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AXON PARTNERS GROUP
COVID19: VC Market - Impact @AxonPG
Technology is outperforming any other sector even in the current market
Between January and March S&P500 has dropped over 19%. At the same time, Technology
Sector has lost ~12% of its value… … and is the only positively performing sector LTM
S&P 500 YTD price evolution($)
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S&P500 performance by sector (%)
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Verticals such as Streaming, SaaS, Food Delivery and Gaming are clear winners in the new paradigm
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Share price performance ($, %)
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Verticals such as Travel and Mobility are suffering the most under current market conditions
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Share price performance ($, %)
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Pharmaceuticals/Biotech have outperformed the market in Europe and the U.S. over the last 20 years
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Pharma/Biotech are proving to be “immune” to COVID-19
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VC has delivered superior returns regardless of the cycle
Venture Capital has low correlation to the Public Markets. Top VC Funds perform even better
during the downturns, as Founders, like Investors, look for top quality smart money to back
them during the crisis
VC Fund Performance by Vintage(% net IRR)
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Benchmarks Data as of Q2 2019
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Diversified nature of FOF makes it independent of the cycle
Diversification by vintages, strategies (Primaries, Secondaries, Co-investments) and geographies
allows FOFs to outperform. Professional selection, co-investment and secondary expertise, and
access to the best funds positions FOFs to benefit from the current conditions
FOF Performance by Vintage(% net IRR)
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Benchmarks Data as of Q2 2019
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Even though we expect VC market to slow down - there are always great opportunities
Some of the best companies were founded and funded during the last crisis
Long-run VC Tech Investment trend (US)(# Deals, $ invested)
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VC Fundraising will also slow down, and the fundraising cycles will extend
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Long-run VC Fundraising trend(# of Funds, $ Raised)
Average years between core funds (Average years between funds)
As a result, we expect VCs to benefit from better entry terms in both early and late stage
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Long-run Series A deal volume & pre-money valuation trend(# of Deals, $ Valuation)
Long-run Series C deal volume & pre-money valuation trend(# of Deals, $ Valuation)
