top of page
Search
  • Writer's pictureYannick Oswald

2020 VC Funding Trends

Updated: Nov 1, 2020

Today I came across this Sifted article with the headline 'The Covid-19 pandemic has resulted in a 12% decline in VC investment compared with 2019, a less severe impact than many had feared.'

Having talked to many of my peers in the industry over the last months, this data doesn't surprise me. As predicted in this post from May, VCs are as active as before when it comes to deal sourcing, but are naturally more cautious when deploying capital.


Let's have a look at the big picture

'Compared to the big rises and falls in overall venture capital spending shown by the chart above, the 12% fall in overall funding in Europe is not dramatic.'


Indeed, if you look at the chart below, you can see that European Venture funding comes from a high. In addition, early Q3 numbers are encouraging and might signal the start of a rebound.



'Normally the third quarter is a quieter period because of summer holidays, but this year it appears that some of the deals that may have been shelved in the second quarter re-emerged in Q3.


It looks like the peak moved forward by a quarter. In Q2 everyone was trying to figure out what was happening with their portfolio, but then people started learning how to deal with the situation.


The big question, of course, is what happens next. If normal investing patterns continue in Q4, the year will end up only slightly down on 2019.'


A decade full of opportunities

So, overall, European Venture Funding seems to be doing well. I am convinced that the next decade is full of opportunities and that the years ahead of us will be exceptional years for tech as the digitalization of the world accelerates. We also see early signs of new long-term behavioral patterns emerge, which is very exciting... More on this in the coming weeks.


Life is awesome,

Yannick


2 comments

2 Comments


Yannick Oswald
Yannick Oswald
Oct 28, 2020

Thanks for the great comment Nicolas.


I agree with you. The point I wanted to make is that VC funding, especially early stage, seems to be doing well. I use the word seems as these are only very early data points that I expect to move over the next months. The fact that funding went down a bit more in some locations is mainly driven by larger rounds. In general local data points have always been very volatile because of that reason. That's why I focused on the broader picture, Europe wide data.


I look forward to discovering more data points in the coming months.


Talk soon,

Yannick

Like

nicolas.valaize
Oct 22, 2020

It might even be that VC investments are up this year : there has consistently been a reporting lag - at least with seed rounds (not sure how much % of unreported-yet seed rounds would be VC-funded though).


The DealRoom guys wrote an awesome data-based piece on seed round reporting lag. They were going after Mark Suster himself when he claimed that seed funding was down in 2018 (when it fact it was the opposite). « 2015 seed rounds were first reported as 3,990, but two years later this number had reached 5,680 - a 42% increase ! »

—> https://blog.dealroom.co/the-dirty-secret-of-venture-capital-investment-data/


It could also be the case for 2020 VC investments (specially considering the fact that Sifted don’t even mention any data…


Like

New feature! You can now leave your comments below each post. Share them with the OE community.

  • Grey Instagram Icon
  • twitter
bottom of page