Background
Our survey analyzed the terms of 211 venture financings closed in the third quarter of 2020 by companies headquartered in Silicon Valley.
Key Findings
Valuation results rebounded from the prior quarter, but remain down from pre-pandemic peak levels
- Up rounds exceeded down rounds 77% to 12%, with 11% flat in Q3, an increase from Q2 when up rounds exceeded down rounds 71% to 15%, with 14% flat.
- The Fenwick & West Venture Capital Barometer" showed an average price increase in Q3 of 76%, a significant increase from 51% in Q2, but still below the average price increase of 93% for financings in 2019.
- The median price increase for financings was 42% in Q3. While a considerable increase from 26% in Q2, it remains below the median price increase of 60% for financings in 2019.
Valuation results improved for all series of financings
- Valuation results across all series of financings improved in Q3 compared to the prior quarter, but continued to lag pre-pandemic levels. Series E and later financings, however, recorded the smallest gains in average price increase compared to the prior quarter, and the percentage of Series E and later financings that were down rounds also increased compared to the prior quarter.
Valuations strengthened across all industries
- Similarly, valuation results strengthened across all industries in Q3 compared to the prior quarter. The internet/digital media and software industries again recorded the strongest valuation results in the quarter, while the hardware and life science industries recorded the greatest gains in valuation results compared to the prior quarter.
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