Caution weighs on investor sentiments with low value deals dominating APAC VC funding landscape in Q2, finds GlobalData

Low value deals (investment <=US$10m) dominated the Asia-Pacific venture capital (VC) investment landscape with 67.4% share of the overall volume in the second quarter (Q2) of 2020, according to GlobalData, a leading data and analytics company.

VC investment volume (deals with disclosed deal value) increased marginally from 290 deals in May to 295 in June 2020. However, it was still much lower compared to the 367 announced deals in April.

Aurojyoti Bose, Lead Analyst at GlobalData, comments: “VC investors are becoming more cautious in committing big-ticket investments amid the volatile market conditions arising out of COVID-19 outbreak. With the World Health Organization (WHO) warning that COVID-19 crisis may get worse in future, the cautiousness among VC investors is likely to prevail for some more months.”

Out of the total 367 deals announced in April 2020, low value deals as a percentage of the total deal volume stood at 71.9% while the share of deals valued more than US$100m stood at 4.9%.

Deal volume declined by 21% in May 2020 compared to the previous month. The share of low value deals as a percentage of the total deal volume also declined to 62.4%. The share of deals valued more than US$100m stood at 5.9%.

June managed to marginally reverse the decline witnessed during the previous month. Meanwhile, the share of low value deals also increased to 66.8% while the share of deals valued more than US$100m stood at 4.1%.

More Media