The coronavirus has made it more difficult for entrepreneurs to raise money. But for many companies — from established businesses to smaller start-ups — the pandemic hasn’t prevented them from finding investors willing to open their wallets.
TransferWise recently raised $319 million in a secondary deal, in which existing shareholders will sell some of their holdings in the European fintech company. The transaction values TransferWise at about $5 billion, a nearly 43 percent bump from last year. Kristo Kaarmann, the company’s chief executive, said that TransferWise, which was founded in 2011, didn’t need to raise money, since it has been profitable for three years now. But it saw an opportunity for older investors and long-tenured employees to sell some of their stakes.
Smaller companies aren’t afraid to embark on fund-raising either, even if the pandemic has changed the way they court potential investors. Ro, a telehealth start-up, said last week that it had raised $200 million in new funding. Gro Intelligence, which uses artificial intelligence to gather agricultural data, is in the process of raising an “opportunistic” Series B round with a target of $50 million, its founder and chief executive, Sara Menker, said.
It has taken time for investors to get comfortable, well, investing. Venture deals in the second quarter in the United States, Europe and Asia were all down from the same time last year, but up from the previous quarter, according to PWC and CB Insights. “There’s obviously a lot more gun-shyness,” Ms. Menker of Gro Intelligence said, with many venture capitalists initially focused on protecting existing portfolio companies rather than striking new deals.