In their latest report on the impact of COVID-19 pandemic to the global startup fundraising effort, Startup Genome revealed that global venture capital funding has dropped by about 20 per cent since the onset of the health crisis in December 2019.
However, the report also noted that the drop is “far” from being evenly distributed.
For example, in China, as a major tech hub that was also the first country to get hit by the outbreak, venture capital funding had a drop of over 50 per cent relative to the rest of the world in January and February. The market experienced a rebound in March.
Despite the improvement, its numbers remained lower than the pre-crisis level, indicating that the situation has not fully recovered for China.
For the rest of Asian countries, a major drop is also seen in January with no rebound as of March.
Also Read: Entrepreneurs share COVID-19’s impact on their businesses in a survey by Startup Genome
As a comparison, the US so far has experienced “only relatively small changes” since December 2019 with a drop of less than 10 per cent by March.
“However, when we take into account the seasonality pattern from previous years, with January consistently showing more activity than December, the small drop between December and the beginning of the year means that every month of the first quarter of 2020 in the US saw over 15 per cent fewer deals than the same months in 2019,” the report elaborated.
How about Southeast Asia?
Separately, Dealstreet Asia also released another report that specifically looked into startup fundraising in the Southeast Asian (SEA) region.
The report stated that the amount of capital committed for interim and final fund closes reported between January and March 2020 fell 47 per cent from the Q4 2019.
Despite the decline, this number was more than triple the value recorded in the same period a year ago.
Also Read: Startup Genome, MDEC partner to boost Malaysia’s startup ecosystem, focussing on policy action
This indicated that the SEA startup ecosystem, despite facing challenges such as soaring unemployment rate and company shutdown, continue to gather investors’ attention.
In a recent webinar with e27, Cocoon Capital co-founders and managing partners Will Klippgen and Michael Blakey stressed that the VC firm continues their business activities as per usual.
They even mentioned that some brands actually became more successful after a crisis.
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