Sector deals have slipped to their lowest level since Q1 2019, but what's to blame?
Walmart reported profits this morning. Most of the numbers don't matter to you or me as they have little to nothing to do with the world of private capital and startups, but one metric popped out: In its quarter ended July 31, Walmart's US grew Ecommerce sales up 97% year-over-year, which the company described as “strong results across all channels”.
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Walmart's total sales increased 5.6%. So you can see the discrepancy between the company's physical business and its e-commerce endeavors, with one growing single digits and the other nearly triple digits. In its fiscal year ending May 1, 2020, Walmart's e-commerce sales grew 74%. In the quarter ended January 31, 2020, it was 35%.
The ecommerce acceleration is real as evidenced by a variety of numbers that you can analyze, including that of Walmart. Heck, when The Exchange scoured the latest fintech venture capital results, we found that rising ecommerce spending was possibly one reason fintech stores were doing such strong late-stage results.
As I read the second quarter venture capital data on the state of retail technology, and especially e-commerce technology in general, I expected a stellar quarter with lots of dollars invested in lots of deals.
While Q2 2020 was slightly better than Q1 2020 for ecommerce VC results, it wasn't a big comeback. And the first half of this year is pretty darn slow overall compared to previous results for e-commerce-focused venture capital businesses.
What gives? I have an idea or two, but let's first analyze the data that business market data provider CB Insights has put together as we expand our seemingly never-ending look at the ridiculously interesting first half of 2020 for startups and VCs.
VCs Falling In Love With Ecommerce Startups?
In 2019, e-commerce saw an average of 314 transactions per quarter and invested capital of nearly $ 5 billion, with the four-quarter pace for the year being $ 4.97 billion per quarter.