Global venture capital investment witnessed a gradual decline in two consecutive months (May and June) in the second quarter 2019, primarily due to a decline in the total number of venture capital investments in the United States and China, according to GlobalData.
The United States and China collectively accounted for more than 60 percent of the total investment volume (including investments with disclosed funding value) during second quarter 2019. The total number of venture capital investments in these two markets declined from 1,003 in April to 961 in May and 775 in June 2019.
On the other hand, few key markets outside these two markets registered an upswing in deal volume, though they failed to completely offset the overall decline. The United Kingdom, France and Canada were among the few key countries that continued to witness consistent growth in venture capital investments during the review period.
“With the ongoing U.S.-China trade dispute showing no signs of slowdown, venture capital investors in these two markets will keep a close watch on the developments. Investment activity is also expected to be influenced by Brexit uncertainty. However, companies in other countries, more specifically in the emerging economies, are expected to be on the radar of venture capital investors more than ever before,” said Aurojyoti Bose, financial deals analyst at GlobalData.
The share of deals across all the value ranges mostly remained unchanged/flat across all the months during second quarter 2019. While the quarter witnessed the announcement of few mega deals (investment >= $1 billion), low-value deals (investment <= $10 million) continued to dominate venture capital investments, with 75.2 percent share in the overall volume. All three months registered the highest number of deals in the range of $1 million to $5 million.
A total of 1,495 deals (with disclosed deal value) were announced in April 2019, out of which low-value deals accounted for 75.5 percent. It was the only month to record a $1 billion-plus deal in second quarter 2019. The month also had two deals in the range of $500 million to $1 billion. The United States topped with a total of 891 venture capital funding deals, whereas China held a distant second position with 112 deals in April.
Some of the notable deals in April 2019 included the announcement of Grab’s plan to raise $2 billion and $568 million Series D funding raised by UiPath.
The venture capital investment deal volume (with disclosed deal value) witnessed a decline of 0.4 percent in May 2019 as compared to the previous month. May witnessed the announcement of six deals in the range of $500 million to $1 billion, the highest during the quarter. The month also witnessed the announcement of the highest number of deals in the range of $1 million to $5 million. Low-value deals as a percentage of the total deal volume were also the highest (76.8 percent) during the month. The number of venture capital investments declined by 2.6 percent in the United States and 17 percent in China in May, as compared to the previous month.
Some of the notable deals announced in May include $1 billion raised by JD Health and $750 million raised by Megvii.
June also saw a decline of 14 percent in venture capital deal volume (with disclosed deal value) as compared to the previous month. The month did not witness any deals valued more than $500 million. Low-value deals as a percentage of the total deal volume stood at 72.9 percent. The number of venture capital investments declined by 22 percent in the United States. Though China recovered, the investment volume remained flat when compared to April 2019 investment levels.
Some of the notable deals announced in June included $500 million raised by Ziroom and $362 million raised by Bordrin Motor.
