Second-quarter VC investing totals appear lackluster

The second quarter’s venture capital results are coming into focus.

The Exchange will have more notes on Q2’s venture results this week, but this morning we’re digging into our first dataset concerning what happened in the world of private capital from April through June.

Crunchbase News — a place I used to work, it feels fair to note — ran its usual dig through the quarter’s venture results, effectively coming up with two answers to the question of what happened in Q2 VC. As it turns out, a single company’s fundraising made the quarter’s results look far better than they really were. Once we strip out that firm’s non-venture funding rounds, a clearer picture emerges.

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If you discount Reliance Jio’s epic — and continuing — ability to attract billions of dollars, the private investment market was slack in the second quarter. Per Crunchbase News, including the Reliance Jio deals, “Crunchbase recorded $69.5 billion invested across all funding stages for the second quarter specifically. This is up 17 percent quarter-over-quarter and down 2 percent year over year.” (Crunchbase has moved away from making projections, notably, and now discloses reported data in its quarterly results).

A gain of about one-sixth from Q1 2020 results was probably not what you expected, given the quarter’s nearly comical turbulence. But, with Reliance Jio’s fundraising bacchanal stripped out, results are much worse.

Let’s talk about whether it’s fair to lean more on Reliance Jio-free data, and dig into what the data means for startups around the globe. We’ll also look at a few other mega-rounds from the period to see if there are any other distortive funding events lurking in the data.

Final global Q2 data exclusive of Reliance Jio’s Q2 deals, per Crunchbase data, shows investment declines in the period of -9% compared to Q1 2020, and -23% compared to the year-ago quarter. While some of that will be due to reporting lag — the thing that projections were initially built to countermand — the dips are still stark.

Global Q2 VC does not look strong from this perspective.