Enterprise capital funding for startups stayed sturdy within the second quarter of 2021, persevering with a notable latest upswing and setting a report trajectory for the total yr, in accordance with two new experiences.
Exactly on tempo with the primary three months of this yr, VC funds invested $75 billion in U.S. startups within the second quarter, in accordance with PitchBook’s NVCA Enterprise Monitor. The $150 billion whole for the yr’s first half means 2021 is practically sure to shatter 2020’s full-year report of $164.3 billion in deal worth.
It’s not simply in the USA that enterprise capital is trending towards report ranges. Globally, it is up 157 % over the identical interval final yr, with $156.2 billion invested within the second quarter of 2021, in accordance with CB Insights’s State of Enterprise report for the quarter.
Bigger, later-stage funding rounds are particularly on the rise. Late-stage funding by the primary half of the yr amounted to $108.8 billion within the U.S.–almost matching the full-year 2020 whole of $109.8 billion, per PitchBook. Rounds at or exceeding $100 million–of which there have been 198 in Q2–brought 2021’s whole to $85.5 billion of capital funding throughout 385 offers. Simply six months in, that units up 2021 to far exceed final yr’s information for “mega offers,” in accordance with PitchBook.
With massive funding rounds come large valuations–even for firms simply taking a Sequence A spherical (which within the U.S. hit a median of $42 million). Within the second quarter of the yr alone, 136 new firms have been freshly valued at greater than $1 billion, in accordance with CB Insights. That is an almost 500 % enhance in “unicorn births” year-over-year. “Severely, if you happen to elevate now and should not a unicorn, it is virtually odd,” writes CB Insights’s Anand Sanwal.
Listed below are just a few further takeaways from the experiences on the present funding panorama.
Promising areas for funding
Fintech firms obtained $1 out of each $5 invested within the second quarter of 2021, in accordance with CB Insights. Funding within the sector reached $33.7 billion, up from $25 billion final quarter and $11.6 billion a yr in the past.
“Many innovators and entrepreneurs at the moment are centered on the ample alternatives to develop applied sciences and construct firms that tackle the wants of a reopening economic system and a structurally totally different post-Covid surroundings,” PitchBook writes.
One space that is slowed down
Whereas SPAC mergers have continued at a brisk tempo, public filings have slowed dramatically, in accordance with CB Insights. New SEC guidelines in April relating to filings may very well be having dramatic results, with simply 61 filings within the second quarter of 2021 after 298 within the first.