The global economy is, without wanting to be overly dramatic, on life support while everyone scrambles to find a vaccine for the coronavirus and allow consumer activity to return to normal levels. In some cases, such as the casino industry, for example, it has been said that full recovery could take three or four years. Other industries, like travel, shouldn’t expect to reach pre-COVID-19 levels until late next year or the year after. Among these dire forecasts, there is an interesting beacon of light appearing. Australian investments in startups have risen by about one-third across the first six months of the year.
According to global accounting and financial firm KPMG, through its Venture Pulse report, US$944.7 million was spent on startup investments in Australia during the first half of the year. The second quarter saw a large part of that, with $439.7 million of venture capital being laid out for startups – 38.5% more than the second quarter of 2019, which saw $317.5 million. Compared to the same first-half results from last year, which saw about $627.3 million, the results can only be seen as a promising indication of a strong rebound coming.
According to KPMG’s Amanda Price, who heads up the firm’s high growth ventures division in Australia, “Australian startups have continued to attract record levels, despite the ongoing impact of the pandemic. This points to how lockdown has rapidly accelerated digital trends and increased the importance of digital business models and solutions, from B2B solutions to edtech and beyond. For example, globally B2B productivity solutions accounted for US$14.3 billion in VC investment over the past three months.”
As devastating as the coronavirus has been and with so many people still out of work (many with benefits that are about to expire), the pandemic has fueled a new era of investment spending and a transition to digital operations that are going to alter many industry landscapes permanently. This, by some estimates, can be seen as the jolt the global economy needs to ramp up interest in innovation, and will help usher in entirely new ways for companies to conduct business.