Report: US VC deals slowed in Q2, with $34.3B invested across 2,197 deals, down 23% YoY, but started to pick up by mid-May with govt stimulus package rollout
I wrote a blog post last week in which I said: Tweets: @nvca : Despite external economic headwinds, US VCs closed 148 funds totaling more than $42.7 billion through Q2 2020. Learn more about #VC fundraising in the Q2 2020 @PitchBook-NVCA Venture Monitor, created with @SVB_Financial & @CertentInc: https://pitchbook.com/... https://twitter.com/...
Context & Ripple Effects
The Q2 2020 PitchBook-NVCA Venture Monitor captures the first full COVID-era quarter: deal value down 23% YoY to $34.3B across just 2,197 deals, yet fundraising held firm with 148 funds closing over $42.7B, and activity visibly recovering from mid-May as the government stimulus rollout coincided with a pickup in dealmaking. The mid-May inflection proved durable — the year ended with US VC funding at a record $130B, up 14% YoY, even as deal count fell for a second straight year.
That pattern — fewer deals, resilient dollars, stimulus-aided recovery — became the template for every subsequent downturn in the data: the 2022 contraction, the Q2 2023 drop to $39.8B, down ~50% YoY, and the Q1 2024 low of $36.6B, the weakest first quarter since 2018.
First-order effects
- Startups raising in Q2 2020 faced a thinner market — 2,197 deals versus roughly 2,850 a year earlier — while the 148 funds that closed over $42.7B meant committed capital was still flowing into portfolios despite the slowdown.
Second-order effects
- With the mid-May stimulus rollout reviving deal flow, VCs with fresh funds could deploy into a discounted environment, setting up the concentration of dollars into fewer, larger rounds that defined the record 2020 total.
Third-order effects
- The recurring shape of these cycles — deal count falling harder than dollar value in 2020, 2022's 30% YoY deal-value decline, and the 2023-24 troughs — points to a US venture market consolidating capital into fewer, bigger checks per round rather than broad-based early-stage funding.
The trend: US venture funding is cycling through stimulus-and-exit-driven booms and deal-count contractions that each leave dollars more concentrated in fewer rounds.