According to the PitchBook-NVCA Venture Monitor report, venture capital dealmaking, exit, and fundraising values all set new highs in 2021.
According to the National Venture Capital Association, the US VC business saw $329.9 billion invested across 17,054 transactions, a record for deal count and over quadruple 2020’s previous deal value high.
In a statement, John Gabbert, CEO of PitchBook, stated, “By all criteria, 2021 was a fantastic year for the U.S. VC ecosystem.” “A significant amount of the new investment records may be attributable to the system’s record levels of capital washing.” VC dry powder is at an all-time high, and a rising number of crossover investors are becoming involved in or even leading, VC ventures. We anticipate LPs to continue to contribute money to venture at record rates in the next year, with VC returns exceeding every other private capital asset class.”
For the first time, investors raised $128.3 billion, surpassing the $100 billion record. In addition, VC-backed firms that went public or were purchased generated $774.1.4 billion in yearly exit value.
About $681 billion was raised via public offerings, reaffirming the favorable circumstances created by robust public markets and valuations, as well as the existence of special purpose acquisition companies (SPACs) as an alternative to IPOs (IPOs). The venture ecosystem as a whole has seen a significant increase in values at all phases of the investment cycle.
In a statement, NVCA CEO Bobby Franklin remarked, “The greatest news about these record successes is that we are generating more American created businesses than ever before.” “Entrepreneurs are the job creators of our country, sowing the seeds for tomorrow’s high-growth businesses.” In order to secure their long-term success, regulators must consider the startup ecosystem as a whole. These figures demonstrate the enormous influence our business can have on our country’s economic prosperity.”
In the fourth quarter, venture capitalists spent $88.2 billion over 4,591 transactions, increasing the year-to-date totals to $329.9 billion across an estimated 17,054 deals, almost twice the previous annual high established in 2020.
Nontraditional investors took involved in 6,483 acquisitions worth more than $253 billion, marking a 64 percent increase in participation year over year.
With $190.8 billion raised in 2021, mega-deal activity increased dramatically. Growth surpassed the wider market and came close to matching the approximately $200 billion spent in megadeals over the preceding three years.
In 2021, a record number of companies obtained their initial funding, generating a total of $23.8 billion and surpassing 4,000 investments for the first time.
Activity on the Way Out
The total exit value in 2021 was $774.1 billion, showing a staggering 168.0 percent year-over-year increase. Over 500 exits in Q4 alone delivered $152.6 billion in liquid assets to investors.
At $681.5 billion, IPOs accounted for 88 percent of total VC exit value. Rivian, Aurora, and Gitlab were the most valuable public companies in Q4, but the news is largely about the breadth of exit activity, with 296 VC-backed public companies listed, up 114.5 percent year over year.
Activity to raise funds
For the first time, VC fundraising activities in 2021 surpassed $100 billion, with a year-to-date total of $128.3 billion across 730 funds, indicating a 47.5 percent rise over the previous year’s record of $86.9 billion.
In 2021, the median and average fundraising values jumped to $50 million and $188.1 million, respectively, a considerable rise above the $42.1 million and $156.9 million median and average fundraising values of 2020.
In a statement, Byron Deeter, partner at Bessemer Venture Partners, said, “2021 was a milestone year for the Venture Capital industry across almost every metric, and reflects the immense innovation that continues in the private technology sector despite immense global political and economic volatility.”
The number of female entrepreneurs is increasing
In recent years, the number of valued firms with at least one woman founder has increased dramatically, with 3,631 companies receiving $54.8 billion in venture capital in 2021. Meanwhile, 931 deals with all-female founders earned $6.4 billion in funding.
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