Despite global uncertainty mainly resulting from the COVID 19 pandemic, the US presidential election, Brexit negotiations and trade tensions between the US and China, global venture capital investment remained high in Q4’20, with $80.8 billion in investment across 5,418 deals.
According to the Q4’20 edition of the KPMG Private Enterprise Venture Pulse report, this performance helped drive annual global VC investment to $300.5 billion – the second highest level of global VC funding ever, next to 2018 ($329.7 billion).
The Americas accounted for more than half of VC investment globally during Q4’20, with $41 billion of investment across 2,725 deals. Of this amount, the US accounted for $38.8 billion across 2,526 deals. VC investment in Europe reached $14.3 billion raised across 1,192 deals, compared to $13.8 billion cross 1,473 deals in Q3’20. VC investment in the Asia-Pacific region remained strong, rising slightly from $24.5 billion in Q3’20 to $25.2 billion in Q4’20. China accounted for the top five largest VC deals in the world during Q4’20, including Manbang Group ($1.7 billion), Zuoyabang ($1.6 billion), Yuanfudao ($1 billion), Yungwang Wandian ($907.1 million), and Enovate Motors ($735.85 million).
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 of companies such as Airbnb, Doordash, and C3.ai.
2020 Annual Highlights
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.
Annual VC investment in the Americas reached a record $164.3 billion during 2020, including $156.2 billion in the US. Annual VC investment in Europe also saw a record of $49.0 billion during the year.
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.
Global median pre-money valuations rose across Series A and higher rounds during 2020, including to $525 million for Series D or later rounds, compared to $410 million in 2019. Other global median pre-money valuations were $22 million for Series A, $70 million for Series B, and $180 million for Series C deals. Global median pre-money valuations for Seed stage deals held steady at $6 million between 2019 and 2020.
Global first-time venture financing dropped to $24.9 billion across 6,580 deals in 2020 from $29.4 billion across 8,149 deals in 2019.
VC investment in the Americas dipped from $44.7 billion in Q3’20 to $41.0 billion in Q4’20. The US attracted $38.8 billion in Q4’20, including a $725 million raise by biotech company Resilience, a $668 million raise by fintech Robinhood, a $533.8 million raise by fintech Chime, and $500 million raises by aerospace company Relativity Space and self-driving delivery company Nuro.
Europe attracted $49 billion in VC investment in 2020 with $14.3 billion raised across 1,192 deals. France-based agtech Ynsect attracted $372 million after LumiraDx’s $389 million funding.
VC investment in the UK surged to a record $5 billion during Q4’20, significantly higher than the previous record of $3.9 billion seen in both Q4’17 and Q3’19. The UK accounted for more than half of Europe’s largest deals in Q4’20, including LumiraDx ($389 million), Molo ($343 million), Cazoo ($310 million), and OneTrust ($300 million).
The UK ($15.3 billion), Germany ($7.1 billion), France ($6.3 billion), the Nordic regions ($5.7 billion), and Israel ($5 billion) all saw record amounts of annual VC funding in 2020.
Asia attracted $25.2 billion in VC investment in Q4’20 – up from $24.4 billion in Q3’20. VC investment in China continued to recover.
According to the report, Global VC investment is expected to remain quite high in Q1’21 along with IPO and M&A activity.