Our retail tech report takes a data-driven look at global retail technology investment trends and top deals, underscoring the impact of Covid-19 and highlighting areas of interest across the retail landscape.
The State Of Retail Tech H1’20 Report: Investment & Sector Trends To Watch features updates on VC funding, M&A deals, and emerging startups across key areas of retail tech investment, including in-store tech, e-commerce, and supply chain tech.
Using data and features from the CB Insights platform, we report on key insights and emerging trends, including how the Covid-19 crisis has impacted VC investment. We also highlight where retailers, manufacturers, and other players will be focusing their attention in the future.
Retail tech funding and deals are down in 2020 so far: Deals and funding to retail tech companies declined in H1’20 vs. H1’19. Funding for H1’20 was down 42% from the same period in 2019, falling from $25.4B to $14.6B. Deals in the same period declined 5%.
E-commerce is driving big deals and valuations in retail tech: As Covid-19 drove an acceleration in e-commerce sales growth, e-commerce companies won with Consumer Smart Money investors and saw valuations rise. Online retailers and e-commerce enablement startups drove the bulk of Smart Money mega-rounds, as well as retail tech unicorn births (companies valued at $1B+).
Food delivery deals jump in Q2’20: The explosion in online grocery demand drove an increase of 21% in deals to food delivery startups in Q2 vs. Q1. Funding declined 38% from Q1 to Q2. Deals in the first half of the year remained concentrated in the early stages.
- Covid-19 has reeled in retail tech funding in 2020. Investors particularly scaled back funding in Q2’20 as the impact of the pandemic set in.
- Europe’s share of retail tech deals is growing. So far in 2020, Europe has captured 25% of retail tech deals, its highest share in the last 5 years. While North America still leads in deal share overall, its share has slipped in recent years.
- Funding to the e-commerce space grew in Q2’20 quarter-over-quarter as the pandemic pushed more buying online. Social commerce startups, resale platforms, and virtual shopping tools all received attention as retailers rushed to improve the online shopping experience.
- Deals to the on-demand space accelerated. The pandemic spurred an increase in interest for fast delivery, in turn driving more deals to on-demand tech in Q2’20. Incumbents made key acquisitions during the quarter to help improve delivery efficiency.
- Food delivery deals jumped in Q2’20. The explosion in online grocery demand drove an increase in deals to food delivery startups in Q2’20 compared to Q1’20. Deals in the first half of the year remained concentrated in the early stages.