Venture capital investors shift focus to low value deals in Asia-Pacific during Q1 2021, finds GlobalData

Despite the COVID-19 pandemic, the Asia-Pacific (APAC) region sees notable venture capital (VC) investment activity. However, the pandemic has forced VC investors to shift their focus to low value deals during the first quarter (Q1) of 2021, finds GlobalData, a leading data and analytics company

An analysis of GlobalData’s Financial Deals Database reveals that out of the total 1,105 deals (with disclosed deal value) announced during the quarter in APAC low value deals (<=US$10m) accounted for 54.6% share of the total VC investment volume while deals valued more than US$100m and US$1bn accounted for just 6.8% and 0.3% share, respectively. Billion-dollar deals remained mostly non-existent during the period.

Aurojyoti Bose, Lead Analyst at GlobalData, comments: “With market conditions still remaining volatile, VC investors have become more cautious in committing big-ticket investments.”

VC investment volume (deals with disclosed deal value) increased by 2% from 345 deals in January to 352 in February and further by 15.9% to 408 in March 2021.

In January 2021, low value deals as a proportion of the total deal volume stood at 53% while the share of deals valued more than US$100m and US$1bn stood at 7.2% and 0.3%, respectively. The month witnessed announcement of one deal valued more than US$1bn.

The share of low value deals as a percentage of the total deal volume stood at 58% in February while the share of deals valued more than US$100m and US$1bn stood at 6% and 0.6%, respectively. The month witnessed announcement of two deals valued more than US$1bn.

Meanwhile in March, the share of low value deals accounted for 52.9% and the share of deals valued more than US$100m stood at 7.1%. The month did not see announcement of any deal valued more than US$1bn.

Mr Bose concludes: “The COVID-19 pandemic has posed several challenges to all the industries world-wide. The APAC VC industry is no exception. Even though VC investors are now more cautious than ever before in committing big-ticket deals due to the ongoing uncertainty, the investment landscape looks brighter in the mid- to long-run, which is evident from the significant jump in deal volume during Q1 2021.”

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