IGI Logo

The Covid-19 pandemic had little impact on the deal street as global VC funding in 2020 was $300.5 billion - up from $281.6 billion in 2019 and second only to 2018's record $329.7 billion despite a drop in deal volume, the latest edition of a KPMG report said on Saturday.

The Private Enterprise Venture Pulse report, said that despite global uncertainty resulting from a number of ongoing events including the COVID-19 pandemic, global VC investment remained very robust in Q4'20, with $80.8 billion in investment across 5,418 deals.

It is this strong performance that helped drive annual global VC investment to $300.5 billion despite a drop in deal volume.

Global median deal sizes rose across all deal stages in 2020 - to $1.2 million for seed/angel deals, $4.5 million for early stage deals, and $9.9 million for later stage deals.

Also, global first-time venture financing dropped for the third straight year - to $24.9 billion across 6,580 deals in 2020 from $29.4 billion across 8,149 deals in 2019, the report said.

China accounted for the top five largest VC deals in the world during Q4'20.

The report said that Global VC-backed exit activity reached a record high of $189 billion in Q4'20 as the march of unicorn exits continued with high profile IPO exits.

With regard to India, the report said that VC investment here remained relatively robust in Q4'20. While VC investment dropped somewhat during the quarter, India saw deal volume rise to its highest level since Q1'18.

India reported 294 deals valued at around $3,169.4 million in Q4'20. During Q4'20, home delivery, marketplace platforms, and e-commerce were the hottest areas of investment, attracting the majority of India's funding rounds of $100 million or more.

Commenting on the India findings, Nitish Poddar, Partner and National Leader - Private Equity, KPMG in India said, "There have been a number of sectors that have really benefited from the pandemic here in India. Interest in staples delivery - fresh food, groceries, and the like - has grown quite significantly in recent months, in addition to online retail and gaming. That has driven a lot of investment. Then there's edtech. It's been an attractive area for VC investors for a couple of years now but in 2020, that interest skyrocketed and so did the investments."

While the VC investment braved the pandemic throwing better results, the report said that the future also looks bright for VC market. It said, Global VC investment is expected to remain quite high in Q1'21 given the large amount of dry powder in the market, low interest rates in many regions of the world, and the increasing drive of corporates for digital transformation. IPO and M&A activity is also expected to remain very robust as other unicorns look to exit.