We got this one wrong. At the close of Q1, based on our conversations with investors and tech providers globally, we expected the COVID-19 pandemic and its related economic impact to cause a slowing of the pace of investment late in Q2. The slowing didn't happen. Deal flow was reasonably consistent throughout the quarter, and Q2 total global HR Tech VC investment surpassed Q1 by more than 14%.

Consistent with Q1 results, HCM continued to attract significantly more investment than talent acquisition. Investors may be changing their focus within HR and work tech. Over the last 14 quarters, we've seen Talent Acquisition and HCM more or less even in overall dollars invested.  HCM carried Q2 2020 with USD 461.9 Million invested. Combined with Q1's results, this puts HCM at 52% of the invested amount so far this year, in comparison to Talent Acquisition at 29% and Talent Management at 19%.

It's still too early to tell, two quarters does not a trend make, but if the coronavirus is having an impact, it seems to be a shifting investor focus to HCM and technology supporting core HR versus recruiting-related functions.

HRWins data tracks deal announcements, so there will be a lag from deal close to the announcement date. That said, we can compare the data back to January 2017.

In the chart below, we compare quarterly venture capital results in 2017, 2018, 2019, and to date in 2020. While we don't see a great deal of relevance in trend lines from year to year, the chart does reinforce that 2020 is, by recent measures, off to a strong start.

We continue to hear hesitation from investors, tech providers, and other analysts.  Deals are still happening, but investors are changing their calculus, looking to the future and considering what the workplace will look like, what impact COVID-19 and the global recession will have on work, the employee experience, talent strategies, and the tech companies will invest in to support that future.

There were 74 global HR technology investments made in 17 countries during Q2 2020. The U.S. remains the leader in HR tech investment, with 38 deals in the quarter. The U.K. reported 10 deals. France reported 6. Brazil and Canada reported 3 deals each. Denmark and Germany each reported 2 deals. The rest of the countries contributing reported 1 deal each. HR technology continues to be a global category led by the U.S. and Europe. Asia and South America continue to deliver more consistency in deal count volume, and increasing deal sizes. However, the U.S. still commands the largest total addressable market. Both tech founders and investors are attracted to this.

It is impossible to be aware of all of the global early angel and seed rounds of funding. Early-stage rounds are not reported consistently. The average size of Seed rounds we tracked increased their average level to USD $3.08 Million. Onfido had the largest round this quarter at USD $100 million. Swile raised $78.7 million. There were 10 C or later rounds totaling USD $438.4 million.

HRWins HR Tech VC Database provides direct access to all of the investments tracked since January 2017. Slice data by round, amount, date, investor, location, and more

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From the Editor: for the full report - and it's well worth the click- please visit #HRWins here. Lots of interactive charts and data to sort, with additional analysis from George.