Venture capital (VC) investments are weathering the pandemic well, with over 4,000 closed deals in the second quarter totalling US$63 billion in value. This is almost equal to the total investments that flowed in during the first quarter and just a tad lower than 2Q 2019 figures, which stood at $69.8 billion.

Mirage News reports that investments in Australia’s start-ups attracted new highs during the first half of 2020. That’s to the tune of US$944.7 million, from just about $627 million during the same period in 2019.

Finding Opportunities

Amanda Price, head of KPMG High Growth Ventures in Australia, said start-ups are faring well despite the ongoing impact of the pandemic most everywhere else.

“This points to how lockdown has rapidly accelerated digital trends and increased the importance of digital business models and solutions, from B2B solutions to edtech and beyond,” she explained.

Still, opportunities always come with corresponding risks.

“With some countries and territories opening up their economies, there will likely to continue to be challenges with international travel and deal-making for some time,” Price cautioned. 

She added that venture capital investors are now focusing more on helping their local markets rebound by seeking opportunities in the homefront. As a result, Australian companies at the growth stage might not have much luck with looking overseas for funding.

“Q320 will likely show whether VC investment will withstand the full brunt of the pandemic’s impact, and whether Australian startups can turn the ongoing disruption and challenge of the pandemic into an opportunity,” she said.

Powering Through Uncertainties

Earlier this month, Amazon Australia announced in a report that it is setting aside US$400,000 worth of grant packages to encourage innovation by Australian start-ups.

“We hope that the new Amazon Launchpad Innovation Grants will catapult a new wave of small businesses who have evolved during this time to continue creating and transforming products,” said Chad Ciccarelli, head of Amazon Australia Launchpad. 

However, Price said start-ups still face an uncertain road ahead.

“The pandemic has forced many companies to rethink their 2020 plans, with many mature startups re-evaluating their funding requirements. This is leading many VC investors to reconsider where they may need to invest more over the next quarter or two,” she lamented.

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