This survey is a special interim report to highlight changes in the Silicon Valley venture capital environment in light of the COVID-19 pandemic. It focuses on April financing activity and supplements our March Flash Report that looked at financings in the first quarter of 2020.
Please note that when providing data on a monthly basis, and especially when analyzing trends among industries or series on a monthly basis, we are working with smaller numbers than in our quarterly report and accordingly the possibility of statistical anomalies increases.
Key Findings -
April valuation changes continued to be weaker than normal, but were mildly stronger than March.
• The percentage of up-rounds declined modestly from 72% in March to 70% in April, and both were lower than the 83% of financings that were up-rounds in 2019.
• Interestingly, the number of down-rounds also declined, from 16% in March to 12% in April, although both were higher than the 8% down-rounds in 2019.
• Accordingly, the percentage of flat rounds increased, to 18%, compared to 13% in March and 9% in 2019. This increase in flat rounds may be a signal that there were more rounds led by insiders.
• The Fenwick & West Venture Capital BarometerTM showed an average price increase of 60% in April from 42% in March, both below the 2019 average of 93%. The median price increase increased slightly, from 26% in March to 30% in April, again below the 60% median price increase seen in 2019.
• Internet/new media and software were by far the strongest industries from a valuation increase perspective, with hardware showing the worst results.
Deal volume increased, and was consistent with 2019 monthly results.
• The number of deals increased from 54 in March to 64 in April. The average number of monthly deals in 2019 was 65.
Late-stage deals percentage increased.
• The percentage of Series D and E+ deals increased to 38% of all financings in April, an increase from 21% in March and the highest since August 2018 when Series D/E+ deals combined for 42% of all financings. That said, the average price increase for late-stage financings was only 26%, compared to 35% in March and 59% in 2019.
Life sciences deal volume stayed strong.
• The percentage of life sciences deals continued high at 25% of all financings, compared to 28% in March. During 2019 the percentage of life sciences deals was 14%.
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