It’s no secret that the world economy is reeling under coronavirus’ impact. Many expect a recession right around the corner, the likes of which we haven’t seen since in known human history. While things look pretty bad right now, they might get worse, according to KPMG’s Venture Pulse report. The report, which had VC investments at the core of its heart, suggested that the effect of the virus was somewhat muffled in Q1, and companies should expect a more sinister Q2.

Venture Capital investments in Indian companies dropped to $2.2 billion for the first quarter. When compared to the $6 billion that came into the country in the quarter ending in November 2019, and the total $14.5 billion last year, this was a huge slip. This, even though the effect of the virus peeped its monstrous head quite later in the quarter, with a country wide lockdown coming into effect only in late March. Now that India has been in full lockdown mode for the better part of April, Q2 might witness an even bigger slowdown.

“Initially, India was not as affected by Covid-19 in Q1’20 compared to China. Concerns related to the pandemic grew later in the quarter, due in part to the fact (that) India receives a significant amount of VC investment from international VC firms and corporates,” the report said.

“While the pipeline for deals is expected to remain relatively robust in India, deal flow is expected to become very slow, particularly in Q2’20,” the report said. However, despite the expected slowdown, many industries like as ed-tech, health-tech, gaming and auto-tech, which also includes the mobility sub-segment, are anticipated to continue garnering interest from VC investors.

Asia as a whole, saw a similar slowdown, where VC investments fell “significantly”. VC backed companies raised somewhere around $16.5 billion. China was mostly prominently affected by the virus, with the number of deals dropping to just 481. However, the country still managed to make it to half of the top 10 financing in Asia. Indonesia-based Gojek and China-based Kuaishou, both managed to bag deals worth $3 billion. Another China based edtech Yuanfudao raised an impressive $1 billion at the last day of thee quarter.

On a more global scale, VC backed companies pulled in $61 billion in the quarter, with major focus being on pharma and biotech, sectors which reeled in $7.6 billion. The US and European markets managed to raise $34. 25 billion and $8.8 billion, across 2,443 and 923 deals respectively. US based autonomous mobility company Waymo raised $2.25 billion while cleantech infrastructure investor Generate Capital raised $1 billion. Revolut, a UK based company, led fundraising with a $500 million round, while Germany’s Lilium raised $240 million.

Q2 might see a shift in trend, where a niche segment of the market like health and biotech, logistics and delivery, edtech, and online entertainment expected to thrive, despite of the expected slowdown in the industry. The world has come together as a family to drive the virus away, with big bets being placed on the formulation of a vaccine.