1、1#Q1VC 2020 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.21 April, 2020Venture PulseQ1 2020Global analysis ofventure funding2#Q1VC 2020 KPMG Inter

2、national Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.Welcome In a departure from our normal format we wanted to let you all know that you are in our thoughts as we

3、all work through what is likely the biggest global test that we will likely deal with in our lifetimes.Venture Capital investment trends are obviously irrelevant in comparison to what is currently facing us, but supporting and showcasing this community remains critical to those of us leading KPMG Pr

4、ivate Enterprise. We have no doubt that the human spirit will triumph over this adversity and we have seen this evidenced in the tremendous accomplishments of our employees and of our clients over the last several weeks. It has been inspirational to see, and we are sure to see more over the next few

5、 weeks and months.Remember we are here to provide assistance to you in any way we can even if it is a simple conversation around how you are doing.Q120 was unlike any quarter on record. The emergence of the novel coronavirus COVID-19 shattered original expectations for the year, putting previous tre

6、nds and concerns, such as Brexit and the US-China trade tensions, on the backburner. The spread of the virus, deemed a pandemic by the World Health Organization on March 11thcreated turmoil in nations, economies, and public markets around the world. Despite the impact of COVID-19, VC investment glob

7、ally remained quite robust in Q120, primarily due to the strong pipeline of deals in many jurisdictions around the world. In particular, VC investment in the US remained strong, led by a $2.25 billion raise by Waymo, a $1 billion raise by Generate Capital, and a $750 million raise by Quibi. VC inves

8、tment was also strong in Europe, led by a $500 million raise by Revolutand a $240 million raise by Lilium.messageThroughout this document, “we”, “KPMG”, “KPMG Private Enterprise”, “us” and “our” refer to the network of independent member firms operating under the KPMG name and affiliated with KPMG I

9、nternational or to one or more of these firms or to KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-vis third parties, nor does KPMG International have any such authority to oblig

10、ate or bind any member firm.Unless otherwise noted, all currencies reflected throughout this document are US Dollar. 2020 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG ne

11、twork are affiliated.You know KPMG, you might not know KPMG Private Enterprise. KPMG Private Enterprise advisers in member firms around the world are dedicated to working with businesses like yours. Whether youre an entrepreneur looking to get started, an innovative, fast growing company, or an esta

12、blished company looking to an exit, KPMG Private Enterprise advisers understand what is important to you and can help you navigate your challenges, no matter the size or stage of your business. You gain access to KPMGs global resources through a single point of contact, a trusted adviser to your com

13、pany. It is a local touch with a global reach. 23#Q1VC 2020 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.Asia, meanwhile, saw VC investment drop s

14、ignificantly, driven by a slowdown in deals activity in China, where the fight against COVID-19 began much earlier than in other jurisdictions. Despite a sharp decline in the number of deals, Asia saw a number of megarounds during Q120, including $3 billion raises by Gojek and Kuaishou, and a $1 bil

15、lion raise by Yuanfudao.With unprecedented shutdowns around the world, Q220 is expected to be a rough quarter for VC investment in every jurisdiction. While there continues to be an enormous amount of dry powder in the global VC market, many investors will likely sit on the fence until the ramificat

16、ions of the pandemic become clearer. VC deals that do occur will likely involve follow-on funding to companies within the existing portfolios of VC investors or companies that have a clear value proposition given the current situation.In this quarters edition of Venture Pulse, we look at these and a

17、 number of other global and regional trends, including: The implications of COVID-19 on each of the key jurisdictions The rise in demand for digital business models The rise in benevolent investments in companies focused on addressing COVID-19 challenges The long-term ramifications of the pandemic o

18、n potential investment trends.We hope you find this edition of Venture Pulse insightful. If you would like to discuss any of the results in more detail, please contact a KPMG Private Enterprise adviser in your area.Throughout this document, “we”, “KPMG”, “KPMG Private Enterprise”, “us” and “our” ref

19、er to the network of independent member firms operating under the KPMG name and affiliated with KPMG International or to one or more of these firms or to KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any

20、 other member firm vis-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.Unless otherwise noted, all currencies reflected throughout this document are US Dollar. 2020 KPMG International Cooperative (“KPMG International”). KPMG International pr

21、ovides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.Jonathan LavenderHead of KPMG Private Enterprise, KPMG InternationalConor MooreCo-Leader,KPMG Private Enterprise Emerging Giants Network, KPMG International and Partner, KPMG in

22、 the USKevin SmithCo-Leader,KPMG Private Enterprise Emerging Giants Network, KPMG International and EMA Head of KPMG Private Enterprise3 2020 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member

23、firms of the KPMG network are affiliated.Globally, in Q120 VC-backed companies raised$61.0Bacross4,260 dealsGlobalUSAmericasEuropeAsia5#Q1VC 2020 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent mem

24、ber firms of the KPMG network are affiliated.To economies, public markets, and VC markets around the world, the novel coronavirus COVID-19 was a black swan event. Its rise in Q120 was unexpected and sudden, its impact massive and widespread. Every major region of the world is now working to stop its

25、 spread and to mitigate the resulting economic fallout. While the impact on the VC market was somewhat muffled in Q120 due to a strong pipeline of deals in most jurisdictions, the outlook for Q220 is much less promising.Calm before the storm a solid start to 2020Despite some global political and eco

26、nomic uncertainty, including the UKs official exit from the European Union and the ongoing US-China trade war, 2020 started off on a mostly positive note. VC investment in both the Americas and Europe got off to strong starts. In the US, autonomous mobility company Waymoraised $2.25 billion, while c

27、leantech infrastructure investor Generate Capital raised $1 billion. In Europe, UK-based Revolut led fundraising with a $500 million round, while Germanys Liliumraised $240 million.VC investment in Asia, however, fell significantly, despite $3 billion raises by both Indonesia-based Gojek and China-b

28、ased Kuaishou, and a $1 billion raise by China-based edtech, Yuanfudao on the last day of the quarter. Deals activity dropped very sharply in Asia, driven primarily by a slowdown in China, the first to be affected by COVID-19. Fintech remained a very hot area of investment globally during Q120. Digi

29、tal banks in several jurisdictions raised strong funding rounds, including US-based Chime ($500 million), UK-based Revolut($500 million), Sweden-based Klarna ($200 million), and Australia-based Xinja ($160 million).Responding to a global pandemic, corporates focusing on core businessIn February, COV

30、ID-19 began to make significant waves around the world, shattering expectations and creating turmoil in the public markets. In the wake of being called a pandemic by the World Health Organization in early March, numerous jurisdictions around the world took unprecedented action to slow the spread of

31、the virus. International travel was limited or banned. Schools were closed and moved online. Bricks-and-mortar businesses and corporate offices not considered essential businesses were closed. People were told to stay home. Businesses around the world are currently working to cope with the ramificat

32、ions of COVID-19. With the exception of strategic investments for example, to enhance digital connectivity and coworking,corporate VC investment will likely be minimal in the short-term as companies focus on ensuring the sustainability of their core business.Already cautious investors becoming more

33、soFollowing WeWorksfailed IPO in 2019, VC investors appeared to be growing far more cautious with their investments. They increased their focus on profitability, particularly with respect to companies within their portfolios that were mulling the decision to IPO. They also focused less on seed and S

34、eries A companies, preferring safer bets and companies with sustainable cash flows. Global VC investment holds, almost steady despite impact of COVID-19GlobalUSAmericasEuropeAsia6#Q1VC 2020 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a

35、 Swiss entity with which the independent member firms of the KPMG network are affiliated.With the sudden uncertainty created by COVID-19, VC investors are only expected to become even more risk averse. Many investors will likely sit on the fence until they better understand the impact of the virus.

36、VC investors will likely need to take time to re-evaluate their portfolios given the current situation. With COVID-19 basically slamming the IPO market door shut at least for the short-term, some companies might require bridge funding to get through the market turbulence. Companies in the US could b

37、e particularly at risk given the upcoming presidential election. Should the pandemic not be resolved in Q220, any potential IPO exits could be pushed into 2021.Restrictions hindering cross-border VC deal activity Given travel and movement restrictions, cross-border VC investment will be very challen

38、ging heading into Q220. The inability to conduct in-person due diligence and face-to-face meetings will likely curtail a significant amount of cross-border activity, with some VC investors choosing to stick closer to home. Even when deals do get completed, transaction times will likely be much longe

39、r due to the need to create new processes to support alternative due diligence approaches.Growing number of benevolent investments While COVID-19 is creating many challenges for the VC market globally, it has also driven an upswell in benevolent and philanthropical investing as investors look to sup

40、port companies looking for a vaccine or that have innovative ways of dealing with COVID-19. In the UK, for example, the Coalition for Epidemic Preparedness Innovations has invested $23.7 billion in companies that are working to develop a vaccine. Companies it has supported include Novavax (working w

41、ith Oxford University), Moderna, and Inovio Pharmaceuticals1. Meanwhile, the Bill and Melinda Gates Foundation, working with Wellcomeand Mastercard committed up to $125 million to accelerate the response to COVID-192.Governments are also making significant investments focused on addressing the impac

42、ts of COVID-19. In March, German-based CureVac received $89 million from the European Commission so that it could scale its production of its potential COVID-19 vaccine3, while the Canadian Government invested $27 million to support a number of projects focused on developing, testing, and implementi

43、ng measures to respond to the novel coronavirus4. Digital solutions making a game-changing leap forwardNumerous jurisdictions around the world have effectively shut down major segments of their economies, closed schools, and restricted the movement of people. With restrictions closing countless busi

44、ness offices, organizations are turning to digital solutions as a means to keep their people connected, connect with their clients and customers, and keep their operations moving forward. Companies and sectors that have lagged on the innovation front are now recognizing and working to bridge major g

45、aps in their capabilities. This crisis-driven action and forced innovation will have resonating impacts long after COVID-19 finally abates. Companies will have realized the value of digital on an almost unheard-of scale. Consumers will have seen the value of e-commerce, edtech, digital entertainment

46、 and gaming, digital learning, and all manner of other digital services. This shift could forever accelerate retail and many other industries further along the digital continuum. Those who do not move may very well not survive.Global VC investment holds, almost steady despite impact of COVID-19, con

47、td.GlobalUSAmericasEuropeAsia1https:/ 2020 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.Dry powder could be a significant forceGlobally, VC invest

48、ors are sitting on a significant amount of dry powder, one Pitchbook estimate suggesting approximately $189 billion5. While VC investors may hold back for some time, they dont have the luxury of sitting on it for the long term as it could impact their timelines and the returns on their ongoing funds

49、. A lot of money is waiting to be deployed and invested. When the uncertainty around COVID-19 begins to decrease, VC investors will be looking for ways to deploy these funds. Trends to watch for globallyWhile traditional VC investment is expected to slow significantly over the next quarter, there ar

50、e several niche segments of the market that could remain attractive to investors due to their applicability in the current environment. Health and biotech, for example, including companies focused on digital health, pharmaceuticals and life sciences, AI modeling to predict the spread of diseases, me