VC Trends 2020: Enterprise Startups Soar, IPO Insights & Investor Sentiment
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Q2 Venture Capital: The Enterprise Boom Continues
As we analyze Q2 2020 venture capital activity, one trend dominates: enterprise startups are capturing an increasing share of investment dollars. New York-based VC firm Work-Bench’s latest data reveals:
- Record NYC Enterprise Funding: \(1.5B across 51 deals in Q2 (up from \)1.3B/44 deals in Q1)
- Historic First Half: \(2.7B across 95 deals in H1 2020 - nearly matching 2019's full-year total (\)3.3B/114 deals)
- B2B Dominance: Confirms broader industry shift toward business-focused startups
This surge comes despite pandemic challenges, with UiPath’s recent $225M Q3 round further boosting NYC’s enterprise sector.
Silicon Valley’s VC Climate
Fenwick & West’s May 2020 report highlights shifting dynamics:
- Downward Pressure: Up-rounds declined to 67% (from 71% in April, 83% in 2019)
- Valuation Softening: Average share price increases dropped to 43% (from 63% in April, 93% in 2019)
Pandemic IPOs: Why Traditional Listings Persist
Recent public debuts of nCino and GoHealth offer insights into IPO strategies during economic uncertainty.
nCino’s Public Leap
- Strategic Benefits: CEO Pierre Naudé emphasized enhanced brand credibility and financial transparency
- Funding Advantage: Successful offering provides capital for sales/marketing expansion
- Market Response: Strong post-IPO performance validates traditional listing approach
GoHealth’s Calculated Move
- Investor Demand: Oversubscribed offering demonstrated market confidence
- Valuation Strategy: Multiple pricing scenarios considered pre-launch
- Post-IPO Reality: Initial share dip contrasts with nCino’s surge
Public Market Realities: Investor Patience Tested
Medallia CEO Leslie Stretch offers a nuanced perspective one year post-IPO:
“Public investors provide valuable feedback that strengthens operational resilience. The key is maintaining long-term vision while demonstrating fiscal discipline. Quarterly fluctuations matter less than sustainable growth trajectories.”
This challenges the common Silicon Valley narrative about public market impatience, suggesting successful companies can navigate these waters effectively.
Emerging Trends & Insights
1. Most Active VCs Revealed
The TechCrunch List identifies top investors writing first checks, while Extra Crunch data highlights founder favorites based on thousands of testimonials.
2. Pandemic-Driven Innovation
- Video Tech Surge: Startups racing to improve our virtual meeting reality
- Strategic Extensions: Some companies raising additional rounds not for survival, but to accelerate COVID-era opportunities
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