Three huge VC investments saved the day as deal flow in Asia ebbed to a 12-quarter low in Q1 2020.
The figure of $16.5bn was buoyed by three super deals: a $3bn raise by Indonesia-based Gojek; a $3bn raise by China-based Kauishou; and, a $1bn raise by China-based Yuanfudao.
China managed only $8.9bn across 481 deals which, says a new report, was understandable given that China was the first country to have to handle COVID-19.
The Q1’20 edition of the KPMG Private Enterprise’s Venture Pulse was published out of New York. It highlighted the fact that the raise by Yuanfudao, an edtech company, came at the end of the quarter and illustrated the potential of companies in certain industries to buck the downward trend due to their sudden applicability.
VC investment in India took the down escalator, conjuring up a mere $2.2bn in Q1 2020, compared with a record-breaking $6bn in the final quarter of 2019.
There was a bright spot in Southeast Asia with the ride-hailing industry picking up quite a few fares as investors jumped on board. This was likely due to fierce competition for market share. Gojek’s main regional competitor Singapore-based Grab raised $886m.
Overall, global VC investment in Q1’20 dipped quarter-over-quarter with $61 billion raised, down from $65.6bn in Q4’19, despite five $1 billion plus mega-deals.
“A very strong deal pipeline in most regions of the world limited the impact of COVID-19 on the VC market globally in Q1’20,” said Conor Moore, Co-Leader, KPMG Private Enterprise Emerging Giants Network. “But given the sharp decline of VC deal volume in Asia, as compared to the many economies that only started to shut down near the end of the quarter, Q2’20 is expected to be a rough quarter for VC investment in every jurisdiction.”