Editor’s note: this is an article from Crunchbase News written by research lead Gené Teare and syndicated with permission.

To understand the impact of the pandemic on global venture funding, we took a look at comparative trends for the first four months of each year from 2016 through to 2020.

The impact to technology companies was immediate, with transportation (UberLyft), logistics (KeepTruckin), travel (AirbnbOYO), real estate (CompassOpendoor), marketing (Branch), retail (Rent the RunwayThe RealReal), finance (MonzoMetromile), media (PoliticoQuartzTheSkimm), and recruiting (GlassdoorZipRecruiter) all letting staff go as the business environment has changed directly or indirectly due to social distancing.

The practicalities of investing have also changed for venture firms; investing in companies without meeting face to face to develop a rapport is now the new way of doing business.

While this is a clarifying time for startups, it still provides opportunities for investors who have raised unprecedented funds in the last two years. The numbers bear this out, as we are not noticing a substantial downturn in funding yet.

Global funding in the first four months of 2020 is down by 11 percent compared to the first four months of last year. It is worth noting, however, that this percentage may decline somewhat over time as data for the most recent months will cause numbers to rise, relative to the same timeframe in 2019.

And if you think January and February activity mirror that in March and April, you would be wrong. In the timeframe where social distancing took hold during March and April in most parts of the globe, funding increased by as much as $2 billion to $5 billion per month over the first two months of the year.

January through April highlights

  • 2018 was an all-time high for global funding from January to April at $99 billion.
  • January through April 2019 tracked at $93 billion.
  • In 2020 we hit $82 billion in the same four-month timeframe.

For this study we include seed, venture, corporate venture and private equity rounds in venture-backed companies. See glossary of funding stages below.

Huge regional differences

China contracted quite substantially in the first four months of the year, down 30 percent for 2020 and down 58 percent for 2019, when comparing year over year. The downward trend in funding in China, however, predated the crisis.

The U.S. and Europe show figures that are down by 13 percent when comparing 2020 to 2019. Both regions grew during the 2019 four-month time frame, over 2018’s growth.

India saw the greatest increase for this time period; growing from $4 billion in 2019 to $9.7 billion in 2020. However, the increase is attributed to an investment in Reliance Jio in which  Facebook gained a 10 percent stake.

The rest of the world was growing its share of venture in 2018 and 2019, but is down 26 percent year over year for 2020. Leading countries include Singapore, Indonesia, Israel, Canada, Australia, and Brazil. Of these, Indonesia, Brazil and Australia experienced the highest growth year over year in the first four months of 2020.

Late-stage stays strong

Seed funding is down 32 percent and early-stage funding down 26 percent for the four-month period. Given that seed has the largest data lag, however, we fully expect it to recover. For early-stage funding, we see a bigger pullback as the larger Series A and B rounds are announced in news cycles.

Late-stage venture rounds, plus technology growth, is stable year over year for this four-month timeframe at $54 billion with a greater share of overall dollars coming in at 66 percent versus 59 percent in 2019. Late-stage peaked in 2018 due to funding expansion in China, followed by a contraction in 2019.

For context, the 2008 financial crisis

In the 2008 financial crisis, seed as a newer investment class kept growing. The funding environment shifted dramatically for Series A, B and C rounds in 2009, down year over year by 40 percent, 41 percent and 46 percent, respectively. Funding levels took a couple of years to recover.

The pandemic is having a very different impact on venture funding this time around in contrast to 2008. Some leading technology stocks including FacebookNetflixGoogleAmazonApple and Zoom, are performing well compared to a year ago despite the global crisis.

There is a growing awareness that leading technology companies emerge stronger given the trend of moving everything online.

Smartphones and cloud services are close to 15 years in adoption, with the additive spurt of shelter-in-place requirements locking us to our screens for friendship, entertainment, education, work, finances, health and shopping.

In our recently published Opportunity Index we look at the sectors we believe will see renewed investor interest through the pandemic.

Glossary of funding terms

For reporting purposes, Crunchbase aggregates its funding data into “stages,” reflecting the different phases of private company development. Rounds are classified by stage according to the following sets of rules.

  • Seed-stage are composed of seed, pre-seed and angel rounds. Crunchbase also includes venture rounds of unknown series, equity crowdfunding rounds, transactions of undisclosed type, and convertible notes below $3 million or less.
  • Early-stage consists of Series A and Series B rounds, as well as other round types. Crunchbase includes venture rounds of unknown series, transactions of undisclosed type, and convertible notes totaling above $3 million and $15 million.
  • Late-stage consists of Series C, Series D, Series E and later-lettered venture rounds following the “Series [Letter]” naming convention. Also included are venture rounds of unknown series, transactions of undisclosed type and convertible notes above $15 million.
  • Technology growth is a private-equity round raised by a company that has previously raised a “venture” round. (So, basically, any round from the previously defined stages.)