percent in 1H-2020 from 1H-2019.
- Europe venture funding declined 20 percent from 1H-2019. The United Kingdom and Spain experienced notable funding hits, but France and Belgium still made strong showings despite the pandemic.
- Although Brazil was the second-hardest hit country by COVID-19, it almost matched its record-high funding in the first half of 2020. Brazil makes up 90 percent of venture funding in South America.