US, China VC deal slump hits global figures hard in Q2, study finds

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A slump in venture capital deal activity in the world’s two largest economies has led to a global decline in investment from the asset class in the second quarter, new research shows.

The US and China accounted for more than 60 per cent of total investment volume for venture capital deals during Q2 according to a report by data and analytics business GlobalData.

Deals done in the sector by those two countries in April totalled more than 1,000, but dropped to about 960 in May and sunk further to 775 in June, amid ongoing trade war tensions between the US and China.

The UK, France and Canada were among the few key countries that continued to witness consistent growth in VC investments during the review period, although they failed to completely offset the overall decline given the huge impact of the US and China on the figures.

GlobalData financial deals analyst Aurojyoti Bose said, “With the ongoing US-China trade dispute showing no signs of slowdown, VC 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 VC investors more than ever before.”

The share of deals across all the value ranges mostly remained largely flat across all the months during Q2 2019. Low value deals of less than $10m continued to dominate VC investments with a 75 per cent share in the overall volume.

A total of 1,495 deals with disclosed deal value were announced in April 2019. The US topped with a total of 891 VC 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 $2bn and the $568m Series D funding raised by UiPath.

Notable deals announced in May included US$1bn raised by JD Health and $750m raised by Megvii, while June saw $500m raised by Ziroom and $362m raised by Bordrin Motor.]

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