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Alternative Market Briefing

US venture capital: Deal flow slows down, exits lookup

Tuesday, May 26, 2020

Laxman Pai, Opalesque Asia:

US venture capital deal flow slowed in Q1 2020 as COVID-19 introduced practical challenges for dealmakers while exists showed an increase in activity.

Following a strong 2019, venture capital activity in the US got off to a slow start in 2020, said a report by Preqin and First Republic.

With social distancing and travel restrictions imposed across the US to contain the spread of COVID-19, many business meetings were canceled.

A total of 963 deals were completed for venture capital companies in the US in Q1 2020, worth an aggregate $27bn, said the report. This represents a decline of 19% from 1,191 deals completed in Q1 2019.

Despite the slowdown in activity, some large deals were still completed in Q1, the report pointed out.

The five largest transactions accounted for 23% ($6.1bn) of the aggregate value of venture capital deals in the quarter. These included the $2.25bn financing round held by Waymo LLC, a developer of self-driving car technology which began as the Google Self-Driving Car Project in 2009.

Early-stage investments (Series A and earlier) accounted for half of all venture capital deals completed in the US in Q1 2020. Series B and Series D and later investments constituted the joint largest share (21%) of aggregate deal value among financing rounds.

Information technology was the most active industry for US-based venture capital investment in the quarter, representing 54% of all deals and 40% of total deal ......................

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